Green Economy Journal Issue 60

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ENERGY
The
WINDS
The South African Wind Energy Association’s focus is to enable a thriving commercial
wind power industry in South Africa that is recognised as a major contributor to social,
environmental and economic security. Green Economy Journal speaks to the Association’s
CEO, Niveshen Govender.
Please talk to us about SAWEA’s position regarding the interim
grid allocation rules and the development thereof.
We have supported the development of the interim grid capacity
allocation (IGCAR) rules as an effective mechanism for integrating
additional renewable energy to address the ongoing energy crisis.
While the industry found some challenges within the first iteration,
we’ve worked well with Eskom to resolve those matters to ensure
that the rules are conducive to industry requirements.
We applaud Eskom for their efforts, continuously striving for
equitability and transparency in the allocation of the limited available
grid capacity in a structured and coordinated approach, as well as
allowing us to engage them on our concerns and making the necessary
adjustments. This will no doubt enable the country to better realise
a balanced and reliable energy mix. As reported, concessions to the
IGCAR include:
• Applicants no longer need to have a water-use licence, but
must be able to show that they have already applied for it.
• They also no longer need permission from the Civil Aviation
Authority. Proof of an application for this is enough.
• An option on the lease or purchase of land for the generation
facility will do, instead of a concluded lease or purchase contract
and permission from the Minister of Agriculture, Forestry and
Fisheries for its subdivision.
• One year’s data on the wind conditions on the premises is
enough and for solar farms satellite data will be accepted.
• If there are more projects ready for construction than can
be connected to the network, priority will be given to those
who applied first.
What are some of the industry’s challenges when it comes
to increasing localisation?
Some of the key challenges include policy uncertainty, consistency
of procurement and local skills required for manufacturing
capabilities. Collectively, these are key drivers of investment
into localisation in the renewable energy sector. And, through the
South African Renewable Energy Masterplan (SAREM), we believe
An industrialised agenda in
South Africa’s wind energy sector can
bring numerous benefits.
of
FORTUNE
Niveshen Govender, CEO of SAWEA.
that government is on the right path to create an attractive investment
destination by working with industry to realise possibilities within
local manufacturing.
As is widely known, our Association together with sector stakeholders
strongly advocate for the industrialisation of the renewable energy
sector to extrapolate the enormous potential across the value chain,
thereby unlocking both the economic power of the renewable energy
industry and delivering broader benefits to the people of this country.
Transformation goes hand-in-hand with the industrialisation
of the wind power sector. And market certainty is the most important
aspect of building a local manufacturing industry.
The country’s power sector procurement model started evolving
over a decade ago, with major policy shifts. This has accelerated
over the last two years, with the lifting of the cap on the new
generation capacity requirement for a generation licence and
government’s continued commitment to rolling procurement.
This is in line with the global uptake of renewable energy to increase
energy security and achieve climate goals.
Transformation goes hand-in-hand
with the industrialisation of the
wind power sector.
South Africa’s energy roadmap, IRP2019, requires 3 600 wind
turbines, underpinning the industrialisation plan and demonstrating
a noteworthy opportunity for local employment and GDP contribution
through annual production across the value chain. By maximising
the use of the current industrial capacity to supply materials and
components into the sector’s demand areas, additional investments
in capacity and capability will be stimulated.
SAWEA supports the various government stakeholders, labour,
civil society, researchers, industry contributors and various advisory
groups, which are currently drafting the SAREM that addresses
exactly how we can industrialise the renewable energy value chain
in our electricity sector to enable inclusive participation in the
energy transition, serving the needs of society and contributing to
economic revival.
The draft SAREM – which is expected to be finalised in the next
two months by the Department of Trade, Industry and Competition
is a result of a rigorous process, including input from SAWEA’s
Manufacturing and Local Content Working Group. Stakeholders
have been invited to review and provide comments on the draft
masterplan document.
This framework aligns with SAWEA’s advocacy for sector
industrialisation, through increased local manufacturing. As such,
the Association reviews this framework’s key pillars as effective
interventions to create a better environment for local manufacturing,
which will no doubt result in increased employment opportunities,
READ REPORT
THOUGHT [ECO]NOMY
greeneconomy/report recycle
CAREER BIOGRAPHY
2022 to present: Chief Executive Officer | SAWEA
2019-2021: Chief Operating Officer | South
African Photovoltaic Industry Association (SAPVIA)
2016-2019: Programme manager | SAPVIA
2015-2016: Project manager | Department
of Energy
2012-2015: Specialist: green economy |
The Innovation Hub
ENERGY
investment, social inclusion and acceleration of our industry’s
participation in a global wind supply chain.
It is designed to stimulate the industrial and inclusive development
of renewable energy and battery storage value chains and contribute
to the broader development needs of the country.
Along with setting clear local content targets for future private
and public procurement, the SAREM’s focus on driving industrial
development outlines existing public sector programmes and
policy support with localisation objectives.
Despite initial localisation targets reflected in the 2022 draft,
the most recent draft includes revisions to exclude specific
targets, which is to be obtained through an inclusive negotiation
process, between the social partners.
How will an industrialisation agenda benefit the wind sector?
An industrialised agenda in South Africa’s wind energy sector
can bring numerous benefits. We believe that an industrialisation
agenda, which is rooted in robust local manufacturing capabilities,
will allow the wind power sector to deliver the necessary new
generation power needed for the country to thrive. By establishing
localised value chains and capitalising on economies of scale, cost
reductions can be achieved. This will ultimately result in decreased
dependence on global economies and mitigate potential impacts
stemming from uncertain political climates on local production.
To this end, the SAREM will provide a clear framework, necessary
for both local and global investors, seeking an investment destination
to manufacture renewable and new-generation technology
components, as part of the global supply chain.
Furthermore, local manufacturing has the potential to create
increased employment opportunities, investment, social inclusion
and acceleration of our industry’s participation in a global wind
supply chain.
These positive outcomes contribute to sustainable development
and enhance the country’s energy security.
Government’s public procurement vehicle, REIPPPP, is expected
to continue to provide a stable and consistent pipeline with foreseeable
and predictable timelines between procurement rounds remains
necessary to attract significant investments in order to rebuild
the manufacturing sector and create a local market based on its
competitiveness and value-add.
SOUTH AFRICAN RENEWABLE ENERGY MASTERPLAN | Draft version for review
7 July 2023 | Department of Mineral Resources and Energy | Department of Science and Innovation |
Department of Trade, Industry and Competition | [July 2023]
An industrial and inclusive development plan for the renewable energy and storage value chains
by 2030. The South African Renewable Energy Masterplan (SAREM) articulates a vision, objectives and
an action plan for South Africa to tap into current opportunities.
It aims to leverage the rising demand for renewable energy and storage technologies with a focus
on solar energy, wind energy, lithium-ion battery and vanadium-based battery technologies to
unlock the industrial and inclusive development of associated value chains in the country. This initial
technological focus is aligned with global and domestic demand dynamics as well as South Africa’s
supply-side capabilities. In time, other technologies (such as offshore wind or rechargeable alkaline
batteries) will receive increased focus, as they mature and industrial capabilities are developed. The
Masterplan builds on the Draft SAREM document released in March 2022.
Visit www.greeneconomy.media to download the full report in the digital version of Green Economy
Journal Issue 60.
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