The Industrial Development Corporation (IDC) has sent a delegation to Spain to visit wind energy company Nordex’s wind turbine manufacturing facilities, as South Africa’s accelerated energy transition and its push for sector industrialisation requires increased local manufacturing, with a projected localisation target of well over 55% for government procurement by the end of the decade.

To achieve this, government’s support through policy, smooth procurement and investment will be the key enabler. The exploratory trip will allow for first-hand discussions with the original-equipment manufacturer (OEM), the IDC says.

The delegation is being led by Nordex Energy South Africa MD Compton Saunders, who will facilitate discussions around opportunities for industrialising the local wind power sector.

“For the IDC to spearhead investment in the localisation of wind power components, they need to know what they are investing in and what can be expected from OEMs. To do this, it is important that the scale and complexity be unpacked, so that government can get a clear sense of the process, and for them to gauge the requirements accurately,” Saunders says.

The delegation is due to visit one of Nordex’s rotor blade manufacturing facilities, in the Lumbier area, and its nacelle production facility in the Barásoain area.

Currently, assuming that smooth procurement of new wind energy production continues, this sector is an excellent vehicle for direct infrastructure investment and a positive multiplier of economic effects, including nacelle assembly facilities. As the market matures and if volume remains sufficient, the sector could expand into the manufacturing of other specialised components for wind turbines, the IDC notes.

Wind turbine nacelles are the heart of the turbine, like the engine room on a ship, and house critical components such as the gearbox, main shaft, generator, transformer, and electrical cabinets of which many can be locally assembled and eventually manufactured.

A potential first step is to import components into the country, to be assembled locally and thereafter as a second phase, certain nacelle components can be manufactured in the country, says Saunders.

“We are one step closer to partnering with government, through the IDC, which will enable local assembly and manufacturing of nacelle components. However, we need to consider the economics and the mechanisms available to enable local cost competitive assembly in South Africa.

“Import taxes, special economic zones, funding support for constructing local assembly facilities and the volume and clear sight of the project pipeline, to make this feasible in a very price competitive environment, will need to be unpacked,” he explains.

The draft South African Renewable Energy Masterplan estimates that annual economic growth of over R140-billion will be achieved through production value, delivering more than 30 000 direct jobs, on the assumption of 70% to 90% localisation of key components and 90% of balance of plant by 2030, with local support and investment critical, the IDC notes.

The IDC targets opportunities at bankable stage. With more than R14-billion invested in renewable energy projects spread across the country, the IDC has also funded 25 community trusts, enabling active community participation in the Renewable Energy Independent Power Producer Procurement Programme, it adds.