The energy sector requires consistent demand from a consistent flow of renewable-energy projects in order to invest in local manufacturing, and not “haphazard demand that comes and goes”, says South African Renewable Energy Masterplan (Sarem) facilitator and Trade and Industrial Policy Strategies (TIPS) senior economist Gaylor Montmasson-Clair.
“Anchor demand is critical. For me, it is really important that we smooth out that process going forward.
“We have to acknowledge that every country that has built a renewable-energy industry to date has done it with significant anchor demand and a very supportive policy framework.
“If we think we are going to manage that without those two factors, we are kidding ourselves,” says Montmasson-Clair.
“We really need to do these things in a scripted manner, and that is the clarity we are trying to provide through Sarem, so that we are all on the same page.
“As a country, we must put forward our position and what we want to achieve, and then we have a shot.
“Of course, we do have that crunch now, where there is tension between resolving loadshedding as fast as possible, almost at any cost, and to also do this in a way that builds industry.”
Expansion Sarem seeks to expand South Africa’s manufacturing industry on the back of government’s procurement of renewable energy from private investors, among other goals.
Montmasson-Clair’s comments come as the seventh round (Bid Window 7) of government’s Renewable Energy Independent Power Producer Procurement Programme remains in limbo, having been delayed since early last year.
“Government, in some shape or form – national, provincial, municipal – has its fingers in a lot of procurement, either direct or indirectly,” notes Montmasson-Clair.
“This can be through guarantees, loans, grants, or directly. If this is the case, it must come with some sort of localisation objective.
“We cannot subsidise the importation of renewable-energy technologies without any conditions.”
Montmasson-Clair adds it is important to now focus on the immediate steps.
“For me, the first thing is plain and simple – we need to launch Sarem.
“It’s been too long since the process started. We need to finalise that – we are very close to doing that.”
However, completing the masterplan is just “a ticket to the game”, he notes.
“Then we have to implement what is in the plan.
“We are going to have a dedicated unit set up to drive implementation and to push the various interventions.”
Montmasson-Clair says industry and government are “working hard” to launch Sarem by the end of the year, but adds that this could possibly be delayed until early next year.
“We are now embarking on the final negotiations around targets.”