Knowledge Pele MD Fumani Mthembi
An analysis of community protest action conducted by social development advisory firm Knowledge Pele shows that renewable-energy projects are not immune from the risk of community unrest, despite the fact that many projects fall outside of the main urban centres, which are more prone to such action.
Therefore, MD Fumani Mthembi is advising independent power producers (IPPs) to implement comprehensive community development plans well ahead of project construction so as to mitigate the social risks associated with the operation of long-term infrastructure assets in potentially volatile areas.
But proactive social-development planning could also become, she argues, a competitive advantage, as the economic and community development components of South Africa’s competitive-bidding process for the selection of IPPs become more influential.
Aspects such as localisation, community participation and social responsibility are already significant nonprice bidding criteria in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). But with tariffs expected to settle into narrower, albeit lower, range, these bidding elements could become key differentiators, particularly under the new tender framework that will be used from bid-window-five onwards.
To date, 92 projects, with a combined capacity of over 5 200 MW, have already been selected through the REIPPPP process and the IPP Office is looking to procure a further 1 800 MW before migrating the programme to the new tender document in 2016.
Mthembi tells Engineering News Online that many IPPs have already started to grasp the value of “proactive” interactions with surrounding communities, with many beginning to view it as being as important as labour relations. This relates to the nature of renewables projects, which have 20-year licences, but short construction lead times and small numbers of permanent employees.
“Therefore, by failing to have a strong relationship with the surrounding community an IPP could place its entire investment at risk,” she adds.
Knowledge Pele believes a proactive strategy hinges on developing direct community relations, as well as on including the community in decisions about the “development pathway”.
In other words, it is urging IPPs not to assume that they know best, but to rather enter a process, probably with the help of development professionals, that enables energy communities to become “agents of their own development”.
“It’s important to be in tune with what the community views as its priorities,” Mthembi says, while describing the opening and sustaining of communication channels as the most critical ingredient to ensuring genuine support for the social programmes associated with the projects.
“IPPs that do it well stand to have their social investments outlive the actual project, which is why we actually advise out clients to begin planning for ‘year 21’ – or project decommissioning – from the outset.”