While Covid-19 has resulted in delays in investment in South Africa, it has also given rise to some new opportunities in the green economy space, across sectors including energy, water, agriculture and waste management, says nonprofit green economy organisation GreenCape.
Since publishing its Market Intelligence 2020 reports, which highlight green economy investment opportunities, experts from the organisation note that many projects or investment opportunities have been delayed owing to Covid-19, but says others that are focused on resilience and recovery are coming to the fore.
GreenCape CEO Mike Mulcahy says it is expected that global economic stimulus packages will be geared towards technologies of the future, including a strong emphasis on scaling green technology solutions.
Energy programme manager Jack Radmore believes a strong and balanced energy sector can address many of the problems South Africa faces, including rising electricity prices, which are due to rise by between 9% and 15% this year, and power supply reliability.
At the same time that State-owned power utility Eskom has announced that load-shedding may be implemented again soon, government has started the push toward utility-scale procurement of renewable energy.
“We have seen the National Energy Regulator of South Africa focusing on the immediate procurement of emergency power and rolling out utility-scale programmes to procure again by the end of the year,” says Radmore.
He explains that local-level resilience in a post-Covid-19 future can come from municipalities buying power directly from independent power producers. There has been a lot of push for this, which will do away with municipalities going through Eskom only.
The City of Cape Town has appeared in court to argue for this right and Mineral Resources and Energy Minister Gwede Mantashe has published, for public comment, regulations to allow municipalities to buy their own power.
Radmore says should this realise, it presents opportunities for investors with regard to the design of 1 MW projects that can be built fairly quickly.
“Manufacturing in the energy space probably presents the biggest post-Covid-19 recovery opportunity. As we see more embedded generation and renewable energy generation in general, there is opportunity for local manufacturing of towers, turbines and even electric vehicles.”
He also mentions that energy storage will be a game changer in South Africa’s energy transition as a form of resilience against load-shedding, which is expected to continue for the next four to five years.
Herein lies opportunities for manufacturing batteries and developing a battery value chain, as the technologies become more price competitive every year.
Additionally, in the push for circularity and resilience, the beneficiation of batteries and solar panels will come to the fore as an opportunity, especially since South African is banning more and more products from ending up in landfill. This will effect a change both in consumers and manufacturers’ behaviour
In terms of transport, working from home may become the new normal and this has a marked impact on how people engage with mobility. This, Radmore notes, has motivated GreenCape to start looking at how people will be moving around and what opportunities this presents.
WATER & AGRICULTURE
Water and sustainable agriculture programme manager Claire Pengelly says many projections that GreenCape previously made around investment opportunities in the water and sanitation sector will be different, as a result of the Covid-19 crisis.
The focus has shifted to emergency water and sanitation infrastructure rollouts, but since this is temporary, there has to be a re-evaluation of the types of technology that can be deployed more sustainably in communities, which should be more affordable for municipalities as well.
Pengelly also expects an uptick in investment for waterless sanitation solutions.
With regard to agriculture and food industry opportunities, she says the resilience of South Africa’s food system has been shown, but the risks around food security and traceability have also been highlighted.
Pengelly believes there will be an increased focus on localisation and shorter supply chains in the food manufacturing industry.
She further remarks that the country already has a resilient commercial farming sector, which is quite innovative and efficient; nonetheless, GreenCape is seeing more investment in sensor technologies to optimise on use of water and, therefore, energy efficiency, as a form of resilience against climate change and economic conditions.
“Other opportunities that we see are around conservation agriculture, looking at the way you farm in a different way. For example, low tillage infrastructure helps to ensure the biodiversity of soil, which improves yields over the long term.”
Meanwhile, Pengelly notes that there is a drive to invest in alternative water sources, since surface water (dams) have dwindling availability.
This movement will provide for investment into technologies that can remove pollution from groundwater, as an alternative, and solutions around its extraction to prohibit over-extraction.
Circular economy programme manager Saliem Haider says that waste is in-itself always a good investment and GreenCape’s market intelligence reports focus heavily on waste beneficiation.
However, Covid-19 has exacerbated some of the existing issues within the recycling market, including pushing some companies over the edge that were already on the brink of bankruptcy.
Haider says China has banned imports of waste, which affected the export of certain materials, such as paper, cardboard and some metals from South Africa.
Haider states that the pandemic has highlighted the sensitivity of the recycling market and how it is not yet resilient. Landfills continue to pile up and bans continue to be imposed and, therefore, opportunities lie in “doing things differently”.
For example, with the Western Cape Department of Environmental Affairs announcing a 100% ban on organic waste to landfill by 2027, with a halfway target of 50% by 2022, it opens the door for the circular economy to take effect.
Haider says the ban lends the opportunity for investment into anaerobic digestion and composting for organic waste, as well as digestion of material to get biogas.
Landfill bans bring about extended producer responsibility, which in turn drives actions to ensure different means of manufacturing, how materials are recovered for reuse or rental options instead of selling.
This is especially relevant given increasing amounts of e-waste to landfill, which will need to be addressed sooner rather than later.