Denmark-based wind energy equipment multinational Vestas is optimistic about renewable energy, and specifically onshore wind energy, opportunities in South Africa and more broadly in Africa.
"We are also evaluating the potential of South Africa to act as a possible industrial hub towards the Southern and Eastern African markets. The African Continental Free Trade Area, which came into effect in January, presents interesting opportunities, especially for South Africa to view the renewable energy industry and the relevance of support for it through a new lens," says Vestas South Africa MD Louise Paulsen.
While the independent power producer (IPP) process in South Africa has ebbed and flowed, there is general consensus that renewable energy is key to addressing the energy crisis, she notes.
"These are positive signs. We have never before had such broad endorsement of renewable energy from the President, the CEO of [State-owned power utility] Eskom and included in the Department of Mineral Resources and Energy's Integrated Resource Plan."
Despite delays in the IPP process and their impact, there are indications that Bid Windows 5 and 6 of the Renewable Energy Independent Power Producer Procurement Programme are gaining traction. Vestas is preparing for these bid windows, but in its role as an original-equipment manufacturer serving its clients, not as an active participating bidder.
Additionally, Vestas is fully supportive of localisation policies, and says it complies with various localisation policies in the many countries where it operates, with Turkey and Russia serving as good examples where Vestas has developed suppliers and established manufacturing plants, says Paulsen.
"In South Africa, we have developed suppliers who have subsequently become exporters. We work closely with suppliers and provide technical support to ensure they develop and build capacity sustainably."
However, some challenges remain present. South Africa wants to maintain its steel industry, but local supply capacity is a challenge for large wind energy installations. Smaller installations are more suitable for high local content, but South Africa can supply various components for renewable energy projects and build up capacity as much as reasonably possible.
"South Africa has an energy-intensive economy, partly owing to being engaged in primary resources sector activities. These require sustainable energy and it makes sense to look to solar and wind energy sources, as the costs per megawatt-hour are lower than other energy technologies and South Africa is blessed with significant wind and solar natural resources that it can draw on."
Further, renewable energy projects act as a catalyst for development in some instances and regions, as the presence of the renewable energy industry has brought resources, job opportunities and development to far-flung, but renewable energy resource-rich areas and towns.
This is especially true of Vestas' wind energy projects in the Northern Cape, the Eastern Cape and the Western Cape where it has installations, Paulsen adds.
"We often look at young people within local communities and involve some into apprenticeships and internships to help build our pipeline of future technicians within communities.
“This ameliorates the challenges of relocating people to these areas, and the direct impact on the ability of people to earn money for their families can change the dynamics and help improve the local economies."
Vestas has observed these benefits in many of the towns where it has installations, eight in total and four under construction close to towns such as Laingsburg, Hopefield and Somerset East where activity has grown as a result of the wind farms that have been built there.
"This is the result of specific policy arrangements in which the government insisted that companies draw from local communities, in all categories of work including for ancillary requirements, such as food or cleaning services," says Paulsen.
Some challenges remain, but every public and private stakeholder and participant in these projects has learned valuable lessons for how most effectively to meet localisation requirements, support development and deliver the projects, she adds.
These lessons enable policy-makers to modify policies to attain developmental and regulatory objectives while improving the ability of project developers to identify effective and efficient means of meeting localisation and developmental support requirements.
Meanwhile, Vestas is exploring leveraging existing skills and skill sets in other industries in South Africa similar to what is required in the wind energy industry and which will require limited additional upskilling to allow professionals in these industries to participate in wind energy projects, says Paulsen.
"The types of skills our industry requires are similar to some of the skills in the automotive industry, the steel industry and heavy industry."
As rapidly as Vestas can train people, they are absorbed into the renewable energy sector, and even oil and gas professionals are entering the renewable energy sector. There is a requirement to accelerate the development of skills that can cross over to the renewable energy sector and this will also help to ensure long-term, sustainable careers for professionals in the energy sector.
Sketching the scale of the need in the wind energy sector, a Vestas spokesman referred to industry body Global Wind Energy Council reports that although total installed wind energy capacity worldwide is 743 GW, the pace of installations must rise to about 180 GW a year until 2030, and then increase to the installation of 280 GW a year by 2050 to enable the industry to support net-zero targets of global climate agreements.
"We will need an army of technicians for wind energy and massive skills development is required over the coming decades. This is true not only for onshore, but also for offshore where the industry faces challenges and has to gather the correct technical and marine skills and equipment to deliver these wind energy projects," the spokesman concludes.