In response to changing market demand, energy services providers are broadening their market offerings, opening up opportunities for equipment suppliers, project developers, technical advisers and investors, reports nonprofit organisation GreenCape.

The organisation has published online versions of its '2020 Market Intelligence Reports' (MIRs), which are produced in partnership with the Western Cape Department of Economic Development and Tourism and that highlight the investment opportunities in key sectors of the green economy, for download.

The 2020 MIRs include updated investment opportunities and highlight the relevant legislative context and potential market barriers and risks in energy services, utility-scale renewable energy, electric vehicles, waste and water.

GreenCape also publishes a sustainable agriculture MIR in partnership with the Western Cape Department of Agriculture.

Considering that Covid-19 has created unprecedented uncertainty in global markets, GreenCape on May 13 said the subsequent announcements of global economic stimulus packages, aimed at revitalising the global economy after the humanitarian crisis, would be geared towards technologies of the future, including a strong emphasis on scaling up greentech solutions.

Western Cape Finance and Economic Opportunities Minister David Maynier commented that investment aimed at growing the green economy “ensures the sustainability of future economic opportunities”.

“It also creates jobs now, which remains a strategic priority for the Western Cape government, especially at this time, when economic recovery is a critical focus,” he added.

INVESTMENT OPPORTUNITIES

There are three emerging opportunities for investors in the embedded generation market, namely rooftop photovoltaic (PV) system bundling with standardised contracting models; solar PV for energy resellers; and operations and maintenance-only contracts, GreenCape energy analyst Reshmi Muringathuparambil pointed out.

“Within the energy storage market, there is an emerging opportunity for behind-the-meter battery storage. The energy efficiency market has emerging opportunities related to energy efficiency as a service, and the retrofitting of South Africa’s large stock of existing buildings,” she added.

Meanwhile, accounting for nearly 9% of installed capacity, the South African utility-scale renewable energy sector is showing growth and potential with over 3.9 GW of utility-scale projects already connected and operational, said GreenCape renewable energy sector desk head Mandisa Mkhize.

The latest Integrated Resource Plan 2019 allocations indicate 14 400 MW for wind, 6 000 MW for solar PV and a minimum of 4 000 MW of small-scale embedded generation (SSEG) to be procured by 2030, which has the potential of attracting in excess of R420-billion in the next 12 years.

According to Mkhize, further market opportunities include an increase in local manufacturing potential in South Africa wind energy manufacturing, local PV panel manufacturing and local battery manufacturing.

Utility-scale battery storage development and deployment are also opportunities to look into, with municipalities exploring the option to procure directly from independent power producers (IPPs); renewal and reissuing of operations and maintenance contracts of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Windows 1 to 4’s projects; as well as the refinancing of these.

Although South Africa had yet to join the ranks of countries experiencing a steep rise in EV uptake, GreenCape indicated that it was likely that this would change as battery prices continue to fall.

The emerging opportunities remain largely in the manufacturing of electric buses, passenger vehicles and lithium-ion batteries.

Meanwhile, the South African waste economy continues to see a growing interest in the uptake of alternative waste treatment solutions and associated value chains, which has resulted in continued and increasing diversion of waste from landfill, both within the Western Cape, and the rest of South Africa.

According to GreenCape waste sector desk head Sam Smout, this is likely to accelerate in the next three to five years, and he pointed to "opportunities within the organic, e-waste, plastics and builders’ rubble sectors”.

Additionally, water scarcity has been a key driver for investment in the Western Cape water sector owing to severe drought conditions and expected longer-term water constraints in the region.

According to GreenCape water sector analyst Raldo Kruger, this year, however, there is a shift towards longer-term investment opportunities to improve water security and resilience, as key enablers of economic development.

“Specifically, the report focuses on insights and opportunities relating to two key urban water markets in South Africa, namely the industrial market and the municipal market,” commented GreenCape water sector analyst Ashton Mpofu.

Further, GreenCape also noted that there were emerging investment opportunities in remote sensing technologies for precision agriculture applications; undercover farming, which includes low-tech infrastructure such as shade netting and higher-tech controlled environment agriculture systems; and well-established investment opportunities in renewable energy and conservation agriculture.