Ignoring moves by the world’s biggest economies to decarbonise threatens to hamper South Africa’s economic growth. We need to urgently turn our vicious cycle of deindustrialisation and unemployment into a virtuous cycle of local demand for local goods, to create investment and jobs. This is the moment for South Africa to seize the opportunity to rebuild its industrial base by pivoting to a cleaner and greener future, says Eskom CEO André de Ruyter.
South Africa’s Integrated Resource Plan (IRP) 2019 sets a strong foundation for a future low-carbon energy mix, which has to date enjoyed considerable success through its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) bid windows. However, despite the significant focus on localisation contained in the bid criteria, the REIPPPP has fallen short of stimulating the low-carbon technology and component supply industry. We have the opportunity to reassess the efficacy of this model, given the changing electricity landscape.
De Ruyter calls for stronger collaboration across South Africa’s public and private sectors to ignite and realise the full potential of local manufacturing capabilities. He believes South Africa has the intellectual capability to become a formidable player in the global energy technology manufacturing space over the next decade. “In my view, a rejuvenated industrial economy is the only way of catalysing job creation in South Africa; to create and provide decent work for the millions of our compatriots who are unemployed.
For example, the local manufacturing of renewable energy components can significantly reduce costs and increase local economic growth. South Africa should aim to introduce local manufacturing of wind turbines, gas turbines and batteries. In its efforts to use targeted local content on solar PV, the country should not seek to compete with China on PV wafers but make frames, gantries and plate glass. The specification of smart local content will maximise value addition. The reskilling and upskilling of the workforce as well as the training of installers and operators should take priority. This must be coupled with the acceleration of our investment in research and embracing innovation and digital technology.
“Eskom’s support of the Electricity Forum, spearheaded by the Manufacturing Circle and supported by the IDC, and being held next week 28th & 30th September, is a foregone conclusion. We remain committed to restoring a thriving South African manufacturing industry and economy, and acknowledge that doing so will require a collective and committed effort from both the public and private sectors, as we usher our way towards the Fourth Industrial Revolution,” de Ruyter added.
Highlights of the two-day Electricity Forum will be four workshops focused on how Eskom can be turned around; how South Africa can generate sufficient electricity; how the country can move purposefully and equitably towards renewables; and how business can benefit from the process of transforming and decarbonising electricity.
Eskom is pursuing the Just Energy Transition (JET) strategy to accelerate the repurposing and repowering of stations and is actively seeking a share in renewable energy allocation in line with IRP 2019. The JET has the potential to drive local manufacturing capability by creating demand for renewable energy components, and to contribute to the establishment of new factories, through the creation of special economic zones (SEZs) and renewable energy development zones (REDZs).
“Our own ongoing analysis and work done by various research bodies suggest that through significant investment in solar PV and wind power, we could potentially create a net of 300 000 direct, indirect and induced jobs in the country over the next decade, says Eskom’s boss.
“Prior to assuming my role as of the CEO of Eskom in January 2020, I had the privilege of being chairman of the Manufacturing Circle while being CEO of Nampak. As such, I have first-hand experience of the extreme challenges manufacturers face in navigating their production demands through the electricity supply challenges while simultaneously ensuring product excellence, operational sustainability and market relevance. The impact of the electricity crisis on the economy had motivated my move to Eskom, as I believed the situation had to be turned around”, De Ruyter adds.
De Ruyter further stated, “South Africa still has an abundance of coal reserves and the time is ideal to intensify efforts around coal beneficiation for alternative uses such as the production of cost-competitive, high-value carbon fibres and nanomaterials, which is set to increase in demand worldwide.
Tangible industry and business commitment includes industry sponsorship by Actom, Amka Products, Consol Glass, Hulamin, Kap Industrial Holdings, Mpact, Saint-Gobain Construction Products South Africa and Unica Iron and Steel. Workshop sponsors comprise Cova Advisory and GreenCape, and Forum partners include ASISA, the NCPC-SA and Proudly SA.
To promote understanding of South Africa’s electricity crisis, risks and opportunities – and to encourage participation in the Electricity Forum – the Manufacturing Circle has launched a dedicated online discussion portal, www.mc-eskom.co.za.