Nordex Energy South Africa's Prieska-based concrete wind turbine tower manufacturing facility
Wind turbine original-equipment manufacturer (OEM) Nordex Energy South Africa sees Bid Window 5 (BW5) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) as an important link in driving the local value chain, saying it will directly stimulate the domestic job market.
MD Compton Saunders says the wind power industry is expected to drive an estimated R40-billion of investment each year over the next decade, with a fairly large percentage to come from the economic benefits of stimulating the local value chain.
“This includes local manufacturing, transportation and other related industries.”
He adds that the option of concrete wind turbine towers has the added advantage of boasting close to 100% local content, including raw material such as concrete and rebar steel, aggregates and labour, in addition to offering the option of manufacturing at site.
“Currently, Nordex is the only supplier of local concrete towers, which are manufactured by the local industry, create local jobs and skills directly at site, as the manufacturing facilities can be set-up close to the project facility during construction,” says Saunders.
This industrial strategy is aligned with the Just Energy Transition Policy and one of many primary benefits of the REIPPPP, he adds.
Assuming smooth procurement of new wind energy production continues, Nordex, in a statement, says that, in line with the Integrated Resource Plan (IRP), the wind energy sector is an “excellent vehicle” for direct infrastructure investment and a positive multiplier of economic effects. These include specialised components manufacturing, such as wind turbine towers, the construction industry, engineering and logistics.
The company further states that wind energy sector experts point out that, although it is still to be confirmed whether South Africa is well positioned to be competitive at a global scale in all components, the first step is to ensure industry makes the most of local opportunity and builds capacity to supply the local market.
Further, Nordex notes that certain parts of the supply chain may emerge to be more strategically placed to cultivate capacity in South Africa than others to be able to be competitive.
The BW5 local content threshold has been retained at 40% – in line with previous rounds; however, the scoring mechanism incentivising further commitments above 40% has been removed from the request for proposals regulation.
For the first time, the REIPPPP has introduced the concept of designated local content, which requires developers to procure specific components locally, such as steel. Should these components be unavailable, bidders can apply for an exemption, which needs to be lodged with the Department of Trade, Industry and Competition.
However, Nordex believes this should not be applied to tower production, as both local and international companies have already invested in local manufacturing facilities that successfully produced these components for the previous REIPPPP rounds.
Moreover, these OEMs have confirmed capacity to fully deliver the required towers for BW5, as well as future bid windows.
With the announcement of BW5 under the REIPPPP, which includes 1 600 MW from onshore wind energy, and BW6 expected to be announced in the first quarter of 2022, the wind power sector is gearing up to deliver adequate energy to the country and help shift the economy onto a positive trajectory.
“Job creation and skills development will be a direct result of these consecutive bidding rounds, as they enable local manufacturing to be re-established or continue in the case of our concrete towers,” says Saunders.
The most recent REIPPPP project to come on line – the 145 MW Garob Wind Farm, which reached commercial operations in December, incorporates 46 wind turbine generators with AW125-3150 technology, as well as concrete towers. This plant is able to generate 573 GWh/y during its 20 years of operations.
The construction of Garob Wind Farm, which commenced in April 2019, used concrete towers fully produced in the manufacturing facility set up in Prieska, which is 40 km from site.
The work was completed by local contractors, providing employment for over 500 people from the local community at the peak of the construction phase of the project.