As role-players in South Africa’s renewable energy sector gear up to make submissions in Bid Window 5 (BW 5) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the South African Wind Energy Association (SAWEA) and the South African Photovoltaic Industry Association (SAPVIA) have hosted a capacity-building webinar to get insights from sector heads and thought leaders.
The deadline to submit applications for BW 5 closes on August 4.
The BW 5 local content threshold has been retained at 40%, in line with previous rounds, which SAWEA believes the industry will respond positively to.
In a release issued after the webinar, SAWEA CEO Ntombifuthi Ntuli said the presentations highlighted different components that have local manufacturing potential and exposed participants to valuable knowledge about how to engage with original-equipment manufacturers (OEMs) with the purpose of participating in the value chain.
“Participants also learned different strategies that local businesses can use to enter the renewable energy manufacturing value chain, such as being a local subsidiary of a foreign company, a manufacturer under OEM intellectual property, a local assembler of components, in addition to other valuable insights that will help our sector draw greater economic value to our shores,” she said.
During the webinar, it was posited that, over the next ten years, the wind power industry is expected to drive an estimated R40-billion of investment each year. Of this, a fairly large portion is coming from economic benefits of stimulating the local value chain.
Therefore, according to SAPVIA and SAWEA, assuming that smooth procurement of new wind energy production continues, in line with the Integrated Resource Plan of 2019, this sector is a good vehicle for direct infrastructure investment and a positive multiplier of economic effects.
These include specialised components manufacturing such as wind turbine towers and steel mounting structures for solar PV plants, component transportation, the construction industry, engineering and logistics.
GreenCape special adviser Francis Jackson, who addressed attendees on the economics of renewable energy in local manufacturing, said that, while exact quanta from assumptions may vary, the opportunity was worth pursuing.
His presentation unpacked opportunities and barriers such as uncertainty about market consistency, technical and systems readiness, the availability of climate finance, price competitiveness of local supply, investment attractiveness in energy transition hotspots and a match between skills demand and availability.
In addressing easy-to-access projects that can drive economic stimulation by the wind sector, he identified wind tower and blade manufacturing, nacelle assembly, wind tower internal components, solar PV module assembly and a number of options should the solar sector move into vertical integration in the module value chain.
He said it was important to ensure South Africa’s wind energy sector makes the most of its local opportunity and establish building blocks for opportunities to participate in exporting components.
“Global value chain players would be well placed to make the business case as they build capacity to service the local market.”
Jackson noted that there will be certain parts of the supply chain that may emerge to be more strategically placed to cultivate capacity in South Africa than others.
Further, he added that doing so would require a suite of systemic interventions by stakeholders from industry through to government and labour, with the most notable being the rebuilding of market certainty on the back of sufficient scale.
Contributing factors may include increasing offtaker diversity; growth in demand through sector coupling, such as green hydrogen for export; consistent review and implementation of policy; refinement to bid window timing; and working in ways that enable the allocation of risk around procurement consistency and timing.