Manufacturing and construction to benefit from renewables

11 April 2018

South Africa’s manufacturing and construction industries stand to benefit from renewed momentum of the renewable energy programme, following the recent conclusion of power purchase agreements (PPAs) for 27 projects procured under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The local-content requirements of the REIPPPP should aid in the recovery and growth of the domestic manufacturing industry, which was impacted by the over two-year delay in the programme. Several energy component manufacturing facilities had to retrench staff, owing to a lack of orders when the REIPPPP stalled in 2015.

The South African Wind Energy Association has expressed its commitment to ensure that the REIPPPP continues to contribute to job creation, advancing the transformation agenda and attracting foreign direct investment. CEO Brenda Martinsays that much of the investment will be in the manufacturing sector, the recovery of which is critical to job creation and driving down the price of renewable energytechnology.

While opponents of the recently signed PPAs argue that the project are a threat to jobs, Green Cape CEO Mike Mulcahypoints out in a statement that renewable energy has a proven global record of job creation, with 8.1-million jobs having been created by 2015. He adds that the REIPPPP’s localisation targets should safeguard local manufacturing capacity and jobs.

Mulcahy says manufacturing facilities linked to the REIPPPP have each seeded an entire ecosystem around it, including small and medium-sized enterprises making ancillary components, as well as training facilities for skills development.

Altantis Special Economic Zone (SEZ) project officer Thabo Thularebelieves that “well thought-out and consistently implemented” procurement policies should put the “renewables ecosystem” back on a path for growth, noting that prior to the stalling of the REIPPPP, the overall industry had employed 28 000 people.

The signing of the PPAs for the 27 projects, which have a combined capacity of 2 300 MW, brings to 112 the number of IPPs procured under the REIPPPP since 2011. Should all the projects reach financial close, the agreements will open the way for investments worth R56-billion.

Mulcahy points to the creation of the Green Technology SEZ in Atlantis, in the Western Cape, as a deliberate attempt to create domestic manufacturing capacity, with specific opportunities in renewable energy.   

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