South Africa equipped on all fronts to ramp up wind turbine manufacture, rollout – Nordex
The South African Renewable Energy Master Plan’s emerging actions discussion document represents a significant opportunity to create new jobs and contribute to South Africa’s gross domestic product (GDP) through yearly production across the value chain, says renewable energy developer Nordex Energy South Africa.
Through implementing the plan, the country’s GDP is expected to receive an up to R182-billion-a-year boost, while the employment of 39 000 people will be required to deliver 2 600 MW of new renewable energy capacity a year by 2030.
To implement the Integrated Resources Plan of 2019 will require more than 14-million solar panels and 3 600 wind turbines to be installed.
Nordex states that much of this anticipated investment each year that is expected to stem from the wind power industry for the next ten years will come from the economic benefits of stimulating the local value chain.
Supporting this is the latest Renewable Energy Independent Power Producer Procurement Programme’s (REIPPPP’s) fifth bid window (BW5), which introduces designated local content. Over and above the 40% threshold, this also requires bidders to procure specific components locally.
In addition, Nordex points out that the Department of Trade, Industry and Competition (DTIC) reaffirms this stance on local procurement and the protection of local industry, having issued a briefing note to the Department of Mineral Resources and Energy’s Independent Power Producer Office, which was re-issued on January 28.
The note addresses the DTIC’s policy position with regard to designated items and the specific condition that only locally produced or manufactured goods meeting local content stipulations will be considered.
The DTIC clarified that the exemption of steel and steel components for wind towers is not granted, in support of local production and content – a significant positive measure for South Africa’s economy as wind turbine towers constitute 20% of the value of a complete wind turbine.
Further, Nordex states that this is a positive multiplier of economic effects, as the ruling helps to drive local investment, jobs and skills.
The company adds that local original equipment manufacturers are certain they have more than enough capacity to supply the demand, not only for BW5, but further procurement rounds that are expected to proceed later this year.
South Africa stands in good stead to capitalise from increased wind turbine rollout as a result of it having a local steel tower manufacturing facility with significant capacity and two local pre-cast concrete facilities – in the Western Cape and Northern Cape – which recently produced concrete towers for the Copperton and Garob wind farms.
Another advantage for the local economy is that these concrete towers are 100% local, including raw material such as concrete and rebar steel, aggregates and labour. Therefore, Nordex says this industrial strategy is aligned with the Just Energy Transition Policy and one of many primary benefits of the South African government’s REIPPPP.
Nordex Energy South Africa MD Compton Saunders says the wind industry is certain that South Africa has more than enough capacity to supply the demand and meet the DTIC’s requirements.
“This is based on the assumption that, on average, the wind turbines installed in this latest bid window have a unitary power of 5 MW, and that the local industry can manufacture more than 2 GW of towers annually, which is 30% to 40% more than the 1.6 GW of BW5’s capacity,” he says.
Nonprofit organisation GreenCape reports that as the industry gears up to meet the 24 GW of new renewable energy build by 2030, the need for local value creation will increase exponentially, to ensure that the sector contributes to the country’s infrastructural needs, just transition objectives, job creation in transitioning sectors, and establishing a local manufacturing base.
“Job creation and skills development will be a direct result of these consecutive bidding rounds, as they enable local manufacturing to be re-established,” concludes Saunders.