Government must urgently amend energy supply chain to reflect post Covid-19 reality
Government needs to insist on more local content in the supply chain to ensure energy security for South Africa. This is the call by energy players who anticipate a changed global economic reality post-Covid-19.
South Africa’s blueprint of government plans for energy, the Integrated Resource Plan (IRP), requires the country to build 25,000–30,000MW of power by 2030, of which wind is set to contribute 18%.
After a nearly three-year hiatus in the programme, in April 2018, Eskom entered into power purchase agreements for 27 large-scale renewable energy projects procured in round 4 of Renewable Energy Independent Power Producer Programme (REIPPP). The IRP was released in 2019 and is awaiting processing by the National Energy Regulator of South Africa (Nersa), before generation capacity can be procured. The regulator has released consultation papers for both the supply of emergency power and short to medium term energy supply, which should see the process finalised by the end of the year. Meanwhile, the Minister of Energy has made a Section 34 determination which allows for energy generation. All that remains is to set in motion the procurement for REIPPP round 5.
“It would be a travesty if local wind farms import components and towers from other countries when they are available here. Local content requirements should be increased and must be consistently applied in the rush to add energy to the grid. Industry is ready to partner with government to speed things up and ramp up local production,” says Marubini Raphulu, Hulisani CEO.
For example, GRI Towers opened its wind tower manufacturing plant in 2014 in Atlantis in the Western Cape, creating over 300 jobs and developing key skills in the process. The plant has the capacity to manufacture over 150 wind towers per year – this is the equivalent of supplying 400MW in new-build wind farms per annum. However, until the REIPPP round 5 procurement is implemented, wind projects cannot move forward, and it is becoming increasingly difficult to motivate our international shareholders to wait it out,” says Daniel Erasun, plant manager at GRI Towers South Africa,
