Welcome to our Sustainability in Manufacturing guide. It’s been a very interesting experience putting it together, and quite an eye opener. There’s a lot going on out there and I hope it’s brought some insight into this huge revolution that’s happening around us. Nowadays we are being fed plenty of negative information about the power situation in South Africa, brought into stark focus by Andre de Ruyter’s book, so I thought I would have a look at some of the more positive things that are going on at grass roots level, politics notwithstanding.
We have abundant solar and wind resources, and the minerals needed for the rapidly evolving technologies on the way. New renewable energy capacity is now cheaper than nuclear or coal, and tariffs have decreased by 76% for solar and 55% for wind. The energy market today is very different from when South Africa suffered its first loadshedding in 2007, when we were all shocked. Increasing amounts of our energy are being supplied by renewable sources, with more to come. The renewable energy sector has already made a contribution to SA’s infrastructure development, with billions being pumped into the economy.
A whole raft of policies has been introduced by government to assist with the energy transition, and the acronyms are coming thick and fast. The main ones are the IRP and the REIPPPP which we all know about. South Africa will keep using coal as its main power source, but aims to change the energy mix to 59% coal and 27% renewables by 2030. This will reduce carbon emissions, attract investment and create much-needed jobs – resulting in a hugely positive impact on the economy. To date REIPPPP has successfully procured 6,4 GW from 112 IPPs. Government has also lifted the licensing threshold for private power generation and will build 8000 km of much-needed transmission grid to connect new power projects. Self-generation projects, wheeling, microgrids and battery energy storage (BESS) are in the pipeline. Meanwhile households and businesses have installed 4,4 GW of solar to help with loadshedding.
A just transition
It’s critical that the energy transition doesn’t ignore the fears of the people who have contributed to the coal industry over the years. It cannot just leave a ‘rust belt’ of coal mines, power stations, ghost towns and devastated communities in its wake. At COP 27 last November, President Ramaphosa launched the new Just Energy Transition Investment Plan (JET). Key investments under JET include decommissioning of old coal-fired power plants and repurposing them with clean technologies; decarbonising the automotive sector through EVs; green hydrogen manufacturing; and investment in skills development.
Komati power station is already decommissioned, and Camden, Grootvlei and Hendrina are next. Komati is being replaced with solar and wind systems, while workers are being reskilled. Nearly 300 000 jobs could be created in the construction, operation and maintenance of these new plants. Another solution is community ownership, where local communities hold equity in renewable energy facilities. A good example is Matla A Bokone Solar near Kimberley, which has a community property association as landlord, and has transformed the local community.
Green hydrogen
Green hydrogen has been catching the eye of foreign investors, and we have a story on this. Creating a hydrogen economy could attract $106 billion in new investment by 2050 and support the creation of 370 000 jobs, according to research by IHS Markit.
There are over R300 billion worth of green hydrogen projects in the pipeline. Those already under way include a green ammonia plant in Nelson Mandela Bay that will produce 780 000 tons of green ammonia a year. Full operation is planned for 2026. The Prieska Power Reserve will also produce green ammonia in 2026. The project was founded by black-owned, women-led Makhlako a Phala. It is expected to create more than 10 500 jobs. Other projects include a facility by Sasol at Boegoebaai in the Northern Cape, and the Hydrogen Valley initiative across Limpopo, Gauteng and KZN.
It can sometimes feel like we are taking two steps forward and one step back (or the other way around), and in the midst of our energy crisis, it’s easy to lose sight of the big picture, which shows an energy sector that is undergoing transformation to a more liberalised market where the economy is becoming less dependent on Eskom. The legendary Wall Street fund manager John Templeton once said: “Bull markets are born on pessimism, grow on scepticism and mature on optimism.” Maybe this could apply to our energy situation. Who knows what the energy scene will be like in 2030, let alone 2050?
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