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From the editor's desk: One year ahead

Technews Industry Guide: Sustainable Manufacturing 2024 News


Kim Roberts, Editor

Welcome to our Sustainable Manufacturing Industry Guide. Since our last issue, things have changed quite a bit in the energy world. A year ago we were in Stage 6 loadshedding, and government policies, although gazetted, were still holding back private sector players from taking matters into their own hands.

Now, many of us have a solar panel system on our roof, and loadshedding appears to be mainly a thing of the past. Energy wheeling is becoming commonplace, and BESS systems are making their mark. Private power production is becoming an increasing factor, and reforms in Eskom are starting to have an impact; and South Africa is making a huge investment into the development of green hydrogen, as you will read in this issue. Even the problems at our ports are looking more promising, with Grindrod being appointed as the preferred bidder at Richards Bay to build substantial container handling capacity to upgrade it from a coal terminal. They are calling it concessioning (not privatisation).

Green hydrogen and green ammonia are suddenly upfront as potential energy sources, both locally and internationally. We have a number of contributions on this topic, for example from Pepperl+Fuchs, Parker Hannifin and Mecosa, and I wish I could have included more. Behind the scenes there are big players working to overcome the challenges, both here and in Namibia, and we can expect plenty of developments at Coega in Gqeberha and the new port under way at Boegoebaai in the Northern Cape. Meanwhile I continually see reports of yet another large solar installation somewhere in the country.

What happened

So what changed? The answer is that demand for Eskom electricity has declined because of a weak economy, its rapidly rising price, and loadshedding. People have responded by moving to alternative energy sources like rooftop solar, battery energy storage, gas for cooking, solar geysers, and energy efficiency measures like lagging your pipes. In addition, a pipeline of large renewable energy and battery energy storage plants is now coming onto the grid, and this trend is accelerating.

On the regulatory side, the lifting of licensing requirements for large-scale generation projects has played a large role in this growth. The industry is now starting to be fuelled by private generation; and the unbundling of Eskom’s infrastructure monopoly and the mining industry’s shift towards renewable energy have further fuelled this shift.

The result

Escalating debt is finally forcing Eskom to restructure and unbundle. At last, the private sector can be involved in all of the three legs – generation, transmission and distribution – by providing resources and infrastructure for finance, construction, operations and maintenance. In the generation sector, a diversified and competitive power generation industry is emerging. This includes Eskom, public-private partnership generators, municipal generators, hundreds of independent power producers, and thousands of prosumers, who both produce and consume electricity.

So what’s next?

The next big challenge is transmission, so that all these new sources can reach the national grid. Private transmission through the IPPs is taking off. The National Treasury has confirmed that South Africa is moving to pilot a model that will enable the private sector to participate directly in the development and operation of transmission grid infrastructure, drawing lessons from the country’s experience in procuring generation capacity from IPPs. We can expect new transmission corridors to be developed and run through public-private partnership concessions.

New projects

There are downstream opportunities too. South Africa has a strong base for manufacturing key renewable energy components. We have a steel and cement industry for towers, an extrusion industry for mounting structures, an electrotechnical industry for key electrical components, and a sophisticated mining industry for raw and semi-processed PGM metals for use in batteries, electrolysers, and fuel cells.

Local areas are also getting onto the bandwagon. One example is Cape Town, which is positioning itself as a cleantech hub at its Atlantis GreenTech Special Economic Zone. It’s strategically located near renewable projects, and has access to key resources, attractive investment incentives, and modern infrastructure, including a well-functioning harbour. It has transformed the area into a vibrant hub for renewable industries. We can expect more of these hubs in the major centres.

There is a sea of change happening in our energy industry as it starts to catch up with the rest of the world. We are not yet there, and all could be undone by players with a vested interest in holding on to the failing status quo, but there is reason for optimism. The pace of reform is gathering ground, driven by economic necessity and the need for decarbonisation and a secure supply.

I would like to think that the glass is half full.


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