HLUMELO NCOPO | Wind technology points to better energy, employment future for E Cape

Later this year, the Eastern Cape will convene an investment conference with the aim of presenting investment opportunities that exist in the province.

The province appears to be the preferred location for investment by independent power producers in the wind sector. Testament to this is the levels of investment in wind technologies we witness throughout the province stretching from Cookhouse to Jeffrey’s Bay to Waainek to Komga and most recently in the Chris Hani region. 

Since the bid 1 window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP), approximately R20bn  has been invested by the South African wind industry in the province, with wind farms blossoming on every corner of the province.

For a province that is not well endowed in coal, this should be the entry point into the energy policy and just transition debate but major considerations have to be made about ways to leverage on the upsurge in wind technology investment in the province. The province is in a prime position to establish itself as a hub of wind industry, while diversifying the provincial economy. 

Job creation is one of the leading variables in the awarding of renewable energy contracts. The Eastern Cape is ranking as one of the highest unemployment rate in the country will be interested in the job creation capacity of wind industry as a third of jobs in this sector are created through the manufacturing of components needed for turbines while two thirds are subsequently created in the construction, running and maintenance of wind farms.  

Empowered with four universities, the province can leverage on the institutions train and skill youth in the management of wind farms, partnering with institutions charged with training and activating the provincial labour market.

The province is also relatively industrial with proven capabilities in the automotive sector, with well-designed and targeted incentives, these capabilities can be repurposed for the manufacturing of wind technology components however, without a coherent provincial industrial strategy linked to the Integrated Resource Plan (IRP), this will not be possible.  Policy making involves making trade-offs, rather than taking absolutist positions.

The Eastern Cape has less incentive to religiously defend coal in the energy policy and just transition debate as there is no coal value chain to speak off in the province but a lot of wind and sun to be taken advantage off. The coal lobby may argue that the important automotive sector in the province needs coal powered electricity for manufacturing and production, this may be true but recently even private companies are exploring ways to generate their own electricity given the unreliable supply from Eskom and its impact on production.

Embracing wind renewable energy will inadvertently position the province as a key stakeholder in doing the heavy lifting of lobbying Eskom, DME and national treasury to procure more electricity from independent power producers in the wind industry.

This is because investment into wind technologies is driven by the extent to which Eskom procures more electricity from independent power producers in the wind sector however, before the province does anything, the province has to consider its own position in the wind value chain and how this position can be leveraged to benefit the inhabitants of the Eastern Cape.

Given that there is little to no investment in this sector coming from government, provinces are compelled to scramble and compete for new investments into priority areas, leadership of the Eastern Cape should not afford to bottle this opportunity and be left behind by other provinces like the Northern Cape.

Ncopo is the managing director of Optimus Analysis, a public policy and strategy development firm.