Operations at the manufacturing plant, responsible for producing the 120 meter high towers, are set to commence as early as May, supplying a trio of wind farms totalling an installed capacity of 336 MW. Photo: Supplied
Renewable industry experts yesterday welcomed Nordex Energy South Africa’s plans to locally manufacture wind turbine concrete tower sections in the Eastern Cape, saying it was a welcome investment boost.
A total of 300 jobs will be created within the region.
However, the value of the deal was not disclosed.
The purpose-built manufacturing facility will be situated in Humansdorp, approximately 1.5 hours from the Port of Ngqura, where the remaining turbine components will land.
Operations at the manufacturing plant, responsible for producing the 120 meter high towers, are set to commence as early as May, supplying a trio of wind farms totalling an installed capacity of 336 MW.
David Moncasi Hortet, Nordex Energy South Africa’s head of sales for Africa said the wind farm cluster would elevate the share of renewable energy in the country’s energy mix, contributing to energy security and a reduction in greenhouse emissions.
“Additionally, it will enhance our market presence in South Africa, where we currently command over 32% of market share, operating more than 1.1 GW, predominantly in the Eastern Cape.”
Situated in the Eastern Cape Province, the cluster of wind farms in the Jeffreys Bay area, close to Impofu Dam, would harness the area’s commendable wind resources, solidifying its position as one of the country’s most prominent wind power zones on the renewable energy map, boasting a total of 13 wind farms.
The installation of the first turbines was scheduled for the second half of this year, with energy delivery to the grid anticipated in the second half of next year contributing to addressing the country’s energy deficiency.
Having invested in the Eastern Cape since 2013, Nordex Energy South Africa boasts a significant footprint in the province, including a warehouse in Gqeberha and 573 MW of installed capacity across five wind power plants.
The Eastern Cape Province has among the best wind energy resources in the world, good quality solar resources, as well as optimal enabling conditions.
“The province is already an important hub for us, as we have a head office here as well as a warehouse, in addition to the numerous wind farms,” Hortet said.
Dipak Patel, the head of Climate Finance, Investment and Innovation at the Presidential Climate Commission (PCC), welcomed the investment.
"This investment signals a significant commitment by the private sector to building the local renewable manufacturing industry, to grow investment, local content and employment in the renewable energy value chain and build the in-country skills to achieve this.
Patel said the the role of the Eastern Cape provincial government in attracting this investment was evidence that the public sector would continue to play a significant role in the energy sector.
“The job and skills development opportunities in wind energy sector are significant and the South African Renewable Energy Master plans sets the basis for expansion to unlock significant energy security, jobs, and livelihood opportunities,” he said.
Roelof van Huyssteen, PwC SA energy law expert, said, “Renewable component manufacturing and assembly was a booming market, both domestically and globally and presented an opportunity for South Africa to foster economic development, employment creation and social transformation, which was precisely what this project (Nordex) intended to do.
"Beneficiation in all instances need to be cost competitive to be sustainable for the future. As a country, business needs to identify and play to the available strengths to create real value. In order for South Africa to reach the Draft IRP 2023 allocation to wind power of approximately 4.5GW, the development of industrial value chains are critical.
“This announcement also aligns with the provisions and objectives of the Draft South African Renewable Energy Masterplan that identifies the development of local content as an essential element to roll out renewable energy capacity in the country, " Van Huyssteen said.
PwC SA said, “Amidst South Africa's rapidly escalating demand and supply limitations, fostering local industrial capabilities for producing renewable energy components emerges as a strategic approach. In what could become a globally constrained supply environment, this development could support stable supply for the domestic market and provide some but safeguards against price volatility risks," he said.
Although this was a step in the right direction, policy and regulatory reform was required to drive increased investment in renewable component manufacturing.
"In this regard regulatory incentives can be considered such as the re-activation of the section 12i tax allowance incentive set out in the Income Tax Act with a focus on supporting the development of renewable energy manufacturing value chains.
“International experience in other countries show that development of competitive and not artificially supported renewable energy value chains would be no-regret interventions given additional benefits associated with manufacturing such as job creation, and economic development, Van Huyssteen added.
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