IDC EXPLORE WIND SECTOR INDUSTRIALISATION
September 2022, Cape Town, South Africa
South Africa’s accelerated energy transition and its push for sector industrialisation, will be led by increased local manufacturing, with a projected target of well over 55% for government procurement by the end of this decade. To achieve this, government’s support through policy, smooth procurement and investment will be the key enabler. Noting this, the Industrial Development Corporation (IDC), South African government’s development funding agency, which plays a pivotal part in the country’s energy transition and seeks to stimulate increased localisation of renewable energy inputs, has sent a delegation to Spain to visit Nordex SE’s wind turbine manufacturing facilities.
The IDC delegation comprises Imran Sayed – Divisional Executive: Manufacturing; Kugan Thaver –Head: Machinery Equipment and Electronics; Mukesh Ramjee – Business Development Manager: Machinery Equipment and Electronics; and Umeesha Naidoo – Industry Development Planner. The delegation is being led by Nordex Energy South Africa’s Managing Director, Compton Saunders, who will facilitate discussions around opportunities for industrialising the local wind power sector.
“In order for the Corporation to spearhead investment in the localisation of wind power components, they need to know what they are investing in and what can be expected from Original Equipment Manufacturers. To do this, it is important that the scale and complexity be unpacked, so that government can get a clear sense of the process, and for them to gauge the requirements accurately,” said Compton Saunders, Managing Director of Nordex Energy South Africa (NESA).
The delegation is due to visit both of Nordex’s blade and nacelle manufacturing facilities in Lumbier and Barásoain area. As it stands, assuming that smooth procurement of new wind energy production continues, this sector is an excellent vehicle for direct infrastructure investment and a positive multiplier of economic effects, including nacelle assembly facilities. As the market matures and volume remains sufficient the sector could expand into the manufacturing of other specialised components for wind turbines.
Wind turbine nacelles are the heart of the turbine, alike the engine room on a ship, and house critical components such as the gearbox, main shaft, generator, transformer, and electrical cabinets of which many can be locally assembled and eventually manufactured.
Compton Saunders, Managing Director of Nordex Energy South Africa (NESA), believes that the first potential step is to import components into the country, to be assembled locally and thereafter as a second phase, certain nacelle components can be manufactured in the country.
“We are certainly one step closer to partnering with government, through the Corporation, which will enable local assembly and manufacturing of nacelle components. However, we need to consider the economics and the mechanisms available to enable local cost competitive assembly in South Africa. Import taxes, special economic zones, funding support for constructing local assembly facilities and of course the volume and clear sight of the project pipeline, to make this feasible in a very price competitive environment, will need to be unpacked,” explained Saunders.
Considering that the draft SAREM estimates that annual economic growth of over R140bn will be achieved through production value, delivering in excess of 30 000 direct jobs, on the assumption of 70%-90% localisation of key components and 90% of balance of plant by 2030, local support and investment is critical.
The exploratory trip will allow for first-hand discussions with the Original Equipment Manufacturer, one of the world’s largest wind turbine manufacturers.
The IDC targets opportunities at bankable stage. With over R14 billion invested in renewable energy projects spread across the country, the IDC has also funded 25 community trusts, enabling active community participation in the Renewable Energy Independent Power Producer Procurement Programme.
BOILERPLATE: Nordex Energy South Africa Ltd. (NESA), boasts a total installed capacity of more than 1GW, making it the market leader with 32% market share on the total installed wind capacity in South Africa. By Q1 2022 NESA would have built and will be operating (O&M) nine wind farms (1.1GW) in the country, under the REIPPP Programme. The Nordex Group focuses on development, manufacturing, project management and servicing of onshore wind turbines and this has been the core competence and passion of the Nordex Group and its more than 8,500 employees worldwide for 35 years. With the acquisition of Acciona Windpower in 2016, the Nordex Group has become a global player and one of the world’s largest wind turbine manufacturers.