SA’S ENERGY TRANSITION DELIVERS ON MANUFACTURING JOBS
South Africa’s energy transition is poised to unlock economic growth and deliver thousands of much needed new jobs, at a time when the country faces staggering unemployment rates that threaten to continue well into the new decade. Thousands of jobs await a Ministerial Determination to give a green light for the next round of wind farms to be built.
“The positive impact of continued wind farm construction on the economy, over the next ten years, cannot be overstated. In the construction phase wind energy projects make a significant impact on jobs in different parts of the value chain,” explained Ntombifuthi Ntuli, CEO of the South Africa Wind Energy Association (SAWEA).
Twelve wind farms are currently being constructed across the country achieving thousands of jobs as well as high levels of local content, which is in line with Minister Gwede Mantashe’s stated imperative that the renewable energy sector, wind stakeholders included, increases its local content efforts.
Perdekraal East Wind Farm, the Western Cape’s largest BW4 wind farm, which is currently under construction and providing local employment to community members of Ceres, Nduli, Bella Vista and Prince Alfred Hamlet is just one of these projects that are helping to drive the local sector.
“We are pleased to confirm that our obligation for local content exceeds 48% of the total project value, making this a truly South African endeavour,” said Glenn Hobson, Construction Project Manager for Perdekraal East Wind Farm.
Over the next ten years, which brings on an average of 17 new wind farms each year, South Africa will see the local manufacturing sector helping to boost economic growth and job creation, two priorities across the African region. Tower manufacturing facilities are already set up in the country, with additional capacity and facilities awaiting the governments next bid round as part of the Renewable Energy Independent Power Producers Procurement Programme (REI4P).
“Looking specifically at the manufacturing sector that is poised to create jobs, the annual capacity of 1 600 MW per annum translates to 640 individual towers and 1 920 wind turbine blades, each year,” explained Ntuli.
The existing local tower manufacturing facility in Atlantis, on the Cape’s West Coast, currently produces 150 towers per annum and has created 340 direct jobs and 200 indirect jobs. Therefore, manufacturing 640 towers locally can potentially create 1 360 direct jobs and about 800 indirect jobs.
DCD Wind Towers, in Nelson Mandela Bay, closed its doors in April this year, due to the halted REI4P procurement. The plant, which has a potential to manufacture up to 300 towers and create 142 direct jobs, is now looking for an investment partner, to revitalise production and local jobs.
Additional potential exists, should wind tower blades and other components such as drive trains be manufactured locally, the number of jobs could easily scale up to the 8 700 estimated by the Council for Scientific and Industrial Research (CSIR) analysis.
The CSIR analysis indicates that for 1.6 GW per annum roll-out, the wind energy industry can contribute to the creation of more than 16 000 direct jobs per annum in the South African economy during the construction phase alone, given that the aggregate level of localisation of about 50% is realised.
This equates to about 6 400 direct jobs in the construction sector, about 8 700 direct jobs in the manufacturing sector, about 820 direct jobs in the transportation and logistics sector and about 640 direct jobs in the finance, professional and business services sector.
“The wind energy’s contribution to job creation is often questioned because the jobs are concentrated in the 24 months construction phase of each wind project, hence society tends to dismiss these jobs on the basis of their short term nature, however, considering the smooth procurement outlined in the 2019 Integrated Resource Plan, 1.6 GW is going to be commissioned annually from 2022 to 2030 and will deliver thousands of jobs for a decade,” concluded Ntuli.
Note: According to the IPP Office Publication, Focus on Wind (June 2019) the wind energy industry has contributed to the creation of 10 892 jobs across the value chain during construction phase from Round 1 to Round 4 (which has a combined capacity of 3.4GW). The 22 wind IPPs that have successfully reached commercial operations to date have reported 2169 O&M job years for SA citizens. Over the operational life of the full wind portfolio (BW1 to BW4, 1S2 and 2S2), 32 140 job years are expected to be created for SA citizens.