Department of Energy director-general Nelisiwe Magubane at the Business Day Dialogue in Johannesburg last week. Picture: RUSSELL ROBERTS
Department of Energy director-general Nelisiwe Magubane at the Business Day Dialogue in Johannesburg last week. Picture: RUSSELL ROBERTS

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SOUTH Africa’s quest to build a value chain for its renewable energy programme has begun paying dividends, with some wind turbine and solar panel manufacturing companies setting up bases in the country.

In May international energy group DCD Wind Towers started work on its R300m manufacturing plant at the Coega Industrial Development Zone (IDZ) near Port Elizabeth in the Eastern Cape. DCD operates wind energy manufacturing facilities in Asia and Europe, as well as a wind turbine blade manufacturing facility at Vereeniging, south of Johannesburg.

The government’s local-content requirements for the renewable energy projects "compel international companies to enter a dialogue with local manufacturers, which … creates local employment and drives development", DCD Energy MD Rob King says.

The DCD factory will produce components for wind turbines and towers. It has a capacity to produce an initial 180 turbines a year. The company is targeting independent power producers (IPPs) recently awarded licences to sell power to the national grid, DCD marketing manager Hendrik Schoeman says.

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The DCD facility joins a few renewable energy manufacturers and other IPP suppliers that have chosen the Coega IDZ as their home.

Speaking at the Business Day Dialogue in Johannesburg last week, Department of Energy director-general Nelisiwe Magubane said: "We are beginning the development of manufacturing capacity because there is more certainty on the programme.

"It tells us the programme is going yield not only energy for the country, but also local economic development."

DCD has committed to invest R3bn in renewable energy manufacturing infrastructure and components in the past year, Coega Development Corporation’s investor services manager Donevin Lesch says. The corporation manages the IDZ.

The IPP projects either under construction or committed for the zone will create more than 6,000 jobs in the next two years, helping to turn the region into an energy hub, Mr Lesch says.

Germany’s Manz has also started to raise R1.9bn to build a solar photovoltaic panel manufacturing facility at Coega.

Manz is a 10% shareholder in Black Lite Energy, which will build a facility to manufacture up to 190MW in panels a year. Black Lite’s clients will mostly be companies that have won tenders to sell electricity generated from solar panels to Eskom under the IPP programme.

The amount and pace of activity at the IDZ means the landscape of the Eastern Cape, a province starved of development, will have changed significantly.

"By next year the landscape of Coega IDZ will have morphed completely," says Sandisiwe Ncemane, Coega Development Corporation business development manager in the energy sector.

While the current IPP licencees are a major attraction for the factories being built, they are likely to generate revenue from export opportunities once other parts of Africa realise the benefits of the wind and sun they have in abundance.

Even though South Africa has no renewable energy market to speak of yet, its IPP programme is fostering an advanced green energy industry — something that will benefit the country when the continent begins to invest in green technologies.