6 years ago

Eastern Cape Business 2017 edition

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The 2017 edition of Eastern Cape Business is the 10th issue of this highly successful publication that, since its launch in 2006, has established itself as the premier business and investment guide to the Eastern Cape Province. The Eastern Cape enjoys an abundance of natural and human resources, as well as established industrial infrastructure that drives the economy of the province. This includes three ports and two industrial development zones which are home to a wide range of manufacturers and exporters. The 2017 edition includes an in-depth look at the province’s two Industrial Development Zones, a focus on skills development and investment climate information from the Nelson Mandela Business Chamber and the Border-Kei Chamber of Business.

OVERVIEW Energy Gas and

OVERVIEW Energy Gas and renewable energy are creating a new energy landscape. SECTOR INSIGHT A large LNG plant has been allocated to the Coega IDZ. • Wind power projects have mushroomed in the Eastern Cape. Anumber of major projects are transforming the energy sector in the Eastern Cape. Between October 2015, when the 335MW Dedidsa peak power plant started operating within the Coega Industrial Development Zone outside Port Elizabeth, and October 2016, when the national Department of Energy announced that the same site had been chosen to be location of a 1 000MW Liquefied Natural Gas (LNG) plant, hundreds of megawatts were connected to the national grid as the province’s many new wind farms kicked into operational mode. The Liquefied Natural Gas Independent Power Producer Procurement Programme is part of the broader programme of the Department of Energy which encourages private investment in renewable energy, namely the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Fully a quarter of the projects so far approved in this national programme have been allocated to the Eastern Cape with 91% of these being wind projects and the balance solar photo-voltaic. A vast new industry has been created in a very short space of time, and it is clear that investors still have appetite for more. Gas The Dedisa power plant is one the first gas-fired plants in the country to be run by a private consortium. Engie (formerly French firm GDF-Suez), Legend Power Solutions, Mitsui (Japan) and the Peaker Trust which represents local residents, have jointly signed a 15-year power purchase agreement with Eskom. The new LNG facility will not only inject some R25-billion into the regional economy, but confirm a shift to gas as a power source which is one of national government’s recently announced objectives. Large commercial gas companies such as Afrox and Air Products have plants within the Coega IDZ. First Automobile Works has established its motor assembly plant next door to Air Products’ air separation unit, allowing it ready access to the industrial gas that it needs. Liquid oxygen and nitrogen play important roles in the metals processing sector for cutting and laser applications. The company believes that having these gases readily available plays strategically into the provincial government’s industrial development strategy. EASTERN CAPE BUSINESS 2017 44

OVERVIEW Renewable energy If the power produced through the REIPPPP were to be consumed where it is made, the Eastern Cape would soon be producing 60% of its own needs (the power is in fact sent to the national grid for redistribution). The province consumed 8 358GWh of electricity in 2015 or 3.7% of the national total. The average lead time in the 11 projects that have so far been approved in the province is two years, with local content averaging out at about 47%. When the projects are complete, R142.9-billion will have been spent on procurement, R65.7- billion of which will be local. Wind projects in the province include Globeleq’s 138MW Jeffrey’s Bay facility, the 140MW Cookhouse project (African Clean Energy Developments) and two run by Cennergi at Tsitsikamma (94MW) and Bedford (134MW). Cennergi is a joint venture between South African resources company Exxaro and Indian company Tata Power. There are a number of other projects with capacities ranging from 20MW to 97MW. Scatec Solar has commissioned a plant in Burgersdorp. The 75MW plant has panels mounted on single axes, enabling them to track the sun and optimise electricity generation by a further 20%. The Coega IDZ is working on positioning itself as a renewable energy hub. The Department of Trade and Industry (dti) offers various green technology incentives. Electrawinds, Universal Wind and DCD Wind Towers are three RE companies with a presence in the Coega IDZ. The energy sector is also creating potential for manufacturers. In the East London Industrial Development Zone (ELIDZ), for example, Spanish firm ILB Helios is producing solar panels units for use in the South African market. Other Eskom is pursuing plans for more nuclear power to be added to the national grid. One of the possible sites is Thyspunt near Cape St Francis. There is strong opposition from archaeologists and environmentalists. The discovery of shale gas reserves in the Karoo Basin may offer another opportunity but the topic is almost as controversial as the nuclear option, as opponents of “fracking”, as the recovery process is called, argue that underground water supplies might be contaminated. Small-scale hydropower projects have some potential in deep rural areas. The largest of the province’s four hydropower stations, Colley Wobbles in the Mbashe catchment area (maximum capacity 42MW), has been ineffective due to rising silt levels. The Umzimvubu Dam project is expected to add power to the grid. Two bio-digesters have been commissioned in the Keiskammahoek area. A community training centre runs the project which supplies fertiliser and gas for cooking. A bio-ethanol project intended for Cradock has been delayed for some time by uncertainty about what feedstock to use. The Eastern Cape Rural Development Agency, supported by the Industrial Development Corporation, is working on a plan to incentivise producers without affecting food security. ONLINE RESOURCES Coega IDZ: Department of Trade and Industry: East London IDZ. IPP Projects: National Department of Energy: Southern African Biofuels Association: South African Photovoltaic Industry Association: South African Renewable Energy Association: Southern Africa Solar Thermal and Electricity Association (CSP): South African Wind Energy Association: 45 EASTERN CAPE BUSINESS 2017

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