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Eastern Cape Business 2020 edition

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  • Eastern
  • Cape
  • Mohair
  • Mandela
  • Nelson
  • Nedbank
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The 2020 edition of Eastern Cape Business is the 13th edition of this highly successful publication that, since its launch in 2006, has established itself as the premier business and investment guide for the Eastern Cape. The Eastern Cape’s investment and business opportunities are highlighted in this publication. One of the province’s unique economic assets, the mohair industry, is highlighted in a special feature while the occasion of the 10th birthday of the Nelson Mandela Bay Stadium is celebrated in an article on tourism and events. Overviews are provided on the key economic sectors of the province, including the increasingly important Special Economic Zones and energy, where the Eastern Cape is leading the nation in attracting investment in wind power. The major business chambers in the province have made contributions to the journal.

OVERVIEW Energy Offshore

OVERVIEW Energy Offshore gas finds could be transformative. Wind tower blades arriving at the Port of Ngqura. Image: Keith Arkins. Although the Eastern Cape is making a name for itself as the home of wind power, solar energy and related manufacturing are making a bid for a place in the sun. 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%. A solar tracking system manufacturer based in Port Elizabeth has achieved a rare level of certification at its purpose-built climate test chamber. PiA Solar has won several contracts for large solar farms in the national Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The East London Industrial Development Zone (ELIDZ) is home to renewable energy manufacturing facilities such as the ILB Helios Solar Panel Assembly. If recent offshore gas finds in the Southern Outeniqua Basin (Brulpadda) prove as rich as first indications suggest, and if companies can find the money to extract it, the potential to transform the Sector Insight Eight renewable energy manufacturers have invested more than R1-billion. Eastern Cape is enormous. Both the Coega SEZ and the East London IDZ are geared for maritime services and the value chain of the oil and gas sector is complicated and long. Another possible gamechanger is the decision by national government to name the Coega SEZ as the potential site for a 1 000MW Liquefied Natural Gas (LNG) plant. EASTERN CAPE BUSINESS 2020 34

OVERVIEW The value to the regional economy of the project is estimated at R25-billion. A 342MW gas-fired power plant (Dedisa) has started operating at Coega, and there are plans to expand this sector. The Eastern Cape is now home to 15 wind farms. More than half the wind farm projects so far approved in the REIPPPP have been allocated to the province. The Kouga area west of Jeffreys Bay and the Cookhouse/Bedford area about 95km north-west of Makhanda (Grahamstown) represent two wind power hubs, with a collective capacity of 1 185MW. South Africa’s National Development Plan (NDP) requires 20 000MW of renewable energy by 2030 and wind power technology, together with solar photovoltaic, are the two primary methods of reaching that target. One of the unfortunate side effects of the refusal by national utility Eskom to buy renewable power for two years was the closing down and auctioning off of a wind tower manufacturing plant in the Eastern Cape. DCD Wind Towers was a joint venture between the DCD Group and the Industrial Development Corporation (IDC) at Coega. The South African Wind Energy Association (SAWEA) has issued a Commitment Statement which noted that the REIPPPP has a “built-in demand for local procurement”, not only offering business opportunities to local companies, but also incentivising the industry to identify and support emerging entrepreneurs. The rollout of renewable energy has met some resistance in South Africa from constituencies as diverse as coal-truck drivers and advocates of nuclear power. In response, renewable energy advocates cite not just investment figures, but they note how much good work has been done in communities. Figures released by SAWEA showed shareholding for local communities reached an estimated net income of R29.2-billion over the lifespan of the projects. Some 14 000 new jobs are expected to be created, mostly in rural areas, and more than R30-billion has already been spent on Black Economic Empowerment (BEE) in the construction phase. Part of the SAWEA Commitment Statement reads, “Our aim over time is to transform and indigenise leadership at all levels in the South African Renewable Energy sector.” The average lead time in the 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. Online Resources IPP projects: www.ipp-projects.co.za National Energy Regulator of South Africa: www.nersa.org.za South African Renewable Energy Council: www.sarec.org.za South African Wind Energy Association: www.sawea.org.za Wind projects in the province include Globeleq’s 138MW Jeffreys Bay facility, the 140MW Cookhouse project (African Clean Energy Developments) and two run by Cennergi at Tsitsikamma (94MW) and Bedford (134MW). Resources company Exxaro recently bought out the Indian partner with which it initially partnered to create Cennergi, Tata Power. There are several other projects with capacities ranging from 20MW to 97MW. POWERX has signed up with AKM Foods to supply power to all the KFC outlets in Nelson Mandela Bay. POWERX trades in renewable energy through licences granted to it by the national energy regulatory authority, NERSA. By aggregating power purchases, the company is able to mitigate risk in a way that an individual purchaser may not be able to. POWERX now supplies over 40 national and local customers in Nelson Mandela Bay and its aim is to expand the customer base. The support of two of South Africa’s biggest institutional investors, the Industrial Development Corporation (IDC) and the Public Investment Corporation (PIC), has been crucial in getting the renewable energy sector off the ground. They have also played a role in helping communities fund their participation in community trusts. According to Business Day, the PIC has so far invested in 16 unlisted projects and its total investment stands at R11-billion. The IDC’s 24 projects are valued at R14-billion and will contribute 1 100MW to the national power grid. ■ 35 EASTERN CAPE BUSINESS 2020

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