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Western Cape Business 2019 edition

  • Text
  • Africa
  • Manufacturing
  • Trade
  • Winelands
  • Africa
  • Harbours
  • Ports
  • Greentech
  • Maritime
  • Biomass
  • Export
  • Generation
  • Energy
  • Investment
  • Business
  • Town
  • Cape
  • Tourism
  • Economic
  • Electrical
A unique guide to business, investment and tourism in the Western Cape. The 2019 edition of Western Cape Business is the 12th issue of this highly successful publication that, since its launch in 2005, has established itself as the premier business and investment guide for the Western Cape Province. The Western Cape has varied investment and business opportunities. In addition to the regular articles providing insight into each of the key economic sectors of the province, there are special features in this journal on the big impact which the relatively new maritime sector is having, together with tourism and events and renewable energy. The potential for independent generation is an exciting new avenue for local authorities. Western Cape Business contains interviews and messages from business leaders from Accelerate Cape Town, the Cape Chamber of Commerce and the Western Cape Business Opportunities Forum. Tim Harris, the CEO of Wesgro, outlines the successful investment attraction strategies that his organisation has been adopting. To complement the extensive local, national and international distribution of the print edition, the full content can also be viewed online at www.westerncapebusiness.co.za. Updated information on the Western Cape is also available through our monthly e-newsletter, which you can subscribe to at https://www.globalafricanetwork.com/subscribe/, in addition to our complementary business-to-business titles that cover all nine provinces as well as our flagship South African Business title.

SPECIAL FEATURE Powering

SPECIAL FEATURE Powering the province The Western Cape is moving away from fossil fuels. The City of Cape Town has set a target of generating 20% of its electricity from renewable energy and it is going to court to try to make sure that this happens. The first medium-term budget policy statement of new Finance Minister Tito Mboweni in October 2018 was mostly designed to calm the markets after a tumultuous time in the political sphere. As a well-respected former Reserve Bank governor, Mboweni was almost universally welcomed as a steady hand on the country’s finances. What he said about electricity was significant. Mboweni said, “Restructuring of the electricity sector is underway. This must include a long-term plan to restructure Eskom and deal with its debt obligations.” Mboweni’s predecessor, Nhlanhla Nene, had previously said that the restructuring of Eskom was “top of the agenda”. Eskom runs electricity generation, transmission and distribution and it is a monopoly. Mboweni’s statement opens up the possibility that a longstalled plan to divide up these functions could eventually take place. In 2013 a parliamentary bill called the Independent System and Market Operator (ISMO) was passed but allowed to lapse in the same year. Unreliable and expensive power is a massive constraint on business, and provincial and city governments in the Western Cape are champing at the bit to be allowed more freedom to participate in the sector. When South Africa ran out of power in 2008, a programme to get private investors to build renewable energy capacity was introduced, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Between November 2011 and July 2016, South Africa received commitments of investments to the value of nearly R200-billion through this programme. It had by May 2016 delivered the promise of 6 377 megawatts (MW) with an investment value of R250-billion and many of the projects are already delivering electricity to South Africa’s grid. Figures released by the South African Wind Energy Association (SAWEA) showed shareholding WESTERN CAPE BUSINESS 2019 54

SPECIAL FEATURE for local communities reached an estimated net income of R29.2-billion over the lifespan of the projects. But at that point, Eskom said that it would not buy power from independent producers. Only when President Zuma was replaced by President Ramaphosa did the programme get back on track. In April 2018, newly appointed Energy Minister Jeff Rabebe restarted the REIPPPP when he signed off on projects totalling R56-billion that will add 2 300MW to the national grid. Most of South Africa’s electricity comes from coal and Eskom is building two huge coal-fired power stations. Shortly thereafter, a new Integrated Resources Plan was released. This was a major event because the first Integrated Resource Plan (IRP) was printed in 2010 and was supposed to be updated regularly to guide the nation’s approach to electricity. Instead, the release of updated IRPs was delayed to the detriment of proper planning. In that uncertain environment, there was a strong push for expensive nuclear options. The release of IRP 2018 brings certainty to the market. Nuclear will not be considered again until at least 2030. The South Africa Photovoltaic Industry Association (SAPVIA) welcomed what it calls the “rational” draft plan. Provincial and city plans The potential of renewable energy is being realised and there is a strong lobby to build a gas-to-energy plant in the province. In September 2018 the City of Cape Town launched a resilience assessment, the first step in a larger process. The Rockefeller Foundation chose the city in 2016 as one of 100 around the world in which programmes would be tested to improve the ability of the city to withstand shocks such as severe droughts. The city wants to expand the lessons it learnt in the period of water shortage into other areas such as energy generation and energy efficiency. Former MP Gareth Morgan is Cape Town’s Director of Resilience. The Western Cape Provincial Government is also investing in resilience. A market intelligence report covering energy, renewable energy, water and waste was created by GreenCape to map the assets and challenges in these areas. In addition to trying to attract green investment into the province, the province is working for improved regulations related to small-scale embedded generation (SSEG). The idea of home-owners being able to sell surplus electricity from rooftop solar systems had been restricted to the Cape metropolitan area until 2015. The application of the provincial government’s Energy Security Game Changer has expanded (via bylaws) to the whole province. There are 19 municipalities where rooftop solar PVs are connected to the electricity grid, 13 of which have nationally approved tariffs in place. Users in the 13 areas can be paid for the power they supply, provided the facility has a capacity of 1MW or less. A total of 47MW in rooftop solar PV is currently installed in the province. Two further processes are underway. The City of Cape Town would like to buy electricity from independent producers as part of the REIPPPP process. At the moment, the sole buyer is Eskom. The city hopes that its court case to establish or deny this right will be heard early in 2019. Finally, the City of Cape Town wants to be able to rent out its infrastructure to a power producer who can supply a user via that infrastructure. This is known as “wheeling”. A start was made with the Darling wind farm, but more work needs to be done on the legislative framework. Much of this work is being done by a unit called the 55 WESTERN CAPE BUSINESS 2019

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