Statement by the Mayoral Committee Member for Economic Opportunities and Asset Management, Alderman James Vos

With another round of ‘unplanned’ load shedding, it is the single most urgent crisis faced by our country and the City.

As we all know, load shedding comes at a huge cost to businesses, many of whom are forced to divert finances from other necessities, such as hiring more staff, towards buying equipment that will keep the lights on and machines running. A recent study commissioned by Eskom found that a day of Stage 1 load shedding cost the economy R235,5 million. That is a loss that the South African economy simply cannot afford!

It has never been clearer that we need to remove municipalities from the clutches of this unreliable energy supplier.

With the amendments to the Electricity Regulation Act, which enables municipalities to procure electricity directly from independent private producers, these amendments have opened the door for well-run municipalities to work with the private sector to end load shedding by reducing our dependence on Eskom.

Yesterday, I visited the hub of green energy manufacturing, engaging with a  sample of companies located within Cape Town who manufacture key components necessary to expand our capacity to harvest wind for energy generation purposes, could not have been more on point.

One such concern manufactures concrete pipes, culverts and retaining walls and are fully geared to handle special products too. One such special product, are wind turbine tower segments.

The Company manufactures these segments for various original equipment manufacturers (OEMs), providing their technology to the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The second concern, located in Atlantis SEZ, is the only steel tower manufacturer operating in South Africa. They too, supply towers to various OEMs partaking on the REIPPPP.

Regrettably, despite the enthusiasm and ongoing willingness of these manufacturers to contribute, not only to the physical component manufacture, but research and development, skills training and job creation they report that they are facing immense challenges. More worryingly, in both the above cases, the entities are currently not manufacturing wind towers for the REIPPPP, placing their businesses under increasing pressure.  The result of this means 500 jobs are at risk!

I have urgently reached out to the Minister of Trade, Industry and Competition, Mr Ebrahim Patel and prevailed upon him to assist.

We have appealed to the DTIC to make sure that the National Local Content Policy is enforced and deviations from this policy are limited, especially when local manufacturing capacity exists. In addition, the local content policy should persist and amendments thereto should happen less frequently. This will demonstrate consistency and allow foreign investors to view our market more favourably from a manufacturing investment decision-making point of view.

Furthermore, by enforcing this policy we will demonstrate to foreign investors that we are serious about manufacturing locally and welcome their manufacturing investments, which contribute to economic development and job creation in the sector.

Additionally, to fast track and build investor confidence, we need to continue to secure renewable power onto the grid consistently and systematically, to ultimately reduce load shedding over time and contribute to economic development.

The fundamental step is to execute consistent rounds of procurements aligned to the National Government’s Integrated Resource Plan 2019, which pledges for wind, “the country will procure, consistently, 1600MW of wind generation capacity every year from 2022 to 2030”.

The visit also coincided with a briefing from the ASEZ Company who similarly report that they are receiving positive enquires from investors in green tech and manufacturing, but the slow pace of the DTIC navigating the Special Economic Zone company trading requirements and in turn, releasing incentives is a major cause for concern.

Together with organisations such as the Atlantis Special Economic Zone and our Special Business Partner, GreenCape, the City is determined to ramp up its energy innovation and supply, particularly with green power solutions.

In addition to being a source of jobs and economic growth, with some of the most sustained sunlight in the world and ideal wind power potential, renewable energy is the solution to South Africa’s incessant power woes, not to mention being vital to reducing our carbon footprint.

We simply cannot let red tape and policy enforcement, or rather, the lack thereof, stand in our way. We need to develop reliable energy sources, build future capacity, create jobs and reap the benefit that nature has bestowed on our country.

Source: City Of Cape Town