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Address by the Premier of the Northern Cape, Ms Sylvia Lucas, at the Northern Cape Renewable Energy Conference
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Programme Director
Members of the Executive Council
Members of the Provincial Legislature
Councillor from the !Karas Region, Mr Jan Boois
Executive Mayors, Mayors and Councillors
Senior Government officials
Partners in the Energy Sector
Members from the Academia
NGO SECTOR
Labour federations
Members of the Media
Distinguished guests
Ladies and gentlemen
Renewable energy is the future and this gathering bears testimony to that and thus we are here to get a glimpse into the countless possibilities that renewable energy holds for this Province and its people. Over the next two days, we will be deliberating on pertinent issues regarding the repositioning of the Northern Cape Province to support the Renewable Energy Sector. Not only do we wish to support this sector but we are here to tap into and draw benefit from the endless opportunities that the renewable energy sector holds for the economic development of this Province.
The people of the Northern Cape, from a variety of sectors such as government, the private sector, NGO’s and labour sectors are in agreement about the need for an inclusive energy sector and for a partnership to deal with the triple challenge of unemployment, poverty and inequality whilst accelerating rapid economic transformation in the Province.
Ladies and gentlemen
The Province is currently developing a Provincial Growth and Development Plan (PGDP - Vision 2040) and reviewing the Provincial Spatial Development Framework (PSDF), which will plot the path to changing the energy landscape of the Northern Cape. The PGDP – Vision 2040 and the PSDF will also provide a developmental agenda based on four paths of prosperity, namely economic, social, environmental and governance. These paths are founded within an ethos of sustainable development.
A social pact is therefore required to create a prosperous energy sector in the Province through a negotiated resolution where the private sector commits to investing in new areas; where labour and business work together with government to address the inhibiting factors and identifying opportunities; and developing partnerships with civil society to ensure that our people benefit from the natural resources of our beautiful Province.
Four accords, emanating from the New Growth Path (NGP) have already been signed on basic education, skills development, local procurement and the green economy which can serve as a guide in creating a Provincial Green Economy Accord, which would encompass the proposed initiatives of an Energy Transformation Charter.
There are three main elements I would like to highlight today, namely sustainable development, economic transformation and green governance.
Sustainable Development
Globally, climate change poses new challenges for developing countries with respect to growth and poverty reduction. Future growth will need to be more carbon-efficient and environmentally sustainable. Greater global understanding on the relationship between growth, environmental change and poverty reduction would support the achievement of the Sustainable Development Goals and help developing countries in achieving sustainable growth.
The UN General Assembly has designated the years 2014 to 2024 as the International Decade of Sustainable Energy for All. In this regard the UN identifies the Sustainable Energy for All initiative as a multi-stakeholder partnership between governments, the private sector, and civil society. It has three interlinked objectives to be achieved by 2030, namely:
- Ensure universal access to modern energy services;
- Double the global rate of improvement in energy efficiency; and
- Double the share of renewable energy in the global energy mix.
Ladies and gentlemen
Africa’s Agenda 2063 is aligned to the global energy and sustainable developmental agendas which states that “…ensuring access to clean and affordable energy is a development imperative”. The current energy demand within the African continent is undeniable with more the 645 million Africans not having access to energy.
The renewable energy programme is therefore confirming South Africa’s commitment, together with 195 other countries around the world, to the Paris Agreement for the reduction of Carbon dioxide emissions worldwide. It also makes us part of the ever and fast changing global world of a renewable energy industry. The Province needs to invest in the climate change mitigation and water-smart programmes. The additional 27 renewable energy projects, announced in April 2018, are expected to offset 8.1 million tonnes of CO2 per annum. The devastating impact of the current drought, specifically in the Northern Cape Province, over the last few years have highlighted the impact of climate change and water security amongst other things. It should be noted that energy is one of the biggest consumers of water. Our people deserve access to clean affordable electricity which would not have a negative impact on the environment and their health.
Renewable energy is an energy form that is a ‘flux’ in the form of solar radiation which is un-stored. In order to make use of this form of energy it must be caught as it passes and is captured, say, in the form of biofuels, wind, photovoltaic and hydro. Un-caught renewable energy passes into the void forever lost to anthropogenic use. There are tremendous opportunities for the Northern Cape within the energy sector where there is immense potential both in terms of supply and demand for solar, hydropower generation, and biomass.
Ladies and gentlemen
The global debate on alternative energy resources gained in prominence, coincidently at the same time as the global shock over an unprecedented oil price rise causing a growing international financial crisis. As a consequence, a sense of urgency is the growing debate, not just in South Africa, on the future of the energy sector, the potential of renewables, especially highly controversial biofuels and the implementation and adequacy of climate change accords.
South Africa is therefore required to adapt to challenges of climate change, however the challenge is to transform these threats into opportunities for economic development, job creation and environmental justice in our path to a developmental state. This requires strong leadership and bold and decisive decision-making now so that we can simultaneously circumvent the risks and grasp the opportunities of this global transition to a post-carbon world.
What is clear is that we need to change the energy landscape in our Province to provide for both economic transformation and an environmentally just society.
Energy Transformation Charter
The country’s developmental reform has come a long way since the dawn of democracy, the most notable aspect of which is the introduction of green economy principles into the developmental trajectory. Support from the global community in general, and the United Nations (UN) in particular, significantly contributed to this evolution. In mid-2014, the United Nations Development Programme (UNDP) joined the UN-led global initiative on Partnership for Action on the Green Economy (PAGE) that was taken up in South Africa in March 2015. It involves the cooperation of five UN Agencies and spheres of national government. The country has sought to promote a diverse and equitable economy, in line with UN’s green economy definition of: “An economy that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities” (UNEP, 2011).
The green economy is: low carbon, resource efficient and socially inclusive. These green economy principles encapsulate the notion of sustainable development, which seeks to balance economic, social and environmental imperatives.
As a Province we therefore support the Minister of Energy’s initiative to transform the energy sector through a transformation charter or accord. The youth, women and the disabled need to be empowered to participate in the green economy.
On the 2nd of April this year, we witnessed the signing of the agreements for the 27 projects procured under the Renewable Energy Independent Power Producer Procurement Programme Bid Windows 3.5 and 4. This procurement represents a total of R56 billion of investment and about 2300 Megawatts (MW) of generation capacity to be added to the grid over the next 5 years. The Province is the recipient of the majority of these projects which includes investment in 15 new wind, solar PV and CSP projects in the Province. With the procurement of the 27 projects, 58 000 new jobs will be created for South African citizens, and mostly for the youth. The jobs will be available across the entire value chain with an additional 1 500 jobs possible in the manufacturing sector. The manufacturing sector, as promoted by the NDP is both good for jobs and good for economic growth. The localisation potential of these 27 new projects is substantial. Our estimate is that for the solar PV projects, around 2.8 million solar PV modules would be procured, 600 inverters and 385 transformers. In addition for the onshore wind projects, roughly 500 wind towers and turbines would be required.
These 27 projects will also deliver substantial benefits, with regard to meaningful black ownership and participation at all the levels of the projects as well as other priority areas of economic transformation. In Bid Windows 3.5 and 4, South Africans own the majority share of 57.8% (R11.90 billion) in the project companies. Of the 57.8% South African shareholding, an average of 64.2% (R7.64 billion) is held by black shareholders. The balance of the shareholding is mostly with institutional investors such as PIC and Old Mutual as well as state owned companies. Ownership without getting the necessary opportunity to develop skills and participate in the projects is of no value. We would like to see South African black Independent Power Producers very soon bidding in other countries, leading the teams developing these projects. The programme committed to employ 86% of black South Africans in top management positions. Furthermore, as part of the obligations, the Bid Window 3.5 and 4 projects have made commitments in five categories, namely education and skills development, social welfare, healthcare, general administration and enterprise development. The majority of socio-economic development monies will be spent in local communities and involve youth and women-owned small businesses.
We welcome our Energy Minister, Jeff Radebe’s, inclusive geographic approach to transforming the energy sector and the announcement that local community shareholding in the newly signed projects amounts to 7.1% or R1,63 billion. The local community shareholders in these projects would thus receive R5,9 billion net income over the next 20 years – that is during the projects lifespan. Our communities should also benefit from the IPPs contribution of R9,8 billion to socio-economic development initiatives and R3,39 billion to enterprise development over the next 20 years.
We need to focus our discussions here today on additional interventions that we can recommend to optimise black ownership and ensure active participation in the energy sector. The youth, women and the physically challenged should be prioritised in this regard. We need to find innovative and affordable funding mechanisms to facilitate the participation of black SMMEs and black industrialists in the energy sector. This includes the drafting of a funding model to benefit the Historically Disadvantaged groups within the energy space. We also need to acknowledge initiatives that have been taken to involve the communities in the energy sector.
Let me site a few examples:
The Green Economy deals with the important issue of greening a country’s economy and provides guidance and support to SMME’s that wish to create ‘green jobs’ and switch to ‘green technologies’. Key areas of priority include BBBEE participation, job opportunities, skills development, and training, technological transfer, development of new manufacturing plants and facilities and sourcing locally manufactured components. The Integrated Energy Centre (IEC) Programme has delivered a total of seven IECs located in the rural parts of South Africa, that include John Taolo Gaetsewe District and further collaboration is ongoing to establish more. An Integrated Energy Centre (IEC) is a one-stop energy shop owned and operated by the community Cooperative and organised as a community project. It provides energy solutions to communities, access to affordable safe and sustainable energy services, information and awareness on how to handle and utilise energy sources including Paraffin and LPGas. In addition the IEC’s promote the development of SMME’s through partnerships.
Another example of the benefits of technological innovation for community development in the Northern Cape is the project of Professor Ernst Uken and his team from the Cape Technikon who have developed a world first: a battery-less solar-powered sewing machine. Fifteen of the photon-powered machines are in place at the remote community of Kliprand in the Northern Cape, where local women are producing overalls for the farming community. Driven by solar panels, the machines are conventional electric models converted to use 12V DC by replacing the ordinary motor with a car windscreen wiper motor.
My plea to you, the delegates of this conference, is to find innovative ways of contributing to the energy transformation agenda in the Province.
Green Governance
We have seen a change in policy directives, which initially mainly focused on aspects such as advocating for intensified energy efficiency in industry, mining and the commercial sector. The shift in focus now also focuses on the role of renewable energy, especially solar energy, to non-grid, and rural electrification applications. Another milestone in this transition was the adoption of the Green Economy Accord, a wide-ranging commitment by organized labour, private sector, and civil society to promote the green economy as an economic driver.
South Africa views a green economy as a sustainable de-velopment path based on addressing the interdependence between economic growth, social protection and natural ecosystem. The green economy is a driving force of the wave of industrialization and is a key job driver identified in the New Growth Path. The Green Economy Accord sets ambitious targets for local procurement in the manufacturing and assembly, construction and installation of renewable energy plants and equipment, including solar panels, trackers, mirrors, metal frames, glass, wind turbine blades, towers, turbines and turbine components, electricity inverters and electricity co-generation through the use of by-product industrial heat.
You will also recall that the Green Economy Accord seeks to:
- Create 300 000 jobs in the clean energy sector and its associated value chain;
- Ensure 75% local content;
- Ensure that the State, through its entities invest R22 billion in green projects with commitment of R3 billion towards local manufacturing; and
- Create 50 000 jobs in the renewable energy sector; just to name a few targets.
- The Green Economy refers to two inter-linked developmental outcomes for the South African economy:
- Growing economic activity (which leads to investment, jobs and competitiveness) in the green industry sector;
- A shift in the economy as a whole towards cleaner indus¬tries and sectors with a low environmental impact com¬pared to its socio-economic impact.
These two outcomes are inter-linked because the one supports or enables the other. They are also linked to areas of rural development (since most natural resources are found in ru¬ral areas), service delivery (including access to energy, water and sanitation) and security (food and energy).
Numerous government documents, including the NGP and the National Development Plan (NDP), have pointed to the consideration that an ambitious programme of renewable energy generation should serve to catalyze a significant wave of economic benefits and industrial development. The NDP, proposes diversity and alternative energy resources and energy supply options.
The NDP identifies the country’s climate policy as the cornerstone for low carbon transition, and rightly so, for at least two reasons. First, the country has committed to reduce its carbon emissions below a set baseline of 34% by 2020 and 42% by 2025 based on the Intended National Determined Contribution (INDC). Second, the proposed measures to adapt to and mitigate against climate change are inherently resource efficient, low carbon and lead to economic resilience.
After several attempts to develop an appropriate renewable energy procurement framework, an intra-governmental collaboration spearheaded by the Department of Energy (DoE) – via its Independent Power Producer (IPP) Office, executed the highly lauded, Renewable Energy Independent Power Producer Programme (REIPPPP).
As required of a new development, the this programme reflects the country’s current developmental agenda – socio-economic development, support for black, youth, women and disabled-owned enterprises, job creation, attraction of foreign direct investment, stimulation of manufacturing activity, reduction of carbon emissions and diversification of the country’s energy mix for sustainability and energy security. The REIPPPP’s alignment with developmental policies and coordinated implementation of policies and frameworks such as the Industrial Policy Action Plan (IPAP) and the Green Economy Accord has ensured this alignment.
The Integrated Resource Plan (IRP) 2 targets for renewable energy open up major new opportunities for investment and employment in manufacturing new energy technologies as well as in construction (NGP, 2011:31). South Africa has committed to reducing emissions by 34% by 2020 and 42% by 2025, subject to adequate financial and technical support. The IRP 2010 of the Department of Energy proposed a reduction in the contribution of coal to total generation capacity from 83% in 2010 to 48% by 2030.
The power to make determinations for new energy sources and generation capacity is vested in the Minister of Energy as per the Electricity Generation Act, section 34. These pronouncements are to be guided by the IRP and the Integrated Energy Plan 7 that are products of extensive modelling exercises and industry and public stakeholder consultations, and the country’s current economic climate.
Provincial Green Governance Interventions
As the above mentioned is regarded as an intergovernmental collaboration I would like to recommend the development of an Implementation Protocol to be drafted and ratified as one of the key outcomes of this conference. This will assist with the energy governance in the Province. Key to the Minister’s powers taking effect, is the collaboration between government, private sector and civil society.
In terms of energy governance in the Province I would like to, on behalf of the Provincial Government, pledge our commitment to the following:
- Engage national and local government in the drafting and ratifying of an energy implementation protocol which will clearly outline the respective roles and responsibilities. This will include the empowerment of SMMEs in the Province within the energy sector.
- That the Office of the Premier will prioritize the sector and be the first point of entry in terms of the energy sector.
- The Establishment of a consultative body between National, Province and local municipalities.
- A renewable energy unit will be established in the Province.
- Through the finalization of the HRD Strategy, coordinated by the HRD Council skills development for the energy sector will be prioritized. This would include engineers, technicians (wind, solar, transmission network), technologists, technicians and artisans, and solar water heater installers.
- Designing a new model for Renewable Energy Community Trusts.
Finally, ladies and gentlemen, I wish you well in your further deliberations and we will look forward to the resolutions of this Conference, which will contribute to our government legislative framework and the effective implementation of our renewable energy policies.
I thank you
Programme Director
Programme Director