Building capacity to help Africa trade better

Green industries – a vehicle for industrial development in South Africa


Green industries – a vehicle for industrial development in South Africa

Willemien Viljoen, tralac Researcher, discusses recent developments in green industries in South Africa

In South Africa’s Industrial Policy Action Plan (IPAP) 2012/2013-2014/2015 green industries are identified as one of the key sectors in which to strengthen industrial policy interventions (the complete document is available here). The focus is mainly on increased manufacturing of components as inputs into the 17.8 Gigawatts renewable energy generation programme, the production of solar water heaters and components and other goods and services arising from the increased demand for energy efficiency in the economy. To achieve these goals the Industrial Development Corporation (IDC) has earmarked R25 billion towards building a green economy over the next five years.

Renewable energy generation is seen as a possible catalyst for increased economic benefits and industrial development by achieving various objectives in South Africa: job creation; improved export competitiveness; assisting South Africa to reach its carbon mitigation commitments; safeguard exports from possible carbon tariffs and taxes and build energy security. Renewable energy plays a vital role in assisting South Africa to reach its commitment to reduce greenhouse gas emissions by 34 percent by 2020 with the potential of creating more than 50000 employment opportunities and generate approximately US$ 55 billion in green investment over the next fifteen years. IPAP recognise the potential for South Africa to become a regional renewables manufacturer and services hub by localising elements of the global value chain for wind and solar power generation. However, this requires an integrated and coherent strategy which combines a renewable energy generation plan with an appropriate financing model and a sound industrial development strategy.

Over the last few years industrial policy interventions have made some progress in contributing to the development of green industries in South Africa.

  • The Renewable Energy Independent Power Producer Programme (REIPP) was launched in August 2011 with the goal of reaching a capacity of 17.8 Gigawatt renewable energy generation by 2030.

  • Increasing levels of local content has been secured in the REIPP.

  • New regulations on the mandatory blending of biofuels have been published in the Government Gazette.

  • In November 2011 the Energy Efficient Building Regulations became effective and the Industrial Energy Efficiency Programme was launched.

  • To date 215000 solar water heaters have been installed.

The following areas are also identified in the IPAP document as areas for further developments in green industries in South Africa:

  • The western and southern coast and inland areas of South Africa is economically viable for wind energy development.

  • Solar power provides and attractive opportunity for further development, especially Concentrated Solar Thermal (CST) power.

  • Energy efficiency can be improved by introducing new electricity savings technology, adjusting existing technologies and conserving energy by reducing the demand for electrical power provided through the electricity grid.

  • Efficient waste management is identified as an important part of a green economy in South Africa, especially industrial development opportunities in recycling, reducing energy usage and reducing air and water pollution.

  • In terms of solar water heaters the goal is to have a total of one million systems installed by 2014.

To further South Africa’s development of and transition to a green economy the IPAP 2012/2013-2014/2015 focuses on improving opportunities in the market for solar water heaters and strengthening South Africa’s capacity in solar and wind power generation. The key action programme regarding solar water heaters are focused on creating a sustainable industry to increase employment and technical skills on installation, maintenance and services to increase energy security, create a domestic market and increase export opportunities in the rest of Africa and other markets for the domestic producers. The main focus of the wind and solar power programme is increasing the local content of renewable energy projects in South Africa and strengthening industrial financing programmes to create a competitive domestic industry.



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