SA businesses miss out in green energy procurement

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br Mike Louw 4317
Mike Louw says Cosatu is worried foreign
jobs are being subsidised. Photo: Jeffrey Abrahams.

Londiwe Buthelezi


Union federation Cosatu has threatened to launch protest action to put pressure on the government to increase local content requirements in the Department of Energy’s Integrated Resource Plan (IRP2).


The labour federation and the Cape Chamber of Commerce and Industry said local businesses involved in the renewable energy sector were in danger of going belly-up because the IRP2 allowed power producers bidding for renewable energy projects to mostly use imported components.


The confederation said three businesses had shut down in the Western Cape and three more faced closure by April this year.


“We are concerned that we have subsidised jobs from other countries because jobs are being imported,” said Mike Louw, the provincial co-ordinator of Cosatu in Western Cape.


He said that the dire conditions were a result of the slow processing of the industry’s suggestions by the departments concerned.


Cosatu wants the current 35 percent local content requirement for projects bidding under the IRP2 to be increased to 50 percent or 65 percent.


“The slow processing of these changes to the IRP2 has an impact on the commitments made at the COP17 (climate change talks). So we want to put pressure on stakeholders. Protests will be called and we are pushing for meetings with all the departments involved,” Louw said.


The executive director of the Cape chamber, Viola Manuel, said the local renewables industry had the capacity to produce at least 70 percent of what was required and only awaited regulation to allow it.


“We also want the definition of local content to be clarified, because currently it includes drilling holes and civil works,” she said.


Louw said if local content requirements were increased, more companies would invest in local manufacturing.


“There is an opportunity to be seized here, but we are concerned at the slow pace that threatens jobs.”


Ajay Lalla, the managing director of Solairedirect Technologies, said the company was in distress and 100 jobs were on the line.


Solairedirect had invested close to R70 million in its facility with financial help from the Industrial Development Corporation (IDC) and a Department of Trade and Industry (dti) grant to prepare for the IRP2. It bid for two 10 megawatt projects in the first window of the renewable energy independent power producer programme last year but was unsuccessful.


Had the projects been approved, Lalla said, the number of people the company employed would have doubled.


“There were only two South African companies (chosen) and only 30MW from South Africa. If local content is increased, suppliers would get better costing and there would be more competence,” he said.


The government’s New Growth Path (NGP) identifies the green economy as one of the six key drivers of growth.


The NGP targets 300 000 additional direct jobs by 2020 to green the economy, with 80 000 of those in manufacturing and the rest in construction, operations and the maintenance of new environmentally friendly infrastructure.


In December last year, the IDC together with the Development Bank of Southern Africa and Trade and Industrial Policy Strategists, launched the Green Jobs Report, which showed the green economy could create more than 460 000 new direct jobs by 2025.


Rentia van Tonder, the head of the IDC’s green industries strategic business unit, said the organisation had set aside R25 billion over the next five years to fund green projects. She said the figure could be increased if more projects qualified for funding.

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