A leading wind turbine original equipment manufacturer (OEM) believes that the local content in South African wind farms could rise to as high as 65% in the short term should the country demonstrate its commitment to a consistent yearly deployment of 1.6 GW. At present, local content on South African wind projects ranges from between 40% and 50%.
Siemens Gamesa South Africa MD Janek Winand, who also serves as chairperson of the South African Wind Energy Association’s manufacturers and local content working group, tells Engineering News Online that the company sees potential to manufacture components domestically to serve the local market, as well as projects that are expected to emerge in the rest of the region.
Siemens Gamesa South Africa will have 372 wind turbines, with a combined capacity of 850 MW, installed in South Africa by the end of 2020, representing a market share of about 28%.
“Industrialisation is more than possible so long as there is a stable outlook and a consistent pipeline and South Africa does not return to a situation of stop-start procurement,” Winand states.
Several manufacturing investments were made after South Africa first initiated its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which has resulted in more than R200-billion-worth of investments by independent power producers, in 2011.
Between 2015 and 2018, however, no new renewables investments were made after Eskom refused to sign power purchase agreements (PPAs) for renewables projects procured under REIPPPP Bid Window 4. As a result, some domestic manufacturing capacity was lost, with the highest-profile casualty being DCD Wind Towers, which was liquidated in 2016.
Government eventually signed the Bid Window 4 PPAs in 2018, which has resulted in a resumption of activity and there is growing optimism that the Southern African market could add about 18 GW of new capacity by 2030, owing to the imminent finalisation of South Africa’s Integrated Resource Plan and increasing appetite for wind projects in the region more generally.
Should this translate into reliable yearly demand of 1.6 GW, Winand is confident that OEMs and first-tier component suppliers will establish domestic manufacturing capacity.
“In fact, 1.6 GW a year is an industrialisation sweet spot.”
He sees immediate potential in the areas of steel and concrete towers and tower internals and is optimistic that, in time, South Africa will also begin to manufacture blades and assemble nacelles, which contain the wind turbine’s low- and high-speed shafts, the gearbox, the brake and the generator.
“The production of blades is particularly labour intensive and should be a priority focus for South Africa.”
Over time, three or four OEMs are likely to establish productive capacity to meet regional demand, as well as the higher local-content thresholds that are likely to be embedded in future REIPPPP bidding rounds.
Reaching even higher levels of local content is also possible, but would add to the cost of wind projects and would, thus, require government to make a policy adjustment that deviates from a least-cost outcome.
Winand is also confident that future wind projects will continue to improve its cost competitiveness, owing to ongoing technological advancements that are increasing the nameplate capacity of each individual turbine. South African wind tariffs have decreased by 59% since 2011.
Most turbines installed in South Africa to date have a rated capacity of between 2.4 MW and 3.4 MW apiece. From Bid Window 5, however, the individual turbines introduced will have capacities of between 4.2 MW and 6.6 MW, owing to the increased in rotor diameters in recent years from less than 130 m to anywhere between 150 m and 170 m.
“Tower heights will also increase, but not as dramatically as in other countries, as South Africa’s wind shear is not typically interrupted at lower heights by natural features such as forests.”
Winand says that, despite recent market challenges, South Africa remains a leading renewable energy market in Africa and Siemens Gamesa is ready and willing to invest to support further growth and sustain its own market-leading position.