Renewable Energy is key to achieving net zero objectives

A Northern Cape wind project provides a model on how South Africa can implement a sustainable renewable energy programme.

Longyuan South Africa Renewables, a diversified Chinese energy outfit, launched two insightful reports, namely, ‘2023 Sustainability Report’ and ‘Industry Adaptability of Chinese Renewable Energy Enterprises in South Africa’. 

The first report on sustainability was presented by Longyuan South Africa’s Business Development Manager, David Dai. The latter report was put together by the Sino-China Co-operation Think Tank (SAC-TT), comprising academics drawn from the South African Branch of the Institute of African Studies Zhejiang Normal University and the Business School of Nelson Mandela University. 

Held at the Marriot Hotel Crystal Towers in Cape Town, the prestigious event was attended by the company’s top executives, students, academics and other stakeholders involved in the renewable energy sector. 

De Aar Phase I and Phase II 

The ‘Sustainability Report’ highlighted two flagship wind projects that the entity is currently operating in De Aar in the Northern Cape. It also shared its corporate social responsibility initiatives and how its project positively impacts the lives of ordinary people in the region. In 2013 the company won the third round of bidding for the De Aar Phase I and Phase II wind project as part of the government’s Independent Power Producers programme. The two phases comprise a total of 163 white turbines that consistently supply approximately 770 GWh of clean electricity annually to local communities made up of about 300 000 households. 

Investing in local communities 

According to Dai, the phases were successfully connected to the country’s national power grid and also became commercially operational in 2017. The successful completion and operation of the project is heralded as a benchmark for similar future green energy initiatives in the country. He said investing in the well-being of the communities in which their projects are located is central to their company. So far they have invested about R15-million in social welfare annually and these have significantly impacted the lives and livelihood of the locals, Dai added. The two wind projects represent Africa’s first wind power projects that integrate investment, construction, and operation, he said.

Impactful community programmes

To date the company’s social wellness programmes has addressed a number of community needs including the following: 

• Establishing and operating four early childhood development centres for the local community 
• Donated six classrooms with teaching facilities and also enrolled 469 children in need 
• Invested R4. 5 million annually to implement the ‘Scholarship Programme’ 
• Benefited a total of 304 university students through the ‘Study Support: Dream Building – People Nurturing’ initiative.’ 
• Sponsored over 40 men’s total clubs and 13 women’s football clubs 
• Benefitting a total of more than 900 athletes 
• Invested nearly R4-million to purchase a mobile medical bus manned by medical professionals with an investment of R5-million to support its normal operations, and 
• Provided free medical services to over 9 000 community members each year. 

Deepening bilateral relations 

Professor Zhaoyi An, the current leader and founder of SAC-TT, said the research outfit is critical as it serves as a platform that mobilises intellectual resources to address key bilateral challenges and the needs of both countries. It promotes and facilitates person-to-person and business-to-business interactions between South Africa and China, and also drives investment in specific strategic areas. SAC-TT also helps the Chinese business enterprises to adapt and develop better understanding of the country’s regulatory and policy landscape. 

Report’s key findings 

Professor Michelle Mey, Deputy Dean in the Faculty of Business and Economics Sciences at Nelson Mandela University, who is also a member of the SAC-TT, focused on the salient points of the second report. She said in terms of the current status and issues of renewable energy in South Africa, their report revealed that the energy sector contributes 10% to the GDP with only 7% coming from renewable energy. She said the country needs to fast-track the adoption of renewables so that it can reduce its reliance on coal fleet. The current reliance on coal to generate electricity is not sustainable, she pointed out. Regarding the energy reform agenda, Eskom needs to restructure its systems both financially and operationally, said Professor Mey. “It must be more energy-efficient and ensure they address energy inequality in South Africa and on the continent”, she observed. 

Prospects of renewal energy 

Professor Mey said the country has great prospects to develop the renewable energy sector, adding at the moment there are two successful wind farms in the country. One of these is the Umoya Energy Wind Farms which provides cleaner energy to 49 000 households in the Saldanha Bay Municipality in the Western Cape. But Professor Mey also highlighted some challenges that the country has to navigate before it can fully implement the renewable energy project in South Africa. In the first instance, Eskom needs to modernise its old infrastructure, which she said will cost $98- billion over the next five years. Another serious challenge relates to the current skills shortage in the energy space. She said the country needs people with relevant and specialised skills in installation, operation and planning of the power, and expertise required for the Battery Energy Storage System (BESS) project. 

Comparing standards between South Africa and China

In terms of the comparison of standards between South Africa and China, the research indicated that the latter has faster project approvals and more efficient implementation. According to Professor Mey, South Africa has a complex regulatory environment, which often delays projects, adding that even though the country has high performance and safety standards, it lags behind China’s innovation and efficiency. Furthermore, China has very strong government support for renewable energy while South Africa has just recently started. 

Adapting to local labour regulations 

The report also stressed the significance of Chinese companies adapting and understanding to the South African organisational culture and its labour laws. For example, South Africa has well-developed labour relations laws which protect workers against unfair labour practices. She said they advise Chinese employers to study and familiarise themselves with some of key labour legislations and regulations such as the Labour Relations Act and the Commission for Conciliation, Mediation and Arbitration (CCMA).