Green Business Journal Issue 10

ISSN 2225-5974 Jan/Feb 2014

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9 772225 597009

MERVYN KING

USHERING IN THE NEW INTERNATIONAL <IR> FRAMEWORK R29, - (VAT INCL) ISSN 2225-5974

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WISE WATER USE IN AGRICULTURE PART II

COLLABORATION

THE KEY TO SUPPLY CHAIN SUSTAINABILITY

MANUFACTURING THE REBIRTH OF SOUTH AFRICA’S TEXTILE INDUSTRY

BEYOND RECYCLING

BlackAfrica Group _ 2541

Let’s not waste our earth’s scarce resources.

When you recycle with Mpact Recycling, your waste paper is used to make paper and other products, saving many of these resources and contributing to a sustainable future not only for you but for the next generation. Not only is Mpact Recycling the largest collector of paper for recycling in South Africa, Mpact is the largest producer of paper made from recycled materials in the country. Mpact is involved in the entire process from collecting discarded paper all the way through to making the paper from it and converting it into boxes. What’s more, by recycling, you are helping to employ over 30,000 people involved in the industry. Having empowered over 170 small businesses to facilitate their own recycling collections, Mpact is also actively leading change in the industry through smarter, sustainable thinking.

EDITORIAL

MANAGING EDITOR:

EDITORIAL AND PRODUCTION:

MARKETING AND EDUCATION:

ADMIN MANAGER:

LAYOUT AND DESIGN:

DIRECTORS:

Lloyd Macfarlane Megan Sell Cara-Dee Carlstein Suraya Manuel Travis Arendse Lloyd Macfarlane Gordon Brown Andrew Fehrsen

DIVISIONAL SALES MANAGER: Annie Pieters

PRODUCTION: Wadoeda Adams

SALES EXECUTIVES:

PRINTING:

Lupumlo Nika Elna Willemse Sindile Mavundla Creda Communications (Pty) Ltd

PUBLISHER: Alive2green

PHYSICAL ADDRESS: Cape Media House 28 Main Road Ronderbosch 7700 Cape Towm

TEL: 021 447 4733

FAX: 086 694 7443

Websites: www.alive2green.com

DISTRIBUTION AND COPY SALES ENQUIRIES: distribution@alive2green.com

INTERNATIONAL FRANCHISE ENQUIRIES: info@alive2green.com

ADVERTISING ENQUIRIES: sales2@alive2green.com

EDITORIAL PROPOSALS: lloyd@gsacampbell.com

Company Registration Number: 2006/206388/23 Vat Number: 4130252432 ISSN No.: 2225-5974 Issue 7 Published: June 2013

Prof. Mervyn King

All Rights Reserved. No part of this publication may be reproduced or transmitted in any way or in any form without the prior written permission of the Publisher. The opinions expressed herein are not necessarily those of the Publisher or the Editor. All editorial and advertising contributions are accepted on the understanding that the contributor either owns or has obtained all necessary copyrights and permissions. The Publisher does not endorse any claims made in the publication by or on behalf of any organisations or products. Please address any concerns in this regard to the Editor.

The Green Business Journal is printed on Hi-Q Titan plus paper, manufactured by Evergreen Hansol a leading afforestation member acknowledged by FOA. Hi-Q has Chain of Custody certification, is totally chlorine free, and is PEFC, ISO 14001, ISO 9001 accredited.

It’s been two days since Nelson Mandela passed away and content across almost every media platform is dedicated to his life and death. Tributes continue to pour in from thousands, including from world leaders and personalities, all of whom are mourning the loss of this great leader but also celebrating the significance of his contribution to humanity.

I had other intentions for this column, but given the force that surrounds the events of this week I find it difficult to manufacture any kind of importance from any other topic. And so without fighting this force I have directed my thoughts, and this column, towards this great man’s interest in and influence of sustainable development in South Africa. Nelson Mandela was a humanitarian. He placed huge importance on a society that is driven by equity and human development. He was a champion of human rights and global stewardship, and a recent tribute from UNEP reminds us that after his release in 1990 he continued crusading against poverty, inequality and racism, and speaking widely about every aspect of sustainable development. This included advocating “work, bread, water and salt for all” and the need for equal distribution of resources in his homeland.“No Water, No Future”, was the title of a keynote speech that Mandela delivered during the 2002 World summit for Sustainable Development held in Johannesburg. The speech served to open international dialogue about water issues, projects and solutions around the world and he became known as an advocate for access to potable water and water sustainability.

Mandela often encouraged business and society to embrace the spirit of Ubuntu (humaneness) and on his 89th birthday he gathered together a group of respected leaders who would go on to tackle various issues including social degradation and climate change. This group he called ‘The Elders’.

Mandela International Day is a call to action for people to take responsibility for making the world a better place, one step at a time. Participants spend 67 minutes of their time on a social or environmental project that gives back.

Sustainable development requires a balance of focus on economic, social and environmental issues and Mandela understood the role that business must play in a sustainable South Africa. Mandela told Parliament in 1996 that government was key to creating the socioeconomic development the country needed and whilst he had initially supported the ANC’s polices of nationalisation of large economic assets, he was responsible for removing these policies after a private meeting with Chinese Premier Li Peng during the World Economic Forum in Davos. Nelson Mandela’s legacy will live on and will hopefully influence the way that we live our lives. Perhaps if we, like him, place importance on humility, forgiveness, reconciliation and equality, we might just get a glimpse of the world as he saw it.

“A fundamental concern for others in our individual and community lives would go a long way in making the world the better place we so passionately dreamt of.” Nelson Rolihlahla Mandela 1918-2013 Sincerely, Lloyd

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Cover personality description: Prof. Mervyn King Our cover personality this issue is Professor Mervyn King - a former judge of the Supreme Court of South Africa, and currently the chairman of the Integrated Reporting Council of South Africa and Deputy President of the Institute of Directors in South Africa.

He is best known for chairing the King Committee on Corporate Governance, which issued three comprehensive reports in 1994, 2002 and 2009 endorsing an integrated and inclusive approach to corporate governance in South Africa.

Importantly, Professor King is also the Chairman of the International Integrated Reporting Council, which began a Pilot Programme in 2011 in order to underpin the development of the International Integrated Reporting Framework (IIRF).

The IIRC was created with the remit of developing the globally accepted International <IR> Framework that elicits from organizations material information about their strategy, governance, performance and prospects in a clear, concise and comparable format.

The Framework will underpin and accelerate the evolution of corporate reporting, reflecting developments in financial, governance, management commentary and sustainability reporting.

The benefits of the Framework are purported to be the enabling of informed decision-making that leads to efficient capital allocation and the creation and preservation of value.

The Framework is ultimately intended as guidance for all businesses producing integrated reports.

On 16 April 2013 the IIRC released the Consultation Draft of the International <IR> Framework. The launch was followed by a 90 day consultation period giving all stakeholders an opportunity to respond with comments and feedback to help shape the development of the Framework.

The International <IR> Framework was released on 9 December 2013.

08 15 18

News and updates

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Sustainable supply chain management

31 38

Column

Water use in agriculture Food - Water - Life

CONTENTS

COVER PERSONALITY

Textile and allied industries SAâ&#x20AC;&#x2122;s textile and allied sectors set to adapt

An update on the REIPP

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NEWS & UPDATES Bridgestone unveils Ecopia EP200 The new tyre showed 4.3% saving in fuel consumption in recent tests. The new technology behind the better performance is Bridgestone’s proprietary Nano ProTech technology that increases the density of silica molecules in the tyre’s compound. Nano ProTech reduces heat generation and energy losses while driving and gives lower rolling resistance.

Other design features are high-stiffness shoulder tread blocks with a square profile instead of the rounder profile of conventional tyres. This improves directional stability while reducing rolling resistance and provides greater resistance against irregular wear. The centre tread blocks are moulded in the shape of a reversed Z, providing more stable road contact. The blocks include a high angle lug groove that enhances wet weather road holding. The reversed Z design has allowed Bridgestone’s designers to widen the three straight grooves in the tread, significantly reducing the risk of aquaplaning when driving on wet roads.

It all adds up to better fuel consumption and therefore lower emissions without compromising on driving comfort, tread wear or road holding.

New IR Framework Launched On Thursday, 5 December 2013, the members of the International Integrated Reporting Council (IIRC) met in London to approve the Council’s new Integrated Reporting (IR) Framework. Central to the IIRC’s work has been its Pilot Programme (launched in 2011) which now includes 140 businesses and institutional investors – all of which have been central to the development of the new Framework.

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RustMo 1 Comes On-stream The RustMo 1 PV plant in the North-West province began commercial operation Tuesday, 19 November 2013. The facility has an installed capacity of 7 MW and is capable of generating over 12.5 million kWh of clean solar power annually. RustMo 1 is one of four solar projects in German-based energy company, Juwi’s, SA solar portfolio.

Source: www.pv-magazine.com

NEWS & UPDATES

R670 billion Water-scarce South Africa requires R670 billion for its water sector to keep up with growing demand.

Source: www.engineeringnews.co.za

Eco-Logic Recycling Award Winners Congratulations to greenABLE and greenOFFICE – joint winners of the 2013 EcoLogic Recycling Award. Hosted by The Enviropaedia in association with SABC3, these awards recognise individuals, organisations, products and services that make a measurable difference in creating a more sustainable world. greenABLE is a non-profit organisation and the first in Africa to recycle printer cartridges. greenOFFICE is a Managed Print Service company.

School’s Water Bill Slashed By 85% An AquaTrip water saving system on trial at a Port Elizabeth school has cut the school’s water bill by 85 percent in its first month.

The system also resulted in a reduced sewerage service charge to effect a total cost saving of almost R30,000.

SA loses almost fifty percent of tap water (worth approximately R7bn) each year. Products like AquaTrip save water, reduce wastage, minimises damage and creates awareness (which usually reduces consumption).

More at www.aquatrip.com.au.

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NEWS & UPDATES Eco-adventurer concurs the Orange River December 11, 2013. Eco-Adventurer Ray Chaplin has become the first person to navigate the length of the Orange River – the country’s longest river and a lifeline for farmers, mining companies and communities who draw their drinking water from it.

Sponsored by Plastics|SA and Nampak Rigid Plastics, this IT professional turned adventurer and Cape Town resident started his 2 460 km quest on the 7th of April from the river’s source in the Maluti mountains in Lesotho. His main focus was to raise awareness of South Africa’s water quality and the threat of water pollution. He arrived safely on his riverboard at Alexander Bay, where the Orange River mouths into the sea on Tuesday, 10 December 2013. He also visited local communities and schools along his route to raise awareness the dangers of water pollution. As he journeyed down the river, Chaplin presented to over 9500 learners and collected over 5 500 bags of litter being collected through clean-ups, with many more follow-up clean-up days already being coordinated by schools and communities.

Renewable Energy Live On The Grid On Friday, 27 September 2013, South Africans started drawing renewable energy from the national grid as supplied by the Kalkbult solar power plant in the Northern Cape. The 75 megawatt (MW) solar photovoltaic (PV) plant will: • Generate 135 million kilowatt hours a year; • Avoid annual greenhouse gas emissions of 115 000 tons; • Create 300 000 new jobs; • Dedicate a portion of revenue and dividends to social and economic development in communities within a 50 kilometre radius; The plant is among 47 solar, wind and mini-hydro projects awarded 20-year contracts to generate electricity under the government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). www.news.iafrica.com

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NEWS & UPDATES

Leading The Way “South Africa is one of the world’s biggest centres for renewable-energy developments with over 3 900 MW of renewable-energy projects under construction” said, World Wide Fund for Nature SA chairperson, Valli Moosa at the November 2013 WWF-SA Living Planet conference in Sandton.

Sustainable Job Creation The job creation potential of South Africa’s green economy: • 98 000 new jobs in the short term (2011 – 2012) • 255 000 in the medium term (2013 – 2017) • 462 000 in the long term (2018 – 2025) Source: Green Jobs: An estimate of the direct employment potential of a greening South African economy by the IDC, DBSA and TIPS

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NEWS & UPDATES 49M receives 250 000 Pledges Eskom’s 49M campaign has received over 250 000 pledges from SA’s citizens and public and private sectors. Launched in response to SA’s constrained power system, 49M’s objectives are to inspire as many South Africans as possible to reduce their electricity consumption by at least 10%; and to do so by means of (permanent) behavioural change.

Among the 120 blue chip firms already participating in 49M are: Times Media Group, Pinnacle, Imperial Logistics, Aurecon, AngloGold Ashanti, Goldfields, nglo American, Standard Bank, Nedbank, Tsogo Sun, City Lodge, Santam, MTN and MassMart, Terrapinn, T-Systems and Samsung. In addition, Solidarity and NUM are members and the public sector is represented by, among others, the CSIR, Umjindi Municipality, the City of Umhlathuze and the eight, state-owned companies under the portfolio of Public Enterprises.

Add your pledge at www.49m.co.za

NBS: SA The Network for Business Sustainability South Africa (NBS: SA) opened for business in October 2013.

A non-profit organisation, the NBS: SA aims to establish a regional hub of academics experts and business leaders focused on building more sustainable business models. It has formed collaborative partnerships with the Institute of Business Science (GIBS) and the Graduate School of Business (GSB).

Source: www.nbs.net/about/nbs-south-africa/ Tel: 0861 21 21 21 E-mail: marketing@cobrawatertech.co.za Website: www.cobra.co.za

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NMMU Business School Building Graduates with Four Green Stars The Nelson Mandela Metropolitan University’s (NMMU) new business school in Port Elizabeth is SA’s first Public and Education Green Star-rated building.

According to www.eprop.co.za, “going green” can add up to 20% to building costs. The NMMU expects, however, to reap savings of at least R45 000 a year from efficient lighting, occupancy sensors and solar energy, and a further R68 778 in water savings.

“In Australia and some countries in Europe, a green approach is compulsory if building owners want government departments to occupy their buildings.

We want to do the right thing, but we also want to prepare for the changes that will come,” said Graham Gouws of the NMMU’s Infrastructure Projects team whose colleagues began research into international green building standards some four years ago.

SUSTAINABILITY CONSULTING CORPORATE SUSTAINABILITY PRODUCTS AND SERVICES DIRECTED AT MEASURABLE RETURN ON OBJECTIVE • Integrated and Sustainability Reporting (GRI) • Report Assurance (AA1000AS) • Online Sustainability Tools and Systems • Good Business Framework

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P&G’s Proud Achievement Over 99.35% of all materials entering Procter & Gamble’s (P&G) plants were used in products and through recycling, reuse, and conversion of waste to energy.

More than 50 of P&G’s global sites now send zero manufacturing waste to landfill, including every site in Germany.

Since 2010, P&G says it has reduced manufacturing waste by 56% per unit of production – more than double the company’s original goal.

Source: P&G 2013 Sustainability Report

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COLUMN

Sustainability through the Keyhole GBJ examines local stories of innovation and leadership merpak envelopes

A

combination of risk, compliance and opportunity is propelling sustainability to the top of boardroom agendas in South Africa. Companies are reinventing products processes and principles as they seek to be better corporate citizens and to differentiate themselves in a fast changing business landscape.

Merpak, SA’s leading envelope manufacturer, has embarked on a sustainability journey that is directed at doing just that.

The company has implemented various initiatives that are beginning to show meaningful results and yet there is an understanding from management that there is still a long way to go.

Founded in 1969, Merpak is privately owned and employs 163 employees – all of whom are actively engaged in the firm’s farsighted sustainability program. Sustainability is broad-based and includes various activities that relate to employees, local communities and the environment. Operationally there have been impressive cost reductions, innovations and productivity gains, which will be included in the company’s inaugural GRI sustainability report in 2014.

STRATEGIC INTEGRATION AND SENIOR SUPPORT At Merpak, sustainability is fully integrated into the firm’s value system and strategic plan. Sustainable development is a CEO-led business priority that is actively championed by every other senior executive in the team.

EMPLOYEE ENGAGEMENT Merpak recognised employee engagement as a critical component of the sustainability plan. The engagement process has included staff drives and company contributions to

meaningful employee-social projects that are making a difference.

For example, the company has been behind the establishment and on-going funding of the Aura Café near Alexandra in Johannesburg – a project that has united employees and the local community.

PRODUCT RESPONSIBILITY Up to four million people handle Merpak products on a daily basis and as a result, the business maintains a constant direct focus on product responsibility and the education of consumers and end-users.

The company is focused on the promotion of sustainably managed paper/timber resources which add economic, social and environmental value and contribute positively in the sustainability context.

Merpak sees its role as an influencer in this regard and is communicating with end users through the media (e.g. a recent 702/ Cape Talk radio campaign) and by using environmental messages on envelopes.

The company has also aligned itself with organisations such as Two Sides, an initiative that promotes the responsible production and use of print and paper, and serves to dispel common misconceptions about paper use.

INNOVATION Merpak has pioneered a printing process that saves up to 33% of ink use per print.

Apart from the savings that have being realised, the process has gone a long way to minimizing Volatile Organic Compounds (VOCs) levels in production, something that is soon to be legislated in South Africa.

The company is looking beyond compliance towards the opportunities that flow from an inclusive strategy of innovation.

TRAINING Merpak is extremely focused on being the provider of world class training for its sector.

By demonstrating leadership in this regard the company is able to remain strongly positioned where standards are concerned.

Merpak was also one of the first companies to register with the Good Business Framework system in South Africa, which incorporates an online executive sustainability training course that is aimed at providing key members of the organisation with international best practice sustainability knowledge and implementation guidelines.

EFFICIENCY AND RESPONSIBILITY Merpak measures resource use and the company is focused on the minimisation of waste and the reuse of materials where possible.

Paper can be recycled up to seven times and recycled content is used in certain product ranges and is re-introduced into the production of packaging material.

All glues are water-soluble and the company measures and reuses water in operations to the greatest extent possible.

In an attempt to target energy efficiency, skylights, power factor correctors and energy efficient motors have been installed in the factory. The company has switched from hot air blowing systems to infrared energy drying systems which have resulted in huge energy savings.

A frequency invertor monitors vacuum needs and supplies aligned production processes for optimal energy usage.

Two energy efficient vacuum pump motors have reduced power usage by 200amps.

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ADVERTORIAL

Green jobs build brighter futures CapeNature’s People and Conservation Programme is making a visible mark on the national job creation drive through its vibrant FTE (Full Time Equivalent) programme, aligned to the Expanded Public Works Programme.

C

apeNature is driven by the vision to establish biodiversity conservation as the foundation of a sustainable economy in the Western Cape. This is in line with our philosophy which is about transforming biodiversity conservation into a key component of local economic development in the province.

The FTE programme is a new approach of job creation focused on skilling and building young professionals, while assisting in achieving national government’s job creation targets.

Funding from Treasury last year enabled CapeNature to employ 139 unemployed individuals from impoverished areas of the Western Cape.

Through the FTE programme, CapeNature provides the communities unique opportunities of environmental, economic and social

development as this initiative enables the beneficiaries to take care of their families.

This year the number of FTEs doubled to 300 people, making a significant difference within CapeNature’s nature reserves as they assist the organisation in the completion of tasks planned for the year.

Some of their tasks include construction of fire breaks, alien vegetation clearing, maintenance of hiking trails and other tourism facilities.

“For some, being part of the FTE opportunity meant leaving their families to stay in our remote nature reserves working in harsh conditions. As they shared their encounters with nature, it became very clear that in time they have developed love for conservation,” says Zolile Simawo” Local Economic Development Manager for the People and Conservation Programme.

They are stationed at several nature reserves throughout the Western Cape, stretching from urban areas such as Cape Metro, some rural communities on the West Coast, farming communities of the Boland, fishing towns of the Overberg, mountainous parts of Langeberg and the isolated parts of the Karoo and Garden Route. Last year FTEs also underwent training on personal finance and other soft skills, enabling them to compete in the open labour market.

“Going forward, we have made inroads into lobbying for more funds and have secured mid-term contractual commitments to allow for much more sustainable training and monitoring of these individuals’ professional growth and stability. This will prepare them for better opportunities,” said Melikhaya Pantsi, Manager for CapeNature’s People and Conservation Programme.

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Food – water– life Part II of III on wise water use in agriculture

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O

ur farmers, who balance in their green fingers the delicate scales of food security and social equity, also face the commercial pressure of international markets and shifts in consumption patterns.

Yet South Africa’s commercial agriculture sector is increasingly viewed by upstream and downstream industries. The government especially views the sector as an overly thirsty and at times thrifty water user.

The term ‘farm water’ refers to water used to irrigate crops, leach harmful salts from fields, and to manage the environment.

Water Bombs For Farmers Recently, agriculture’s 62% guaranteed supply of our country’s surface water was fingered personally by the Environment and Water Affairs Ministry for nipping mining and industry growth in the bud, with a sweeping wag at using excess water as a private sector trading stock.

The National Water Policy Review, now in circulation, aims to address legislative gaps in the sector, and arguably seeks nationalisation of temporary and permanent water trading of any nature.

With 98% of this “basic human right” resource allocated – and a huge rural access backlog, the logic is clear. Interestingly, however, the Food and Agriculture Organisation (FAO) cites a greater reliance on farmer-owned and -operated irrigation among its key water-saving measures.

Water – Tricky Flow Models While the world population grew from 2.5 billion in 1950 to 7 billion, the irrigated area doubled and water withdrawals tripled.

When scarce water is under human control via irrigation systems, and irrigation gets a bad rap, it’s a sign to investigate the problems and the potential for improved efficiency.

To review irrigation practices, farmers must test cost and time overruns; poor management; the non-realization of full, planned benefits; adverse environmental and health impacts; and the exacerbation of inequities in the existing social and economic distribution of assets.

Globally since the mid-70s, ballooning construction costs, falling wheat and rice prices, the environmental and social cost revolution and poor irrigation performance at farm level have combined to shrink the necessary growth in the coverage of irrigated land.

Just as ageing irrigation projects have produced gradually declining yields, modernization of existing irrigation projects is becoming increasingly expensive. Old projects that were designed for monocropping also need to be redesigned to permit crop diversity, increase yields, conserve water and reduce environmental hazards.

Modernization involves canal lining, improved hydraulic control structures, better land development and appropriate irrigation techniques.

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South Africa’s nine National Botanical Gardens are beautiful, natural escapes close to some of the country’s most popular and vibrant urban centres. These Gardens offer visitors from near and far a taste of South Africa’s uniquely rich and colourful biodiversity.

The Gardens also feature an array of facilities including restaurants, function rooms and conference venues. Various activities such as hikes, picnics and shopping are also available.

Visit a National Botanical Garden near you and bring along the family or a friend.

SANBI Biodiversity for Life

FREE STATE National Botanical Garden Rayton Road (off Dan Pienaar Drive), Bloemfontein Tel: 051 436 3530 HANTAM National Botanical Garden Oorlogskloof Road, Nieuwoudtville Tel: 027 218 1200 HAROLD PORTER National Botanical Garden Clarence Drive, Betty’s Bay Tel: 028 272 9311 KAROO DESERT National Botanical Garden Roux Road, Panorama (off National Road), Worcester Tel: 023 347 0785 KIRSTENBOSCH National Botanical Garden Rhodes Drive, Newlands, Cape Town Tel: 021 799 8899 KWAZULU-NATAL National Botanical Garden Mayor’s Walk, Pietermaritzburg Tel: 033 344 3585 LOWVELD National Botanical Garden off the R40 White River Road (turn off at Riverside Value Mart intersection) Nelspruit Tel: 013 752 5531 PRETORIA National Botanical Garden 2 Cussonia Ave, Brummeria, Pretoria Tel: 012 843 5172 WALTER SISULU National Botanical Garden Malcolm Road, Poortview, Roodepoort Tel: 086 100 1278

Leading The Farm Horse To Water Economic water scarcity means a lack of infrastructure, with people often having to fetch water from rivers for domestic and agricultural use.

The resulting over-development of hydraulic infrastructure for irrigation often leads to environmental degradation and declining groundwater.

Around 1.3-million hectares of South African farmland is under irrigation.

The ideal is to apply the right amount of water, at the correct application rate and uniformly to a field, at the right time, with the least amount of non-beneficial water consumption (losses), and as economically as possible, says the Agricultural Research Council. The agriculture sector faces a complex challenge: producing more food of better quality while using less water per unit of output; providing rural people with resources and opportunities to live a healthy and productive life; applying clean technologies that ensure environmental sustainability; and contributing in productively to the economy.

Fluid Institutional Guides With agriculture in constant evolution, irrigation needs to adapt to new, more stringent requirements. The supply of water within large irrigated systems needs to be much more reliable and flexible than in the past.

Sound simple?

The South African Framework for Improved Efficiency of Irrigation Water Use views water-management infrastructure from four vantage points: the water source, bulk conveyance system, irrigation scheme and irrigation farm.

The South African Irrigation Institute represents 450 designers, engineers, soil scientists, crop experts, economists and irrigation farmers, as well as 50 manufacturers and suppliers of irrigation equipment, applying their minds to this task.

The FAO’s approach to irrigation and drainage, widely used today, is based on the relative yield loss of any crop, whether it be either herbaceous or woody species, to the relative reduction of water consumption, i.e. evapotranspiration, specific for any given crop and condition. Responding to the evolutionary idea of synthetic water production needs over the last three decades, the FAO created a unique crop simulation model, called AquaCrop. This simulation model calculates the crop biomass, based on the amount of water transpired, and the crop yield as the proportion of biomass that goes into the harvestable parts.

Cannot Control What Can’t Be Measured South African commercial farmers, and their institutional guides, would do well to invest more time and money into water measuring equipment. This will allow them to correctly

Loss of water from a crop field during the growing season results primarily from evaporation from the soil surface, and transpiration through the plant leaves. These processes are termed “evapotranspiration” and commonly abbreviated “ET”.

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measure and protect the precious water resources allocated to them, while at the same time reducing associated electricity costs. By combining the FAO’s AquaCrop model with a trusty water metering system, farmers can better motivate the retention of their water allocations to water authorities.

In turn, water authorities will have more reliable data to base their vital decisions on. The financial returns of an irrigator are strongly correlated with the volume and pattern of irrigation water application – saving water and electricity costs, says the Water Research Commission (WRC). The Department of Water Affairs (DWA) will also publish new regulations for river, irrigation scheme and farm water measurement, ensuring stricter enforcement of water metering.

Whereto From Here To assist farmers and policy-makers, the WRC published a report for sustainable on-farm and on-scheme irrigation water measurement with the Department of Agriculture, Forestry & Fisheries, guiding the process to effectively implement water measurement at river, irrigation scheme and farm level in South Africa.

For direct assistance, industry suppliers can be contacted via SABI.

Lani Botha

Top: Variation of the temperature stress coefficient (Ks) for cold (left) and heat stresses (right) on pollination Above: Schematic representation of the crop response to water stress, as simulated by AquaCrop, with indication (dotted arrows) of the processes (a to e) affected by water stress (adjusted from Raes et al., 2009).

The digital global map of irrigation areas October 2013 90°

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Projection: Robinson Resolution: 5 arc-minutes

http://www.fao.org/nr/water/aquastat/irrigationmap/index.stm Stefan Siebert, Verena Henrich (Institute of Crop Science and Resource Conservation, University of Bonn, Germany) and Karen Frenken, Jacob Burke (Land and Water Division, Food and Agriculture Organization of the United Nations, Rome, Italy)

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to green their urban regions, and public spaces,

South Africa actively suppor ts CSI initiatives that:

and places par ticular emphasis on previously disadvantaged residential set tlements.

• Help conser ve the environment • Protect and promote South African heritage

TOTAL South Africa values the par tnerships with all of

• Encourage education

its stakeholders and is confident that through these

• Suppor t social development

par tnerships many lives will be positively impacted.

TOTAL believes that its corporate social investments

As TOTAL moves away from being a petrochemical

will leave a lifelong legacy and provide long-term

company to a cleaner and better energy company.

benefit to communities.

They are constantly looking at ways to invest in and improve the renewable energy landscape.

For more information, please visit our website.

TOTAL South Africa is committed to the following initiatives: Awango by TOTAL is an innovative range of por table lighting products each complete with their own self-sustaining mini solar panel. Together with local NGO partners, an innovative ‘last mile’ sales distribution channel has been developed in order to ensure access to the lighting products and has resulted in the training and empowerment of unemployed South Africans.

You know where to turn

Make

the Circle

Bigger Supply chain sustainability takes effort and collaboration, as many companies are learning

S

ome companies are leveraging a reputational high ground as a result of certain meaningful interventions and policies in their supply chains.

Others are haemorrhaging brand value in the wake of nonsustainable revelations – scandals which could in many instances have been easily avoided.

According to those that are getting it right, supply chain sustainability is only achieved with massive levels of collaboration.

Companies should be engaging properly with key stakeholders and forging partnerships in the supply chain (and even across multiple networks) to make the supplier engagement circle bigger. With up to 60% of a company’s carbon footprint residing in its supply chain, the pressure from large firms for suppliers to act more responsibly is not surprising. However, the threat of reputation damage is seriously intensifying this pressure.There have been a few local examples of ‘breakdowns in the supply chain’ in recent years. South African consumers reacted strongly to meat industry revelations during this last year, and the sector has been forced to introduce much more control.

Large and multinational retail firms are conducting formal interviews with suppliers that may have an impact on risk and reputation. Similarly, the more progressive firms are looking for suppliers that can add positively to reputation by identifying areas of leadership that can be used in association or in collaborative marketing initiatives.Supply chain pressure is coming from all four corners it would seem. “Resource scarcity, investor and consumer demand and reputation management are driving the pressure firms are placing on their supply chains to adopt responsible sustainability approaches,” says Judith Lütz, procurement specialist and owner of Kitherley Consulting “Media scandals have also led to greater consumer awareness – a factor which escalates the risk to businesses with supply chains that have poor social or environmental standards.”

Social media in particular is amplifying issues that were previously swept under the carpet and this is leading to an increase in activism by the consumer.

GBJ

27

Competitive Advantage So what about the business case for supply chain sustainability?

In 2012, Deloitte reported that a few major retailers, working with a shipping supplier to pilot a “slow steaming” project, achieved fuel reductions of some 3,500 tons.

Savings are an obvious business benefit of supply chain sustainability; however product development and innovation can also result from a collaborative approach.

Procter and Gamble, in working through its sustainability scorecard, recently received innovative ideas from nearly 40% of its responding suppliers. The business case for sustainability in the supply chain must be made and must become ‘best practice’. The separation of doing good and doing well is no longer possible in the integrated supply chain. “The pressure on organisations to gain or retain competitive advantage means that sustainability is no longer about the good of society and the environment.”

Says Lütz, “It is about commercial success – cost savings associated with wholelife-costing procurement methods, waste reduction and innovation. It’s also about a robust supply base through ethical sourcing and supplier management, and it’s about reducing risk.”

The Larger Circle Risk mitigation and, value creation in the supply chain count among the key benefits of more, and more extensive collaboration between stakeholders. In an interview with the Harvard Business Review, Peter Senge (founder of the Society for Organisational Learning and an MIT Sloan School of Management faculty member), touched on collaboration as he underlined two steps for achieving change across supply chains:

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GBJ

“First, you focus on the nature of the relationships. In most supply chains, 90% of them are still transactional. If I’m a big manufacturer or retailer, I pressure my upstream suppliers...”. Such “pressure” usually takes the form of influence through policies, incentives and reward-based approaches, many of which are becoming mainstream and part of a universal template of best practice. Senge describes his second step as follows: “… you work with NGOs and other non-business entities for access to expertise that you can’t grow fast internally. Coca-Cola cut the water used to make a liter of Coke from over 3 liters to 2.5 liters.

But it was overlooking the 200-plus litres it took to grow the sugar that went into that Coke. It found that out because it partnered with the World Wildlife Fund (WWF), which knew how to analyse the water footprint of the value chain. No business knows what Oxfam does about the plight of farmers, or what the WWF knows about biodiversity and watersheds. The best businesses don’t just hire the sharpest people; they also keep expanding their expertise by (for example) partnering with NGOs that have deeper and broader knowledge.”

The Balancing Act Senge later expands on the importance of the right people by adding. “If people (employees) are stuck in the mind-set that a company exists to maximise ROI, with an emphasis on short-term financial performance, they won’t get far.

Lütz agrees with this and comments that on the one hand stakeholders are demanding results that benefit the bottom line, and on the other there is pressure to generate benefits for society and the environment.

“To successfully achieve supply chain

sustainability, procurement and supply chain professionals need to balance these demands” says Lutz. In order to give effect to this ‘balancing act’ and in order to see the successful application of great policies in the supply chain we will need the involvement of employees with specific attributes - real supply chain professionals.

Such professionals would have, among other skills, exceptional networking and communications capabilities and an integral understanding of the business context and the business case. On whether there is sufficient focus on supply chain sustainability training in South Africa, Lütz says: “There is still a lack of knowledge on how to integrate sustainability with other priorities such as cost, service and quality. There are a number of platforms, questionnaires and reporting initiatives that encourage sustainability in the supply chain. There is, however, a lack of effective training resources to enable companies to implement and improve on sustainability via meaningful programs that integrate with business strategies.”

However, it would appear that even the most skilled professionals would battle to achieve their goals in the absence of collaboration. It is encouraging to picture a future where broad, inclusive and responsive relationships across stakeholder groups in the supply chain are leveraged for collective benefit.. At the heart of these relationships will be an appreciation of social and environmental impacts, but this will not be the focus. The business landscape will change because of a much greater force which is based in the fundamental notion that most businesses must evolve to avoid risk and to compete.

By Lloyd Macfarlane

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SUPPLIERS & INSTALLERS OF:

sa’s textile and allied sectors set to adapt better use of resources and cleaner production techniques provide material for serious thought when lobbying the revival of SA’s clothing, textile, footwear and leather sector

O

perating in an energy resource and carbon-intensive economy, South Africa’s industries are under constant pressure. The pressure is applied both locally and from sustainability-minded export markets, insisting South Africa clean up its act.

Should South Africa not adhere to it’s call the markets may take their products elsewhere On the flip side, consumers are facing the very real challenge of making their money go further, and price becomes an overriding factor in the choice of products bought.

An industry under severe pressure on both fronts is South Africa’s clothing, textiles, footwear and leather sector. Since 1994, about R9.2 billion has been spent on modernising and upgrading the industry, making it efficient and internationally competitive and the local clothing and textile industry has grown accordingly to offer the full range of services from natural and synthetic fibre production to non-wovens, spinning, weaving, tufting, knitting, dyeing and finishing.

Although it is still infantile in the world markets, local success stories do exist.

Examples of such success are fabric mill Gelvenor Textiles that produces over half the world’s parachute fabrics, and local yarn producer Sans Fibres delivering 80% of the world’s apparel sewing thread.

Crisis = Opportunity Since the dawn of the new Millennium the industry has borne the brunt of trade barriers being lifted unleashing a wave of cheaper imported goods drowning local competition in our marketplace, with a notable contender in China.

The climate of risk afflicting the textiles sector did not abate here, with local producers facing a production-critical trilemma of increasing resource limitations, rising labour costs, and unprecedented hikes in water and energy prices since 2008.

The global economic meltdown of the same year saw retailers chasing profit margins and shareholder satisfaction by diverting their purchase orders to Far Eastern balance sheets. This cost the industry due to closures, retrenchments and general downsizing being the order of the day. Of course, the downstream effect of this uncertainty was a general halt in new product innovation otherwise, we would by now surely have enjoyed a boom in UV-resistant textiles to protect us against our intense summer heat.

The upside for the textile industry is its forward-thinking and embracing of the challenges posed by increased resource scarcity such as water and energy. Realising that all industries are competing for their spot in the market sun, the textile industry has been quick to its feet in re-thinking and re-inventing its production techniques focusing on process improvement opportunities.

Support At Hand – Every Step Of The Way Andre Page, Project Manager focusing on the clothing, textiles, footwear and leather sector at the National Cleaner Production Centre of South Africa (NCPC-SA), has been working hard for the past seven years to accelerate the adoption and implementation of Resource Efficiency and Cleaner Production (RECP) in the sector.

GBJ

31

SHRED THE MYTHS. FACE THE FACTS. BE PART OF THE PAPER STORY. Myth 1 Fact

Paper and printing kills trees and destroys forests.

Paper is a renewable, recyclable and sustainable resource. roduced from uth Africa is p All paper in So plantations, anaged timber sustainably m fibre. Just as or sugar cane recycled paper ed uced from farm cereal is prod your morning er made from , so too is pap wheat or maize ble port sustaina wn trees. Sup ro g nio at nt la p ices acturing pract paper manuf d an ry st re fo ts. rtified produc C or PEFC ce FS g in uy b y b

Myth 2 Fact

Paper and print has a high carbon footprint compared to digital mediums.

Trees convert greenhouse gases such as carbon dioxide (CO2) into life-giving oxygen.

Paper comes from trees and in South Africa, 600 million trees across 762,000 hectares are specifically grown for use in pulp and paper manufacture, making our plantations important carbon sinks for our planet. Paper mills also make use of renewable energy sources, further lowering paperâ&#x20AC;&#x2122;s carbon footprint. Reduce your own footprint by printing large

Myth 3

I want to go digital.

I donâ&#x20AC;&#x2122;t need paper in my life.

Fact

Paper is a pivotal part of everyday life.

documents, instead of referring to them on your computer again and again. One email with a 400kb attachment sent Take a look in yo

ur grocery cupboards and ba throom cabinets. Could you really go without the boxe s and labels that provide you with nutritional or pharmaceutic al information?

What about the toilet, tissue and hygiene products that you use?

Even non-paper products such as certain lip sticks and cellphone screen s are made from cellulose fibr e which comes from timber. Redi scover the place of pape r in

your life. And m

ake a concerted effort to re-use and recycle it.

www.thepaperstory.co.za

to 20 people is equivalent to burning a 100w light bulb for 30 minutes. (BBC, Costing the Earth, Global Warming, April 2009)

To this end, he connects industry producers with tailored incentive schemes from the Department of Trade and Industry (the dti) and the Industrial Development Corporation (IDC).

Having worked in this industry for over 25 years, Andre has a deep appreciation for its needs and challenges. â&#x20AC;&#x153;I firmly believe that the potential for the sector to grow businesses and enhance their competitiveness through adopting resource efficiency is being realised now. Through receptive transitioning, local producers are adopting competitive business practices that enhance their competitive advantage both locally and globally,â&#x20AC;? says Page.

A Strong Case In Point And On Point The NCPC-SA is the resource efficiency programme of the dti. It is helping the key manufacturing industry at large.

It assists the industry to improve its energy, water and material use patterns.

Assistance is offered in the form of RECP assessments, with a focus on priority sectors identified within the Industrial Policy Action Plan and in support of the objectives

Cut ting of fabric in factor y

Worker weaving at a loom

33

of the National Development Plan (NDP).

“These assessments are subsidised by government, and are designed to not only harness improvement in resource utilisation, but also to raise awareness,” says Page. “By building best practices, where cost-to-company is minimal, we encourage businesses to follow through to implementation.”

Andre Page, project manager at NCPC

Success Breeds Success During the last financial year (2012/13), the NCPC-SA engaged no less than 36 textile and allied companies about RECP, with 50% of these deciding to join the RECP programme and undergo assessments.

Of the R41-million in potential savings identified, close to R1.9-million had been implemented by way of low or now cost interventions – low hanging fruit – by the end of March 2013.

Another way the NCPC-SA is supporting this industry is through it’s internship programme. Now in it’s fourth year, the programme was launched in the clothing and textile sector, and it’s success has seen it expanded to other sectors.

The NCPC-SA recruits and places engineering graduates in manufacturing plants.

They are to identify and, where possible, implement resource efficiency and cleaner production interventions.

The interns are monitored and trained by technical mentors from the NCPC-SA and

companies benefit from having an on-site individual dedicated to identifying resource-saving opportunities at an extremely low cost to them.

Manufacturing companies are always being sought to act as host plants to the interns. There are also various dti industry incentives through the IDC for this industry.

One such scheme, the Productivity Incentive Programme (PIP), has been the benefactor of skilled employees, product improvements, and technology upgrades across industry peers.

With more companies closing down each year, the case is very clear that closing the gap between opportunity and reality can save the industry – not only in terms of cash flow but also mere survival.

In the next issue, we will explore further support, cost-saving and business opportunities that exist, and are being seized by forward-thinking producers, to make the most of their sustainability journey.

Manufacturers (particularly those in the key sectors serviced by the NCPC-SA) can email ncpc@csir.co.za to enquire about an RECP assessment, hosting an NCPC-SA intern or resource and energy efficiency training.

Lani Botha

@NCPC_SA

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ADVERTORIAL

Dube TradePort Commits to Sustainability by 2018 Dube TradePort Corporation has committed itself to incorporating environmental management into its corporate governance

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GBJ

ADVERTORIAL

C

ompanies and organisations globally are challenged to balance the competing demands of creating stakeholder value with sustainable business practices. As such, Dube TradePort Corporation has committed itself to incorporating environmental management into its corporate governance regime for the benefit of both current and future generations.

In order to meet this responsibility, the organisation will follow a system of continuous assessment so as to measure the impact of its activities and operations on the environment and to annually review and realign its objectives, targets and plans relating to significant environmental impacts associated with its operations by 2018. This commitment further builds on the organisation’s sustainability principle of being a responsible developer.

The commitment as regards Dube TradePort Corporation’s long-term sustainable environmental strategy, covers a broad range of areas, inclusive of land-use and ecology, water consumption, water quality, energy and GHG emissions, waste, air quality and noise, built environment and development and stakeholders.

“As an organisation charged with the economic development of the region, we know that the vitality of our business depends upon our ability to maintain a healthy environment and the sustainable use of our natural resources,” Dube TradePort Corporation’s Chief Executive Officer, Ms Saxen van Coller, said.

“We also know where we can have the greatest impact from an environmental perspective. We believe that through the continuous monitoring and evaluation of our operations, implementing a sustainable supply chain and incorporating environmental key performance indicators across all levels of our organisation, we will be able to create long-term economic, environmental and social value,” she added.

Improving sustainability is an ongoing process; one that Dube TradePort Corporation does not undertake alone. With almost twothirds of Dube TradePort’ s carbon emissions and a further 99% percent of CO² emissions occurring in terms of airport-related activities - primarily during the landing and taking-off of aircraft - the organisation believes it is able to achieve the greatest impact by working with industry partners and non-governmental agencies and other stakeholders to identify new solutions.

“Dube TradePort is committed to being a responsible developer and has taken the lead in promoting the idea of cultivating a truly sustainable urban form, by embracing critical key issues of a healthy ecosystem,

water conservation and renewable energy,” said Ms van Coller.

Since 2011, Dube TradePort Corporation and Tricorona have been working together to manage and reduce Dube TradePort precinct, including King Shaka International Airport, carbon emissions through four levels of ‘Mapping’, ‘Reduction’, ‘Optimisation’ and ‘Neutrality,’ thus integrating sustainability into the organisation’s development.

The carbon footprint of the entire Dube TradePort precinct, including King Shaka International Airport, has been calculated at 181 000 tons per annum.

As part of our mitigating and adaptive strategy, Dube TradePort Corporation has already committed R12 million to a massive 619-hectare rehabilitation and restoration project, which involves species rescue, reforestation and the clearing of alien plants.

Rehabilitated areas have already been transformed into spaces, which create some 80 full-time jobs for the local community.

The project aims to: • Offset the environmental impact of Dube TradePort developments, including Dube TradeZone, support zones, access roads and the like; • Create an aesthetically pleasing environment; • Create healthy ecosystems which host a rich biosphere; • Re-introduce indigenous plants to the area; and • Create an environment suitable for nature and industry to co-exist harmoniously.

37

An update on the REIPPP

The government has made it’s intention to diversify the energy mix crystal clear. We are on target to reduce greenhouse emissions by 34% by 2020.

T

he Government’s Integrated Resource Plan (IRP), published in May 2011, sets out South Africa’s required new generation capacity for the next 20 years.

As this plan followed a time of serious energy shortages, it is encouraging to see government’s clear intention to diversify the energy mix and move away from fossil fuels, break its monopoly by handing over some of the responsibility of providing energy and by moving towards renewable energy; synchronising with Environmental Agency targets to reduce greenhouse gas emissions by 34% by 2020.

In accordance with the IRP, the Request for Proposal (RFP) was published in August 2011. This provides for the procurement of renewable energy up to 2016 in terms of the REIPPP programme, which is a bidding system for the private sector, with the preferred bidders entering into a 20 year Power Purchase agreement (PPA) with Eskom, as well as an Implementation Agreement with the Department of Energy (DOE).

The private sector alternative energy is essential to energy stability while also presenting an opportunity to take advantage for the possibilities relating to the Green Economy and boost employment.

The REIPPP programme was set to procure 3 725 MW of renewable energy capacity and is expected to attract investments of around R100-billion between 2012 and 2016. In some of the technologies included in the bidding programme, the target for foreign investment is as high as 60% with a minimum 40% South African Equity Participation which is intended to attract developers to South Africa in order to expand employment opportunities and broaden skills.

An estimated amount of US$ 10 million was spent on fine tuning the tender design and bid evaluation process. A large legal, technical and financial advisory team was assembled (local & international). There is a general consensus that the quality of the

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documentation is excellent and that there is a secure and transparent evaluation process.

The IPP programme is being conducted in five phases or tender rounds termed Windows, Bids or Rounds. Procurement caps and price caps were set for individual technologies as well as price caps for each technology.

Financial Close was sent for 6 months after announcement of preferred bidder status. The preferred bidders enter into standard 20 year, locally denominated, Power Purchase Agreement (PPA) with Eskom and Implementation Agreements with the Department of Energy, where the IPP is obliged to deliver on economic development promises. This contract also makes the DOE liable to the IPP for any default on the part of the buyer (Eskom). evaluation and criteria Pricing is the main evaluation criteria with a 70% evaluation weighting. Prices were capped for each technology.

Initially, Wind projects would need to be priced at below 115c/kWh, solar PV and CSP at below 285c/kWh, while a cap of 107c/ kWh had been set for biomass, 80c/kWh for biogas, 60c/kWh for landfill gas and 103c/ kWh for mini hydro. The Bids were evaluated by a team of professional financial, technical and legal advisers and approved by the DoE’s adjudication committee. The non-price criteria, which carried a 30% evaluation weighting, included issues such as localisation, black economic empowerment, preferential procurement, community development and job creation. The bids needed to be financially sound in structure, technically viable and have received all the necessary environmental approvals. Prospective bidders were also expected to pay a non-refundable fee of ZAR 15,000.00 to be able to access the request for proposal documentation and a bid bond of ZAR 100,000.00 for every megawatt of capacity bid. (100 MW project= 10 million ZAR bid bond)

Kalkbult – the first solar power plant goes live Tuesday 12 November was a momentous day for South Africa. Kalkbult the first solar power plant under the IPP programme, connected to the grid. So now for the first time, even though it is only a very small portion, our energy usage is powered by the sun. This 75 MW PV power station is halfway between De Aar and Hopetown and will generate 155 million kilowatt hours a year – enough to power the annual consumption of 30 000 plus households.

The project was three months ahead of schedule, built by Scatec -a Norwegian company, it consists of 312 000 solar panels and covers 105 hectares of land.

It is built on land leased from a sheep farmer who will continue to farm on the land surrounding it, and 600 employees from the local community where involved in the construction and many of those will continue to manage the facility for its 20 year planned lifespan.

REIPPP technology targets • • • • • • • • •

technology onshore wind concentrated solar thermal (csp) solar photovoltaic biomass biogas landfill gas small hydro (up to 40 mw) small projects

0 6 3 R E T N SE on partner in irrigation

Africa’s pivot of success

al

pivot r u o Y –

COMPANY PROFILE SENTER 360 is a South African company. We have a simple policy of doing business with the highest standards of integrity. We therefore pride ourselves on not merely selling a product, but building long term relationships.

Designed and built in South Africa in 1994, SENTER 360 centre pivots are known for their superior construction quality and strength – above industry standards, and we as a company are renowned for excellent sales and after-sales service.

We have been in the irrigation industry for more than 20 years, specialising in surveying, system design, installation and commissioning of irrigation systems.

We have growing business interests in South Africa, Africa and internationally and offer a turn-key project development service from feasibility study phase to implementation and project management.

One of our recent achievements has been the allocation of an international tender for the supply of more than 50 centre pivots to the South African Government for the Taung irrigation scheme.

Tel: +27 (18) 469–1331 Email: info@senter360.co.za www.senter360.co.za

KEY ADVANTAGES OF SENTER 360 • The most effective way of irrigating large areas • Ensures constant high yields • More than 96% water distribution accuracy • Manufactured with high quality materials to very high standards of accuracy • Only the best quality heavy-duty drive train components are used to cope with terrain and ensuring years of reliable service • Senter 360 has the strongest centre pivot span structure available today • We carry high levels of stock to be able to supply when you need it

Africa’s pivot of success Since 1994

Aramex is in South Africa

Bids: Round 1 Bid date: 4 November 2011 Preferred bidders announced: 7 December 2011 Financial close: 19 June 2012 Agreements entered into on 5th November 2013 Bid Tender capacity to be awarded 3625 MW 53 bids received with a capacity of 2128 MW 28 qualified and awarded preferred bidder status with a potential capacity of 1415.52 MW 25 noncompliant bids 18 Solar Photovoltaic (PV) Projects 8 Onshore Wind Projects 2 Concentrated Solar Power (CSP) Projects • Prices marginally below tender caps • Financial close and contract signing within 15 months of RFP • Estimated total investment of US$ 6 billion • funding mostly by local banks • Real returns close to 17% • All have commenced construction • First project Kalkbult connects to grid on 12 November 2013

Successful bidding candidates The 18 solar PV projects that made it through to the preferred-bidder stage had a combined capacity of 631.53 MW and were named as: SlimSun Swartland solar park (5 MW) RustMo1 solar farm (6.76 MW) Mulilo Renewable Energy Solar PV De Aar (9.65 MW) Konkoonsies Solar (9.65 MW) Aries Solar (9.65 MW) Greefspan PV power plant (10 MW) Herbert PV power plant (19.9 MW) Mulilo Renewable Energy solar PV Prieska (19.93 MW) Soutpan solar park (28 MW) Witkop solar park (30 MW) Touwsrivier project (36 MW) De Aar Solar PV (48.25 MW), South Africa Mainstream Renewable Power Droogfontein project (48.25 MW) Letsatsi Power Company (64 MW) Lesedi Power Company (64 MW) Kalkbult project (72.5 MW) Kathu solar energy facility (75 MW) Solar Capital De Aar (75 MW).

The two solar CSP projects were named as: Khi Solar One (50 MW) Ka Xu Solar One (100 MW) The 8 wind projects listed, which collectively represented 633.99 MW of capacity, included: Dassiesklip wind energy facility (26.19 MW) MetroWind Van Stadens wind farm (26.19 MW) Hopefield wind farm (65.40 MW) Noblesfontein (72.75 MW) Red Cap Kouga wind farm - Oyster Bay (77.6 MW) Dorper wind farm (97 MW) Jeffreys Bay project (133.86 MW) Cookhouse wind farm (135 MW) The projects recommended for selection were located across all nine provinces, excluding KwaZulu-Natal and Mpumalanga. All projects would need to be generating power by mid2014, apart from the CSP plants, which had been given a deadline of 2016.

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Bids: Round 2 Bid date: 5 March 2012 Preferred bidders announced: 21 May 2012 Financial close: 13 December 2012 Agreements entered into on 9th May 2013 • Bid Tender Capacity to be awarded 1275 MW • 79 bids received with a capacity of 3255 MW • 51 qualified • 9 noncompliant bids • 19 awarded preferred bidder status with a capacity of 1045 MW • Prices drop • Local content increases • All have reached financial close • Estimated total investment US$ 3.5 billion

Successful bidding candidates The 9 Solar PV projects that were selected as preferred bidders with a combined allocation of 417.1 MW against an allocation of 450 MW and were named as: Solar Capital De Aar 3 (75 MW) Sishen Solar facility (74 MW) Aurora project (9 MW) Vredendal project (8.8 MW) Linde project (36.8 MW) Dreunberg venture (69.6 MW) Jasper Power Company development () Boshoff Solar Park (60 MW) Upington Solar PV plant (8.9 MW) The 7 wind projects selected, representing 562.6 MW: Gouda wind facility (135.2 MW), the 137.9 MW Amakhala Emoyeni (Phase 1) (137.9 MW) Tsitsikamma Community wind farm (94.8 MW) West Coast 1 project (90.8 MW) Waainek venture (23.4 MW) Grassridge project (59.8 MW) Chaba project (20.6 MW) The two small hydropower preferred bidders were named as: The 4.3 MW Stortemelk hydro scheme and the 10 MW Neusberg hydroelectric project.

The 50 MW CSP project was named as the Bokpoort CSP project.

The average prices offered by the solar PV developers fell.

There was a reduction from 275 c/kWh in window one to 165c/kWh, while wind fell from 114c/kWh to an impressive 89c/kWh. The CSP prices fell slightly from 268c/ kWh to 251c/kWh. The second-window preferred bidders also offered superior local content terms, with solar PV rising to 47.5% from 28.5%, wind rising from 21.7% to 36.7% and the CSP projects rising from 21% to 36.5%.

GBJ

43

Bids: round 3 Bid date: 19 August 2013 Preferred bidders announced: 29 October 2013 & 31 December 2013 Financial close 30 July 2014 Bid Tender capacity to be awarded 1473.1 MW NEW additional allocation of 200 MW for Concentrated Solar Power 93 bids received with a capacity of 6023 MW 58 qualified 17 awarded preferred bidder status with a capacity of 1471.5 MW 2 stage preferred bidder allocation No small hydro despite a tender capacity of 121 MW Bidders need to make Economic Development commitments regarding the actual number of jobs created over the life of the project and account for every job that they commit to.

Stringent BEE weighting – encouraging bidders to work with new BEE investors, particularly those who are broad based and most importantly have a significant amount of local community ownership.

Pricing drops further = +/- 40% drop from Round 1 Foreign Investment 25% debt, 50% equity Estimates total investment US$ 4.5 billion

Successful bidding candidates Onshore Wind - 7 Preferred Bidders totalling 787 MW Solar Photovoltaic - 6 Preferred Bidders totalling 435 MW Biomass - 1 Preferred Bidder of 16 MW Landfill Gas - 1 Preferred Bidder of 18 MW Concentrated Solar - 2 Preferred Bidders totalling 200 MW The 6 Solar PV projects that were selected as preferred bidders with a combined allocation of 435 MW against an available allocation of 401 MW and were named as: Adams Solar PV 2 (75 MW ) Tom Burke Solar Park (60 MW) Mulilo Sonnedix Prieska PV (75 MW) Electra Capital (75 MW) Pulida Solar Park (75 MW) Mulilo Prieska PV (75 MW) The 7 wind projects selected, representing 787 MW against an available allocation of 654 MW: Red Cap – Gibson Bay (110 MW) Longyuan Mulilo De Aar 2 North Wind Energy Facility (139 MW) Nojoli Wind Farm (87 MW) Longyuan Mulilo De Aar Maanhaarberg Wind Energy Facility (96 MW) Khobab Wind Farm (138 MW) Noupoort Mainstream Wind (79 MW) Loeriesfontein 2 Wind Farm (138 MW) Concentrated Solar Power (CSP): Xina CSP South Africa (100 MW) Karoshoek Consortium (100 MW) Landfill Gas: Johannesburg Landfill Gas to Electricity (18 MW) Biomass Mkuze (16 MW) The average prices offered by the solar PV developers plummet from 165c/ kWh in window 2 to 82c/kWh, while wind made a more modest decline in price from 89c/ kWh to 73c/kWh.

44

GBJ

The CSP prices for Window 3 are not comparable with windows 1 & 2 as the pricing formula changed. Round 3 price 163c/kWh (Round 2 was 251c/kWh).

The third-window preferred bidders also offered superior local content terms, with solar PV rising from 47.5% to 53.8%, wind rising from 36.7% to 46.7% and the CSP projects rising from 36.5% to 44.3%.

Round 3 promises to deliver 8000 jobs during construction phase and 18 000 during the operations period (1 job = 12 person- months).

Due to the large number of very competitive Bid Responses submitted for the Third Bid Submission Date in the Onshore Wind and Solar Photovoltaic Technologies, and the Department is considering the appointment of additional Preferred Bidders for those Technologies from the remaining Compliant Bidders.

The Department will make a further announcement regarding its decision in this regard in due course, and is intending to do so by not later than 31 December 2013.

The future of renewable energy is bright.

ANALYSIS OF OVERALL MW ALLOCATION TECHNOLOGY MW allocated Round 1 MW allocated Round 2 MW allocated Round 3 SOLAR PHOTOVOLTAIC 632 417 435 WIND 634 563 787 CONCENTRATED SOLAR THERMAL (CSP) 150 50 200

SMALL HYDRO (UP TO 40 MW) 0 14 0 LANDFILL GAS 0 0 18 BIOMASS 0 0 16 BIOGAS 0 0 0 TOTAL 1416 1044 1456

References: The information in this Chapter is based on information requested from the Department of Energy, as well as the authors own experience. www.ipprenewables.co.za

Robyn Brown

S E R Y T R U O Y E MAK

LAST LONGER

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Office equipment Computers

Hot water

Get your co-workers into the habit of switching off computers before leaving for home, rather than leaving them on, or on standby, as most devices still use up to 51% electricity when idle.

Solar geysers Consider installing solar geysers on the roof of your office building.

Alternatively, consider switching geysers off completely.

Copiers and printers Photocopiers still use up to 51% when they are on standby mode.

Switch off photocopiers before going home.

Climate control Server rooms Modify your temperature inside your server rooms. This will make no difference to your equipment, but a huge difference to your power bill.

Air-conditioning Make sure the airconditioning system is turned off overnight.

Keep the temperature for the air-conditioning between 18°C and 22°C.

Lighting Occupancy sensors Install occupancy sensors throughout your business premises and save a fortune on your power bill.

Heating Do preventative maintenance on your heating system instead of waiting for the system to malfunction. If your budget allows it, consider investing in a heat recovery system.

Light switches All light switches around the office should be clearly labeled.

This will ensure that office users don’t switch on the wrong lights.

Light up enclosed spaces separately, instead of having one light switch for multiple areas.

Ventilation If there is no temperature difference between the inside and outside of your building, switch off the ventilation system and open the windows.

Natural light Paint walls and ceilings with lighter colours and make the best of sunlight, afterall, it’s free.

Anton Engelbrecht

Tel: 011 214 1200

anton@globalinterface.co.za