Green Economy Journal Issue 47 by GreenEconomyMedia

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ISSUE 47 | 2021

Economy G

CIRCULAR ECONOMY: Take, make, dispose no more ESG IMPACT: Reporting on the rise PRIVATE INVESTMENT: Equity for development AUTOMOTIVE MASTERPLAN: The roadmap to an electric future

PUBLISHER’S NOTE I feel that Barbara Creecy and her colleagues at the Department of Forestry, Fisheries and the Environment (DFFE) have done their jobs well, and without fear or favour, in a country where such sound administrative functioning seldom prevails. Specifically, I am referring to the DFFE’s recent decision to not grant the EIA for the three Karpowership projects that together won 1 220MW of generation projects across the ports of Richards Bay, Coega and Saldana Bay. The department cited certain key failures within the EIA application, and despite the projects enjoying apparent political support from other areas of influence, declined the applications. Karpowership have right of appeal, and appeal they will, but the writing is on the wall and the deadline to reach final closure is imminent. Typically, such appeal processes take months and often the remedy is for the applicant to repeat or complete certain aspects of their applications, which in turn takes months. The likelihood therefore of Karpowership making the financial close deadline of end-July should in theory simply not be possible. Making this deadline without hiccups is difficult enough. So hypothetically, should the Karpowerships projects fall away, what then? The DMRE will be light on emergency power by 1 220MW. How will they make this up? There are a number of options: They could reach out to compliant losing RMIPPPP bidders and request Best and Final Offers. They could negotiate on fair price as in the case of Scatec. They could reach out to existing REIPPPP projects and request any additional capacity. Or they could do nothing and hope this capacity and more will come on stream through private projects that are now exempt from licensing and ministerial consent due to the impending lifting of the exemption for own generation to 100MW. But maybe I’m getting ahead of myself.

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EDITOR: Alexis Knipe alexis@greeneconomy.media JOINT PUBLISHER AND PRODUCER: Gordon Brown gordon@greeneconomy.media JOINT PUBLISHER AND PRODUCER: Danielle Solomons danielle@greeneconomy.media

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www.greeneconomy.media Gordon Brown, Publisher

EDITOR’S NOTE Of the many lessons taught to us by the coronavirus, the treatment of workers is perhaps the most important. In this issue, Llewellyn van Wyk speaks about how the pandemic has created a devastating health and economic crisis that illustrates the precarious reality of low-wage, gig and marginalised workers (page 10). With the rising focus on the green economy, an opportunity exists to advance the nature of work: green jobs can both close the equity gap and improve the environment. See the great work that SAPVIA and SAWEA have done in this regard (page 46). This edition of the Journal focuses on infrastructure and construction. Vuyo Ntoi, from AIIM, attests that private sector investment is critical to kickstarting an economic revival (page 20). Chris Whyte, ACEN, speaks about circular economy in construction (page 22) and don’t miss our article on Smart Places (page 28). Other articles not to miss are the interview with the SA Water Chamber CEO about applying circularity to South Africa’s water use (page 36), and our article on how the tourism sector has taken the brunt of the economic impact from Covid-19 (page 40). Enjoy the read!

Alexis Knipe, Editor

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 Publisher.

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NEWS & SNIPPETS

ESG STRATEGY No sector is unaffected by increasing ESG demands

THOUGHT

LEADERSHIP

The essential non-essential

ENERGY Power Purchase Agreements are shining a new light on solar

ENVIRONMENT Collective innovation: development must build resilience in the face of climate change

INFRASTRUCTURE The need for private sector investment into renewable energy

CONSTRUCTION Circular economy in construction

CONSTRUCTION Kenzo Aluminium windows and doors, made by Swartland

INFRASTRUCTURE Smart places are directed towards enabling economic growth

WATER Veolia Water Technologies speaks about the delicate balance between cost and benefit

WATER Applying a circular economy to South Africa’s water use

SPECIAL REPORT An excerpt from the DTIC report: The South African Road to Production of Electric Vehicles

TOURISM Tourism has taken the brunt of the Covid-19 economic impact

ENERGY Wind power is amped for self-generation

ENERGY Celebrating 10 years of clean energy

38 5

NEWS & SNIPPETS

MINISTER DIDIZA PRAISES ILLOVO Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, has praised the sugar giant Illovo South Africa for the successful culmination of its R127-million life-changing Small-Scale Grower Cane Development Project that has created over 860 jobs in KwaZulu-Natal.

OPPORTUNITIES FOR THE WESTERN CAPE GREEN ECONOMY GreenCape’s 2021 Market Intelligence Reports (MIRs), developed in partnership with the Western Cape Government’s Department of Economic Development and Tourism, highlight the investment opportunities in key sectors of the green economy in the province. ENERGY With 24 Western Cape municipalities that allow small-scale embedded generation, and 19 municipalities that have regulator-approved feed-in tariffs, the province is home to a large portion of more than 1.4GW of rooftop solar PV. “Behind-the-meter battery storage provides an emerging investment opportunity in the energy storage market,” says Argon Poorun, GreenCape energy analyst. WATER “Investing in non-revenue water could realise savings of R7.3-billion per year in bulk water costs,” says Ashton Mpofu, GreenCape. “Nonsewered sanitation systems can address the challenge of delivering sustainable sanitation services in new property developments, rural communities, and low-income and informal

settlements, with the investment potential of R41.4-billion estimated in order to achieve universal access to safe sanitation.” “Beneficiation or alternative disposal solutions for wastewater sludges must be developed due to the national ban on liquid wastes at landfills that was put in place in 2019,” says Rudi Botha, water sector analyst. “There are opportunities to transport and beneficiate sludge to the value of about R330-million per year across all metros, excluding Tshwane, with almost R86-million in the Western Cape.” WASTE “Opportunities within the organics, plastic and e-waste sectors have the potential to add up to R1.1-billion in value to the Cape Town economy,” states Sam Smout, waste sector analyst. “It was estimated that a further R11.5-billion per year could be unlocked by 2023 by diverting up to 20-million ton of waste from landfill. The anticipated benefits could include 45 000 additional formal jobs and 82 000 indirect jobs, as well as the creation of 4 300 SMMEs.” www.green-cape.co.za

With a R63-million grant from the National Treasury’s Job Fund matched by R63-million funding by Illovo Sugar South Africa, 119 local contractors have increased the supply of sugarcane for Illovo’s undersupplied Sezela factory by doubling the original 150 000 tons per annum forecast. “We need more public-spirited players like Illovo Sugar who are willing to work with government in order to leverage our resources in the commercialisation of black farmers, while we ensure that we give meaningful support to those who are beneficiaries of land reform,” says Minister Didiza.

SEIFSA WELCOMES THE STEEL MASTERPLAN The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the launch of the steel masterplan, which focuses on short- to medium-term interventions that build on the ongoing measures being implemented to ensure the longer-term growth, protection and survival of the primary and secondary steel industries. “The challenges along the way will be complex, but this is the time for all stakeholders, including government, business and labour to come together in agreeing on measures to preserve South Africa’s steel producing capacity, while protecting downstream users,” says SEIFSA operations director, Lucio Trentini.

With rampant unemployment, poverty and inequality, it is vital that plans to reindustrialise the sector, inclusive of the

primary steel and downstream industries employing in excess of 200 000 employees, do not fail.

NEWS & SNIPPETS

RETIREMENT FUNDS AND INFRASTRUCTURE Ageing infrastructure remains a major obstacle preventing South Africa from realising its economic growth potential. The Sanlam 2021 Benchmark Survey found that standalone retirement funds anticipate investing 6.6% of their assets, on average, in infrastructure. With the current infrastructure funding gap sitting at an estimated R1.7-trillion over the next 10 to 15 years, the question is, are these allocations enough to make a real impact? “While 6.6% may appear to be a relatively small allocation, we must consider that retirement funds hold R4.5-trillion in assets, this translates to almost R300-billion in direct infrastructure investments which is fairly substantial – but unfortunately still well short of plugging the R1.7-trillion funding gap,” says Darryl Moodley, head of tailored investments at Sanlam Corporate Investments.

MARINE LITTER: A MATTER OF NATIONAL CONCERN

In response to this concern, the Department of Forestry, Fisheries and the Environment has developed a “Source-to-Sea” initiative focusing on managing litter sources, mainly from upstream catchments where the litter gets transported to the ocean and coastal areas by rivers and tributaries that discharge into the ocean. Minister Creecy said that as part of the presidency’s employment stimulus initiative, the Department is expanding the Sourceto-Sea programme into 16 coastal districts with the target of creating approximately 1 600 job opportunities. “As we grow our ocean economy, we also have to be cognisant of the impact of increasing human activity on the health of our oceans. It is essential that we manage our footprint and impact and put in place measures to protect our ocean and coastal ecosystems and biodiversity within the context of sustainable development. It is for this reason that South Africa’s Oceans Economy programme includes a specific priority and focus on marine protection and ocean governance,” said Minister Creecy.

“Over the last 20 to 30 years South Africa has not invested enough in infrastructure to keep up with the demands of an emerging economy. And unlike investing in listed stocks or bonds, the amazing characteristic about infrastructure investments is the opportunity to build something tangible, it’s about procuring land, sourcing materials, and most importantly, job creation. Investing in infrastructure really is at the core of improving society’s productive capacity and espousing confidence.” Historically, retirement funds have been reticent to invest in infrastructure. The longterm nature of the contracts – with government as central role player – make these investments complicated to structure and they have limited flexibility post-investment.

Moodley believes that with the proposed changes to Regulation 28 of the Pension Funds Act, more visibility has been generated around this asset class and trustees need to engage deeply on incorporating infrastructure assets into fund portfolios. He adds that government and regulators need to create a conducive regulatory environment with policy certainty to ensure that the millions being poured into infrastructure will be into productive assets in high impact sectors of the economy. Moodly concludes by encouraging retirement funds to look at retirement from a more holistic point of view. “What is the impact of our investment on the environment, on the climate, on the society we live in? What are you going to do to ensure that your investments and those of your clients are on the right side of history?”

PRESIDENT ANNOUNCES NEW PORT REFORM President Ramaphosa recently announced the establishment of the National Ports Authority as an independent, wholly owned subsidiary of Transnet in terms of the National Ports Act, 12 of 2005. This represents a significant reform of the transport sector that will enable the transformation of South Africa’s ports system. The establishment of a new subsidiary will fulfil the intentions of the Act to create an independent ports authority. It will separate the roles of the Transnet National Ports Authority, as the owner of ports infrastructure, and Transnet Port Terminals, as the terminal operator, which are currently operating divisions of Transnet. This reform will enable the reinvestment of port revenues in port infrastructure and will ensure that terminal operators are treated fairly and equally, enabling greater private sector participation in terminal operations. The state will remain the sole owner of all port infrastructure through the National Ports Authority. This measure is being implemented as part of government’s broader strategy to enhance the performance of the ports and invest in the expansion and upgrading of port infrastructure.

Passive treatment system under construction in Carolina, Witbank.

@CGS_RSA I

THOUGHT LEADERSHIP

THE ESSENTIAL

NON-ESSENTIAL

“Look, the people you are after are the people you depend on. We cook your meals, we haul your trash, we connect your calls, we drive your ambulances, we guard you while you sleep. Do not fuck with us.” Fight Club, 1999 BY LLEWELLYN VAN WYK, B. ARCH; MSC. (APPLIED), URBAN ANALYST

ight Club is a darkly comic drama film directed by David Fincher in 1999 and based on the 1996 novel of the same name by Chuck Palahniuk. Starring Brad Pitt, Edward Norton and Helena Bonham Carter, Norton stars as a depressed young man (named in the credits only as “Narrator”) who has become a small cog in the world of big business. He does not like his work, gets no sense of reward from it, cannot sleep, and feels alienated from the world at large. Later when the fight club is formed, the participants dress and groom similarly, allowing them to symbolically fight themselves at the club and gain the same power. These fights are a representation of the struggle of the proletarian at the hands of a higher capitalist power: by asserting himself as capable of having the same power he thus becomes his own master.

THOUGHT LEADERSHIP Of the many lessons taught by Covid-19, the treatment of workers is perhaps the most valuable of all. With the emerging focus on the development of a green economy, an opportunity exists to elevate the nature of work while also improving sustainability. Green jobs, it is argued, can both improve the environment and close the equity gap if policymakers leverage market dynamics and public investments that motivate green employers to adopt a work system based on high quality and skill standards. Covid-19 has starkly highlighted the central role of those whose daily jobs ensure our health and safety. Just the identification of this group as “essential workers” says it all although the opposite term raises difficult philosophical notions about the value of “non-essentials”. But the divisions go well beyond essential and non-essential. The pandemic has created a catastrophic health and economic crisis that has illuminated the fragile existence of low-wage and gig workers, in general, and that of marginalised workers, in particular. Martina Mejean, board chair of the Mastercard Impact Fund, and Marcela Escobari, senior fellow at the Brookings Institution, point out that surging unemployment claims show that the labour market, built for efficiency, can crumble in times of crisis, with huge human and economic costs. They tellingly argue that the pandemic has exposed a weak point in a country’s economy namely the precarity of low-wage workers. Many low-wage workers have adapted to unimaginable circumstances, risking their own well-being, implementing public health protocols, and keeping the essential bits of the economy, like access to food, running.1 Robert Reich, the Secretary of Labour in the Clinton Administration and now a professor at the University of California, Berkeley, suggests that the coronavirus crisis has added new layers to our national divide: the tested and the untested; the food deliverers and the food receivers; the maskwearers and the maskless; the less vulnerable young and the vulnerable old. He argues that four new classes have been produced since Covid-19 swept from coast to coast.

While Covid-19 is no discriminator of people, social marginalisation has put certain categories of people at higher risk than others.

The “Remotes” are the privileged professional, managerial and technical workers still at their jobs, usually working remotely and usually for the same pay. The “Essentials” range from medical staff to workers in the foodsupply chain, the police and truck drivers who are putting their lives at risk with limited physical or economic protection. The “Unpaid” are the growing numbers of the unemployed. Forty-three per cent of US adults surveyed said that they or someone in their household had lost a job or taken a pay cut owing to the pandemic, according to a Pew Research Centre report. More than 30-million Americans lost their jobs in just two months and US unemployment hit 14% – unprecedented numbers since the Great Depression of the 1930s, Reich warns. The final class is the broad range of the “Forgotten” – the homeless, the migrant workers, the disabled, the elderly, and the imprisoned. Outbreaks in nursing homes, homeless shelters and prisons have proved among the most merciless.2 Sacoby Wilson, an environmental health scientist at the University of Maryland, is one of many who believes that the coronavirus has cast a spotlight on largely unnoticed segments of society, from low-income people in polluted neighbourhoods, to residents of nursing homes and

prisons, to workers in the nation’s meatpacking plants. As he notes, “One thing that Covid-19 has done, it has made a lot of populations we made invisible, visible.”3 Three aspects stand out. The first is how poorly essential workers are rewarded for their efforts; the second is the inadequate worker safetynet system; and the third is how the already marginalised workers are disproportionately impacted by the pandemic. Alexis Okeowo, a staff writer at the New Yorker in a piece on how Covid-19 has impacted on sex workers, quotes a club dancer commenting that in her line of work the word “independent” is built into the job description. The most telling comment of the dancer was that the club was not going to take care of the dancers. They were left to fend for themselves. To top it all, most essential workers have not been offered additional pay to compensate for the added risk of remaining on duty. A significant number of contributors have addressed these issues in their writing. John Austin, a senior fellow at the Metropolitan Policy Programme, notes how, in many hard-hit states, the pandemic-induced recession has trashed programmes for workers’ economic security and career advancement and how these have been long overdue for a modernisation, having failed to provide security even before the pandemic, in an economy defined by technological disruptions, fastevolving skill demands, and changing work regimens.4 The social lockdown has already

THOUGHT LEADERSHIP deeply affected workers living payday to payday, many of whom do not have a durable salary and whose work may not enable them to work from home. This group is wide and diverse. It includes dancers at clubs across towns, whose work necessitates being physically close to strangers: talking to them, consoling them and entertaining them, and who find themselves now, like hundreds of thousands of other workers, facing not only a drop in employment but also discrimination and stigma as they search for relief. One particularly at-risk group of workers consists of those in alternative work arrangements, or “non-traditional workers”. Ryan Nunn, policy director, and Jimmy O’Donnell, senior research assistant, both involved in the “Hamilton Project” note, that this category of workers is significant – accounting for over 15-million workers or 10% of the US workforce – including independent contractors, on-call workers, workers from temporary help agencies, and workers provided by contract firms. 5 What these workers have in common, they argue, is that they are in some way removed from the employer that ultimately purchases their services, whether because they are self-employed, employed by an intermediary, or employed only on an as-needed basis. In their article, they focus on two important labour market disadvantages observed for non-traditional workers: more volatile hours and less health insurance coverage. As they discuss in their article, many non-traditional workers already live in precarious economic existences that are now thrown into disarray by the ongoing pandemic. Nun and O’Connell argue that a better understanding of their labour market experiences can support the development of public policy that improves worker outcomes. Some policy options they propose for doing so include expanding labour protections to non-traditional workers, addressing worker misclassification, and providing access to crucial benefits (for example, health insurance, retirement plans, etc.) through mechanisms like portable benefits. Many academics surprisingly too find themselves in this cohort: more than 70% of academics at universities in Australia are casuals. To make matters worse, not only are they losing work but are also ineligible for JobKeeper payment benefits.6 The authors of an article published in the Conservation note that casual and contract academics are most vulnerable to imminent job losses. By mid-2018, an estimated 94 500 people were employed at Australian universities on a casual basis, primarily in teaching

The Covid-19 pandemic is not just a health crisis; it is an environmental justice crisis. only roles. At the University of Wollongong, for instance, they note that around 75% of staff are in insecure work – a figure that includes both teaching and administrative workers. And yet by March, the university had failed to ensure wage support for casual staff needing to self-isolate for any reason. Nunn and O’Donnell note that while all workers need transparency around expectations and pay, this is particularly important for casual staff, whose immediate and long-term work prospects are under threat despite having often spent years in universities building expertise. Although casual academics are on temporary contracts, some have been working for universities longer than their colleagues on continuing contracts. To make matters worse, breaks in an academic career or a lack of visibility – which could result from working from home, not holding a current contract or a lack of recent publications – can irrevocably damage future job prospects for any academic. A large part of the problem originates with the loss of middle-wage jobs and an increase in low-wage jobs. As Mejean and Escobari note in their piece, since the 1970s, low-wage jobs as a percent of total employment in the US have increased while middle-wage jobs have declined, in part due to the loss of certain industries and in part a profound lack of consistent education that would allow workers to learn job skills for the future. Many other high-income countries experienced the same dislocation of industries over this period, but their investments in education and employment support helped displaced workers and newcomers to the workforce adapt. Many commentators note that the current safety net that has been in place for decades was never designed to support today’s workplace and employment patterns and needs anyway, especially the gig economy and its reliance on contract work.

THOUGHT LEADERSHIP

The poor quality of low-wage employment leads to a cycle of attrition and replacement that drives the labour market toward a less-than-optimal equilibrium with neither firms nor workers incentivised to invest in the job. This, Mejean and Escobari argue, takes a steep toll on workers’ skills and opportunities for training: low-wage earners have little incentive to spend scarce time and hard-earned money building skills; meanwhile, employers, though frequently lamenting skills gaps, have little incentive to train workers who they expect to leave. The labour market arrives at a “low-skill equilibrium.”

Austin emphasises that by tying workers to their current employer and occupation, it does the opposite of what today’s workers need most: help navigating changes in a labour market defined by constantly shifting skill demands, increasing AI and automation, and the disappearance of whole occupations in a flash, while others emerge just as quickly. In the US, the safety net was built following the Great Depression and World War II. However, this system began to unravel in the 1970s and 1980s as foreign competition and dramatic restructuring stressed manufacturing industries. Under the Reagan administration, federal policymakers started to intentionally dismantle worker safety-net programmes and decentralise their administration to the state and local levels. From 2000 to 2010, economic dislocation spiked, with employment in manufacturing dropping 35% across six US Midwestern states, eliminating 1.6-million jobs. This shift devastated employer-provided benefits and shredded the safety net for workers and their families. Most replacement jobs were in the service sector, which typically offered lower pay, fewer hours, and little or no benefits. Today, pension plans provided through private companies have all but disappeared. To illustrate this point, Austin notes that the number of Fortune 500 firms offering pension plans dropped from nearly 60% in 1998 to 16% in 2015. 7 Still, Austin does acknowledge the benefits of what he calls a “freewheeling labour market” dynamism, which is why he suggests a rethink of how basic health and income/retirement security is provided, as well as how people are reconnected to work and opportunities for career advancement. A system geared to these new realities would include key elements such as healthcare and pension benefits that are portable, universal, tied to individual employees and delinked from full-time work; a simple easy-to-access financial guarantee for workers dislocated by trade or automation to afford upskilling or a postsecondary credential or skill; and unemployment insurance reform, with flexible eligibility requirements so that intermittent workers (those with low and variable wages, part-time workers, and entrepreneurs starting their own small businesses) can access support. A greater part of the problem is driven by the notion that a monetary value can be placed on human life. This is best illustrated by Philip Thomas, a professor of risk management at Bristol University, who suggested in a recent study that “If the coronavirus lockdown leads to a fall in GDP of more than 6.4%, more years of life will be lost due

to recession than will be gained through beating the virus’.8 This line of reasoning presents an awful dilemma: is the trade-off of crippling the economy for decades to save elderly and vulnerable lives worth it? More than one politician has publicly shared a similar view that the cure must not be worse than the disease. It is of course a vital question that governments must deal with. In a study undertaken at Monash University in Australia, researchers tried to assess whether the number of lives saved because of Covid-19 restrictions would be outweighed by the deaths arising from an economic recession. To provide a strong challenge to the status quo of lockdown, the estimates the researchers used for increased deaths from a lockdown-induced recession are at the high end of the likely scale while the estimates for deaths from Covid-19 if the lockdown ends are at the low end. Their analysis suggests that continuing strict restrictions to eradicate Covid-19 is likely to lead to eight times fewer total deaths than an immediate return to life as normal.9 And the cost benefit analysis doesn’t just apply to number of lives lost: in a study done at Melbourne University researchers found that the numbers sceptics use to argue for more rapid relaxation of containment measures on the basis that the lives saved by lockdowns don’t justify the economic costs incurred to do so don’t stack up. Their study found, based on cold calculus of cost-benefit analysis, that a highly pessimistic view of the economic costs of Australia’s shutdown comes to around A$90-billion while the statistical value of lives the shutdown should save, is estimated around A$1.1-trillion. As they concluded – it produces a simple message. The shutdown wins.10 We would do well to remember that this misleading narrative of preserving the economy at all costs is presented every time we wish to act on our conscience. The arms trade cannot be halted because jobs will be lost. Carbon emissions cannot be reduced because jobs will be lost. Now people’s lives cannot be saved because jobs will be lost. Governments have for decades used a threat of recession to bully us into maintaining an economic system that has seen the poor get poorer and the rich get richer, at the expense of the Earth’s support system. In this moment of crisis, the fragilities of a globalised system are exposed, and it is the “essential” people and communities working together that are heading off socioeconomic breakdown. On the bright side, finally, after years of waiting in the wings, Universal Basic Income (UBI) has now entered public discourse. While Covid-19 is no discriminator of people, social marginalisation has put certain categories of people at higher risk than others. As cities and towns across the world are wrestling with the devastating impacts of the coronavirus pandemic, none have been hit harder than low-income and minority communities. As skyrocketing unemployment is predicted to increase poverty rates and widen racial disparities, it is the marginalised communities that find themselves in the crosshairs of Covid-19. Bus drivers and subway workers died from coronavirus at an alarming rate, and transit union leaders are calling for aggressive action to make

THOUGHT LEADERSHIP them safer. Laura Bliss notes that the life of a transit worker in the US was never easy in the first place. Then came the coronavirus. To enable the livelihoods of other essential workers, thousands of bus drivers, track repairers, yard masters, cleaners and others still showed up to their jobs amid the pandemic. But the death toll among the ranks of frontline public transportation workers, who are considered part of the “essential workforce” in most US cities, suggests they are acutely vulnerable to the virus. In New York City, 50 Metropolitan Transit Agency (MTA) workers had died as of 13 April 2020, more than triple the combined mortality rates of the New York City police and fire departments so far.11 In Chicago, Yvette Cabrera reports that African Americans represented 60% of the city’s Covid-19-related deaths, despite only comprising 30% of the city’s population. African Americans in states such as Michigan, Illinois, and Louisiana have also been disproportionately killed by Covid-19 – and early data suggest the disparity could be widest in the South.12 Across the country, she notes, Latinos are also feeling the brunt of the virus, with health experts particularly worried that overcrowded housing, lack of health insurance, and workplace exposure in jobs like agriculture will cause the number of cases to skyrocket. And in the Navajo Nation the numbers are grim as well, with a positive test rate that is nine times that of the rest of Arizona.

Underlying living conditions are mostly to blame: farmworkers toil in unsafe conditions before returning home to overcrowded mobile homes, apartments, and houses where they cannot self-isolate. Residents who live near or work in warehouses in the United States logistics hubs already suffer fragile respiratory health conditions. Environmental justice advocates who work in these communities are not surprised that the hardest hit populations are found in areas that are also overburdened by pollution, poverty and illnesses such as obesity, diabetes and cancer, as well as asthma and cardiovascular disease. Yet, the inequitable ramifications of Covid-19 extend well beyond healthcare. Covid-19 impacts employment, small businesses, and voting.

We would do well to remember that this misleading narrative of preserving the economy at all costs is presented every time we wish to act on our conscience.

The argument made is that it is the most vulnerable and marginalised, including the elderly and incarcerated, have received a disproportionate brunt of the pandemic. So, when governors across the US order residents to stay home during the pandemic, the essential “nonessential” residents are not retreating to safety – they are retreating to toxicity. Fatemeh Shafiei, director of environmental studies at Spelman College, found a preponderance of evidence showing that, from cradle to grave, low-income residents and people of colour are disproportionately exposed to health-threatening environments in their homes, neighbourhoods and workplaces. As these community’s fight for life during the pandemic, they are also fighting for the right to a safe, clean environment. It is unjust, she states, that vulnerable communities do not have access to the protective gear but have access to this virus in disparate forms and they equally have access to toxic pollution in disparate forms. Much of this has to do with the absence of a public safety net. Overall, about 44-million US residents of all races have no health insurance and 38-million are underinsured, according to Columbia University health economist Sherry Glied. Like the club dancer, many millions of working poor, unemployed, and homeless people are left to their own devices with no access to testing for the virus, no access to healthcare, and no relief for the economic fallout that is mounting daily. The fragmented for-profit healthcare system is failing as understaffed and under-equipped hospitals struggle to keep up with the influx of infected patients and healthcare workers are put at extreme risk for lack of personal protective equipment. Many workers also say that they do not feel adequately protected by their employers and are not receiving personal protective equipment beyond gloves and hand sanitiser at that time, so that they had to bring in their own cleaning materials to disinfect trains and work areas.13

THOUGHT LEADERSHIP The marginalised are, of course, not only found in the US: an analysis of UK national health records published in May 2020 showed that black residents and those of Asian descent were at a higher risk of dying from the virus than were white people.14 The World Bank estimates that the pandemic could push about 49-million people into extreme poverty in 2020.15 Almost half of the projected new poor (23-million) will be in subSaharan Africa, with an additional 16-million in South Asia. The measures taken to contain Covid-19 will affect households in many ways, including job loss, loss of remittances, higher prices, rationing of food and other basic goods, and disruptions to healthcare services and education. While the impacts will be felt by most households almost immediately, they will likely be deeper among the poor, who are more vulnerable because of where they live (largely rural with limited access to public health services and dependent on remittances, or in congested informal settlements with no-or-low-quality services); where they work (largely in the informal sector, usually self-employed, and mainly in micro or family enterprises with little or no job security); high dependence on public services, particularly health and education (largely inadequate and overwhelmed health facilities and with school closures comes the end of school feeding schemes as well); and a lack of savings and any form of insurance (largely no personal safety nets).16 In sub-Saharan Africa an individual in the lowest income quintile has only a 4% chance of receiving social assistance from the government in normal times. Covid-19 could help us realise who the real wealth creators are. They are the frontline workers in the caring economy: the nurses and doctors, the shop assistants and delivery drivers, the shelf stackers, the cleaners, the many thousands of volunteers that have come forward to help the health service. Online, they are the people offering free education, performances, exercise classes, financial advice, museum tours, mental health support, the list just goes on. Behind closed doors it is those managing the domestic life: the family members doing their best to keep their children and themselves healthy and happy and sane, the friends joining at a distance via a multitude of platforms.

But the disparities send a clear message: The Covid-19 pandemic is not just a health crisis; it is an environmental justice crisis. Sacoby Wilson summarises as follows: “If we’re going to have a better response to biological disasters or the next climate or technological disaster, we have to understand how racism plays a major role in our policies and how racism and these structural inequalities drive the Haves and Have-Nots. The Haves will get quick access to testing kits. The Haves can follow a stay-athome order and be fine, like someone like me. I am a professor. The Haves who have access to natural spaces and good access to air conditioning and energy efficient homes, good access to healthcare. To address the disparities in Covid-19, we must address our structural inequalities in this country. The first place to start is race and racism.” 17 Mejean and Escobari note that Covid-19 has made explicit the consequences of this less-than-optimal equilibrium and broader worker precarity that is exposing countries to systemic risk. The pandemic is leaving economic disaster in its wake and laying bare a system in need of a reboot. As policymakers turn their focus from public health to the labour market, they can view the crisis as an opportunity to rebuild a more robust and responsive employment system for both workers and companies. They suggest that a robust economic recovery hinges on at least two policy agendas: expanding unemployment insurance to protect workers through this and future shocks, and efficiently facilitating their reemployment. If in doing so, companies and policymakers also raise the skill equilibrium and make work less precarious, the country will emerge more resilient. There is an imperative but also an opportunity to emerge from this economic shock with a more decent (in the proper meaning of the word) labour market – one that assures living wages, safe work environments, a net that catches all, and a springboard that gets people back on their feet. Companies would win here too. But without a clear first-mover advantage, improving the equilibrium demands concerted policy action. We can invest to build a digitally savvy, surefooted workforce for the future, or risk furthering the gap between low-, middle-, and high-wage workers, ultimately missing the opportunity for a more resilient society. It is worthwhile reminding us that even as we debate whether it is safe to reopen the economy, for essential workers it never closed. Each morning, during the apex of the deadliest pandemic in a century, these men and women have been venturing out into the epicentre of disease, to cook and clean, deliver food, and carry mail, drive buses and stock shelves, patrol the streets and tend to the ill. Many have paid with their health – some with their lives.18 John Cassidy argues that one of the few consolations of the pandemic is the possibility that it could lead to some progressive changes in the economy and politics. Every day of the unfolding crisis is an argument for universal healthcare, competent government, and better treatment for members of the working class – such as nurses, transit workers, supermarket clerks, and employees at food-processing plants – whose enormous contribution to society has been brought into plain view. Cassidy points to encouraging signs for progressives, such as the rapid moves in Congress to expand paid sick leave, raise the level of unemployment benefits, and provide financial support for small businesses.19 As noted by the International Labour Organisation, “The creation of green jobs is one of the green economy strategies intended to improve social well-being and equity, while significantly reducing environmental risks and ecological scarcities.”20 Building back better must be better for everyone: due recognition of the “essentials” must form a keystone of the Economic Reconstruction and Recovery Plan.

THOUGHT LEADERSHIP

We can invest to build a digitally savvy, surefooted workforce for the future, or risk furthering the gap between low-, middle-, and high-wage workers, ultimately missing the opportunity for a more resilient society.

REFERENCES 1 Mejean, M. and Escobari, M. 2020. “Our employment system has failed low wage workers. How can we rebuild?” . Downloaded: Thursday, 30 April 2020 . Downloaded: Sunday, 03 May 2020 2 Wright, R. 2020. “Is America’s ‘One Nation Indivisible’ being killed off by the coronavirus?” . Downloaded: 08 May 2020 3 Bagley, K. 2020. “Connecting the dots between environmental injustice and the coronavirus.” . Downloaded: Saturday, 02 May 2020 4 Austin, J. 2020. “American workers’ safety net is broken. The Covid-19 crisis is a chance to fix it.” . 5 Nunn, R. and O’Donnell, J. 2020. “Unpredictable and uninsured: the challenging labor market experiences of nontraditional workers.” Downloaded: Saturday, 09 May 2020 6 Harris, J., Smithers, K., and Spina, N. 2020. “More than 70% of academics at some universities are casuals. They’re losing work and are cut out of JobKeeper.” Available from: . Downloaded: Monday, 18 May 2020 7 Ibid. . Downloaded: Thursday, 09 April 2020 8 Aponte, M. 2020. “No more business as usual – rethinking economic value for a post-COVID world.” . Downloaded: 18 May, 2020. 9 Bailey, N. 2020. “The calculus of death shows the Covid lockdown is clearly worth the cost.” The Conversation, May 8, 2020. 10 Holden, R., and Preston, B. 2020. “The costs of the shutdown are overestimated – they’re outweighed by uts $1 trillion benefit.” The Conversation, 16 May, 2020. Available from: . Downloaded: 18 May, 2020 . Downloaded: Wednesday, 15 April 2020 11 Bliss, L. 2020. “Hit hard by Covid-19, transit workers call for shutdowns.” . Downloaded: Wednesday, 13 May 2020 12 Cabrera, Y. 2020. “Coronavirus is not just a health crisis – it’s an environmental justice crisis.” . Downloaded: Wednesday, 15 April 2020 13 Bliss, L. 2020. “Hit hard by Covid-19, transit workers call ofr shutdowns.” . Downloaded: Wednesday, 20 May 2020 14 Subbaraman, N. 2020. “How to address the coronavirus’s outsized toll on people of colour.” . Downloaded: Wednesday, 29 April 2020 15 Sánchez-Páramo, C. 2020. “Covid-19 will hit the poor hardest. Here’s what we can do about it.” 16 Ibid. . Downloaded: 08 May 2020 17 Bagley, K. 2020. “Connecting the dots between environmental injustice and the coronavirus.” . Downloaded: Saturday, 02 May 2020 18 Khullar, D. 2020. “The essential workers filling New York’s coronavirus wards.” . Downloaded: Sunday, 03 May 2020 19 Cassidy, J. 2020. “Will the coronavirus create a more progressive society or a more dystopian one?” 20 ILO 2015. Gender equality and green jobs. Geneva: International Labour Organisation.

ENERGY

PPAs shining a new

LIGHT ON SOLAR

With South African businesses feeling the worldwide pressure to reduce their carbon emissions and attain their sustainability goals, the demand for solar energy continues to soar especially with power purchase agreements being a hot topic of discussion. BY SOLARAFRICA

solar power purchase agreement (PPA) is a great alternative to owning a solar system. It is the best solution for businesses wanting to adopt solar without having to pay any upfront Capex where the benefits of performance guarantees, insurance, maintenance and the operation of the system are taken care of. A PPA is a simple agreement that is signed between the business owner and the solar services provider, it includes the installation of a solar system at no cost and removes the challenges of having to insure, maintain, monitor, operate and clean the system for years to come. You pay for the energy you use, just as you would pay Eskom or your local municipality, however, the solar tariff (kWh rate) billed is cheaper than the national grid, providing a significant amount of energy savings each month and over the lifetime of the agreement. As PPAs become an increasingly popular choice for businesses in South Africa, property owners must ask the right questions and understand the major differences when comparing solar proposals. According to SolarAfrica’s sales director Michael Zorich, one of the major concerns is that customers are not educated enough on the topic, when it comes to understanding and comparing the finer details of solar energy contracts. “For instance, the term ‘No Take, No Pay’ means that you only pay for the energy you consume. Therefore, it is important that your solar system is sized according to how much energy your business consumes and not how much energy the system can produce,” says Zorich. When a solar system has been sized according to energy production, the number of “non-operational” business days, such as weekends and annual holiday shutdown periods, are not taken into consideration, which means that you do not use all the energy the system has produced, resulting in lower savings. It is one thing to propose monthly savings but to be able to deliver those savings consistently based on on-site consumption is where the “rubber hits the road”. “We conduct a full technical review and log data to determine each property’s consumption ensuring our solar systems are accurately designed to provide the highest customer savings. At the end of the day, it is not always about having the cheapest solar tariff but rather about who carries the consumption risk,” says Zorich.

While the typical length of a PPA is around 20 years, business owners still have the option to purchase the solar system from year five onwards, providing the choice of ownership at any time during the remaining 15-year period of the agreement. Many exit options are available should a business owner wish to end the agreement sooner due to the sale of the building. Flexible clauses including the option to cede the agreement to a new owner or to transfer the solar system to new premises form part of most PPAs. The possibility of a fire, hail or a lightning storm is often overlooked until the solar panels are broken and the system is out of operation. A PPA allows business owners to have the peace of mind that the solar system on their roof is always monitored and insured accordingly so that any damage caused to the solar system is fully covered. “Capex-free solar has changed the renewable energy landscape and the way businesses are approaching their corporate sustainability initiatives. With zero cost on a company’s bottom line and the over-arching goal of being a more sustainable organisation, a PPA is a stress-free solution that provides long-term savings with the biggest advantage being reduced electricity costs from day one,” concludes Zorich.

As PPAs become an increasingly popular choice for businesses in South Africa, property owners must ask the right questions and understand the major differences when comparing solar proposals.

Blue Valley Mall, 749.5kWp, grid-tied rooftop with 1 013 tons of CO2 saved.

ENVIRONMENT

SOLVED

ENVIRONMENT MINING | WATER INFRASTRUCTURE | ENERGY

www.srk.co.za

ENVIRONMENT

Development must build resilience

COLLECTIVE INNOVATION The impacts of climate change place vulnerable communities at risk and could undermine community resilience to contextual stressors. Economic development needs to embrace strategies that strengthen this resilience rather than inadvertently eroding it. BY SRK CONSULTING

isl Pullinger and Insiya Salam, consultants at SRK, highlighted the impact of the “triple crisis” on communities’ capacity and capability to deal with external shocks and stresses in a recent SRK workshop on climate change. “Even where people manage to escape poverty, progress is often temporary,” Pullinger shared. “Economic shocks, conflict, food insecurity and climate change can push them back into poverty.” She noted that communities and ecosystems were having to adapt to climate change, but it was too soon to say whether this would happen quickly enough or whether the global community would be able to slow down the progress of climate change within manageable limits. At the same time, extreme weather events, biodiversity loss and water insecurity disproportionally affect people who are already vulnerable due to poverty or conflict. “It is vital that we recognise the interaction of these factors,” she said. “Focusing on climate challenges, but not considering the socio-economic or political context of the communities whose lives and livelihoods depend on the local environment, will fail to deliver positive outcomes.” Salam explained how the Sustainable Livelihoods Framework is used to understand people’s or communities’ access to and control over different types of livelihood assets – such as natural, human, financial, social and physical capital. “This framework helps to develop an understanding of the ‘vulnerability context’ – from there we can analyse how people operate within an environment shaped by shocks, trends and seasonality.” An external shock can be either physical or economic and is generally an unexpected event that can directly destroy assets or affect the people, households or communities themselves. Natural shocks include extreme weather events, floods or pandemics like Covid-19. In a similar way, a mining or industrial project can also result in social and/or environmental impacts, either because of land use challenges and/ or the in-migration of people from other areas in search of employment. Vulnerability can be understood as a series of “layers”, Salam clarified, with a core of systemic vulnerability based on political, historical and cultural factors. Climate-related vulnerability due to events like repeated cyclones can add another layer, as can political-social vulnerability caused by armed conflict, for example. In this context, an added layer such as

impacts from mining – resulting, for instance, from resettlement and economic displacement – can therefore be devastating. A livelihood can be classified as sustainable if it is resilient in the face of these shocks and stresses. It also needs to be independent from external support, and able to maintain the long-term productivity of natural resources. A final qualification of a sustainable livelihood is that it does not undermine the livelihood options of others. Sustainable development, generally, as well as specific mining and industrial projects, therefore need to adopt a multi-partner approach that brings together all the important role players to help build community resilience. This includes the community itself, traditional leadership systems, local private companies, and government at local, regional and national level, as well as the international community.

A livelihood can be classified as sustainable if it is resilient in the face of shocks and stresses. “Building resilience needs to include strategies like increased access to and control over community capital assets,” said Pullinger. “It should also focus on disseminating and strengthening community knowledge systems, as well as strengthening community infrastructure.” Successful adaptation strategies – the longer-term responses by households to adverse events, cycles and trends – make them less prone to crisis over time and improve their capacity to resist shocks. An integrated approach to the triple crisis that combines community-based adaptation and ecosystems-based approaches to adaptation is required. “These two approaches evolved separately, largely from developmental and environmental groups respectively, but both aim to increase the ability of vulnerable people to adapt to climate change and build climate resilience,” concluded Salam.

INFRASTRUCTURE

The need for

PRIVATE SECTOR INVESTMENT into

RENEWABLE ENERGY With debt and the climate crisis taking its toll across Africa, the case for private finance to help build a more sustainable energy market could not be stronger in this time of reimagining a stronger continent post Covid-19. BY VUYO NTOI*

frica’s power infrastructure financing shortfall has been calculated at between US$40-billion to US$45-billion per annum by the United Nations, and this deficit is expected to grow alongside a rapidly urbanising and increasingly digitising young population. With the continent’s population forecast to double by 2050, energy demand will increase at an even faster rate – more than doubling by 2040, all while over half of the continent still does not have access to electricity. Reducing this deficit is more than just a game of catch up; it will take a committed, concerted effort from a wide range of stakeholders. Public bodies, over the near term at least, will be restricted in their contribution. The fiscal capacities of many African states are being constrained by a Covid-19-induced economic downturn, amidst many pre-existing debt crises and a continent-wide recession – the first in a quarter century. Private sector investment is critical to kickstarting economic revival, particularly in the energy sector. Public institutions will need to shake

the temptation to pick up where they left off, by re-engaging high carbon emitting power plants, to accelerate the recovery. We have been presented with an opportunity to arm ourselves against future shocks by remolding energy generation activity in a manner that is considerate of current and future generations.

The reluctance to concentrate efforts on decentralised power projects opens the market to smaller, more agile independent players.

INFRASTRUCTURE Betting big on renewable energy is essential. Green power sources will drive over half of the continent’s additional grid capacity by 2040 and simultaneously nearly double its contribution to our energy mix, accounting for 40% of all electricity generated. With renewable energy generation potential in the region of 1 475GW, almost equal to 10 times total current electricity generation it is clear in what direction our efforts should be channeled. With increasing pressure on public finances, many of the continent’s national utilities are facing liquidity challenges. This has softened governments’ attitudes to private sector involvement and created an attractive opportunity for off-grid and distributed power generation, with the ability to deliver power to end users at lower costs without the associated costs of distribution and transmission infrastructure. Driving momentum within this space is contingent on an enabling environment, progress towards which we are seeing across many jurisdictions. In South Africa, we are seeing this following President Cyril Ramaphosa’s announcement in June allowing more private generation of electricity. Increasing the limit from the previous 1MW to the announced 100MW is a significant move that will not only serve to make a meaningful impact in reducing the burden on the nation’s electricity supply and encouraging investors – particularly in the renewables sector.

Private sector investment is critical to kickstarting economic revival, particularly in the energy sector. A programmatic development approach is helping to undo some of the major sticking points across the market, which is awash with private capital looking for viable investment options. An expected US$141-billion in private financing will enter the African energy market in the decade to 2028 and a pipeline of bankable projects will be critical to ensuring that capital is directed to renewable energy ventures. Across the continent, eight in 10 infrastructure projects do not get off the ground because of failure at the planning and feasibility stage. Despite the investor appetite, paradoxically, not enough money is being

Both images: Orlando Power Station is a decommissioned coal-fired power station in Soweto.

spent. Blueprints such as South Africa’s Renewable Energy Independent Power Procurement Programme (REIPPP), various scaling solar initiatives and GET FiT offer an insight into what successful public private partnership (PPP) models can achieve. The REIPPP has overseen a reduction in solar and wind energy procurement costs of between 69% and 37% in solar and wind generation respectively, courtesy of technological advancements and competition supported by a continuous pipeline of opportunities and a transparent bidding process with a high degree of regulatory and execution certainty. In Zambia, the GET FiT project, backed by German development bank KfW, will generate electricity at nearly half the cost of grid parity from 120MW solar projects across the country. While that case highlights the significant cost reduction potential, it also speaks to a wider theme. Such projects benefit from the backing of state power purchase agreements (PPA) and lend themselves to greater investor certainty but also larger scale projects. This is the staple of development finance institutions (DFIs) and their dominance in the space has translated to an overreliance on them for power supply, resulting in stunted development in other areas of the sector. For instance, this has inhibited the development of local currency sources of funding and comes replete with foreign currency issues, as with those currently being experienced on some prominent Nigerian IPPs. They can also fall victim to issues around oversupply because of the associated focus on large projects and, in worst case scenarios, be stranded with white elephant assets. The reluctance to concentrate efforts on decentralised power projects opens the market to smaller, more agile independent players. Such entities have exhibited a commitment to building a future-focused energy market and achieving this in the quickest, cheapest way. The benefits of working towards a more sustainable future are evident. UNDP analysis estimates that for low- or middle-income countries spending on infrastructure that focuses on future-focused resiliency, for every US$1 spent there is a US$4 return. The time is now to act on this, and the private sector is well positioned to lead the charge. * Vuyo Ntoi is Joint-MD of African Infrastructure Investment Managers

CONSTRUCTION

CIRCULAR ECONOMY IN CONSTRUCTION

Geopolymers as a low-carbon cement alternative Social and mainstream media are all doom and gloom about mankind’s inability to transition to a low-carbon economy and mitigate the effects of climate change on the planet. Our economic development over the last century has been based on a very linear model of take-make-dispose and the drive now is to embrace the principles of circularity in the hope of a greener and more sustainable future. BY CHRIS WHYTE, AFRICAN CIRCULAR ECONOMY NETWORK (ACEN)

ement as a single sector contributes some 8% of all global emissions contributing to global warming and the built environment is said to contribute 39% of global emissions. The cement industry is doing a huge amount of work currently to reduce the carbon emissions of their product addressing greener alternative fuels for their kilns; harvesting their waste heat; reducing the clinker to cement ratios and deploying CO2 capture and storage technologies. There is another option, and it is not cement. Geopolymer technology offers an alternative, using problematic waste streams like fly ash, blast

furnace slag and selected mine tailing waste and offers engineering advantages over conventional materials. Geopolymer technology is not a new phenomenon globally and in his quest for low-carbon alternatives the author has engaged with American and European scientist developing geopolymer materials. However, South Africa has one of the foremost material science engineers pioneering its development in Cyril Attwell from Arc Innovations in Gauteng. One cubic metre of concrete has a carbon footprint of 350kg of CO2, making this staple material in the construction industry one of the biggest

CONSTRUCTION

Construction of the wind turbine bases at Khobab Wind Farm. contributors to greenhouse gases in the world. Attwell is one ardent scientist looking to turn concrete’s bad rap around, exploring ways to take the material from grey to green. The development, commercialisation, and ultimately the use of hybrid cement technology provides for a far more sustainable and environmentally responsible process with the potential to replace traditional and widely used cement. Hybrids are a type of inorganic polymer that can be formed at room temperature by using industrial waste or by-products as source materials to form a solid binder that looks like and performs a similar function to normal cement. Hybrid binders can be used in applications to replace cement fully or partially with important environmental, technical, and notably, cost benefits – including an 80-90% reduction in CO2 emissions and improved resistance to fire and aggressive chemicals. Hybrid cement is made from aluminium and silicon, instead of calcium and silicon. The sources of aluminium in nature are not present as carbonates and therefore, when made active for use as cement, do not release vast quantities of CO2. By marrying this knowledge of construction and construction materials with innovative concrete technology, there is a viable alternative in a changing environment that is competitively priced and has significantly lower impact on the environment than the traditional, price-sensitive and commoditised products currently available. While in continual development, the application of geopolymers is currently available at a commercial scale and has proven itself in multiple infrastructure projects across the country since 2006 and won several awards in recognition of its contributions to emission and cost reductions while meeting or exceeding engineering requirements. Many would be familiar with the project applications, but perhaps not aware of the role of geopolymers in their success. • The Gautrain project used ARC technology to significantly reduce the originally estimated cement content of 344 000 tons to 210 000 tons with the replacement of pulverised fuel ash (PFA). • The 32-storey Portside Tower in Cape Town is the largest alkaliactivated concrete structure in the world and the first building in South Africa using up to 85% cement replacement with slag. This delivered significant savings in cost while achieving high durability co-efficient for chloride and oxygen permeability indexes. This application assisted Portside in achieving a 5-Star Green Star rating with GBCSA. • 102 Rivonia in Sandton (2013) is first skyscraper in South Africa with cement replacement with PFA in excess of 38%. Most of the concrete batched on site utilised cement replacement values of 64% cement with PFA with significant increases in durability, strength and aesthetics achieved. 4-Star Green Star Rating with GBCSA. • At the Loeriesfontein Wind Farm (2015), standard concrete uses up to 95% cement replacement with a reduction in carbon footprint of concrete (more than 70%). This is the first high-fatigue structure in the world constructed with 100% cement replacement.

• The Majuba Power Station ash dam changed stabilisation layers to reduce carbon footprints by 85%, reduction of costs by 34% using waste and by-products within 10kms of the project to replace 90% of the cement (reuse of waste and by-products into product of approximately 350 000t). • New Denmark Coal Mine is the first application of affordable mine support in a coal mine using long-line technology. A reduction of 80% carbon footprint was realised by using by-products and wastes with a cost reduction of approximately 40%, making mine support for coal mines feasible. • Kangnas and Perdekraal East Wind Farm’s foundations used a 70% replacement of cement.

102 Rivonia in Sandton.

CONSTRUCTION • At the Khobab Wind Farm, a four-star eco-product label has been awarded for the low-cement concrete used to build the wind turbine bases achieved by substituting cement with ground granulated blast furnace slag (GGBFS) or fly ash from the steel works at Saldanha Bay. The average carbon footprint on the bases at the Khobab Wind Farm was 90.7kg.CO2/m³. The average carbon footprint for a standard 30MPa readymix concrete base is from 290 to 340kg.CO2/m³. Eco Standard also commended the use of recycled water in this application in the water scarce region. These projects represent a fraction of infrastructure in South Africa and the uptake of geopolymers has been slow while the country landfills hundreds of millions of tons of ash and slag to the detriment of the environment. The problem is an absence of national standards covering the use of geopolymers, and consulting engineers are reluctant to sign off on projects using materials that do not meet current national standards because of the high risk involved if the material fails.

One cubic metre of concrete has a carbon footprint of 350kg of CO2, making this staple material in the construction industry one of the biggest contributors to greenhouse gases in the world.

While we wait for standards to be adopted, this does not mean there is no more that can be done in South Africa. The opportunity for substitution of ingredients to make concrete, rather than cement/clinker, are where gains can be made. Here, cement replacement is becoming more common. This provides massive carbon offsets, significant cost benefits, options for using recycled water, landfill diversion benefits of problematic waste streams and associated negative environmental impacts, improved resistance to fire and aggressive chemicals, and a host of other benefits. We need to make changes to national standards, material specifications, as well as procurement and supply chain policies to drive the uptake of

The Portside Tower in Cape Town.

Loeriesfontein Wind Farm is the first high-fatigue structure in the world that will be constructed with 100% cement replacement. alternative low-carbon alternatives to meet this country’s international obligations to driving a low-carbon economy through the Paris Climate Agreement and UNFCCC. The fact that South Africa has world-leading scientists in these fields means that we should be leading the race.

70 years of building together. In the last 70 years, the Swartland Group has become one of the largest suppliers of quality products to the building industry.

and development drive continuous improvement and our exciting expansion into new categories.

Our national distribution footprint comprises two Swartland and seven SBS depots, and more than 42 000m² of warehouse space, situated in all major centres in South Africa.

Our customer promise ‘Experience Quality’ is not just a slogan. It’s our commitment to holding ourselves to the highest standards, and to ensuring that every experience with us is a quality one.

Our class-leading products include wood and aluminium windows and doors, PAR timber, skirtings, ﬁnishes, manufactured products, cornices, garage doors and automation, and most recently, XPS insulation board.

Quality doesn’t only apply to our products, it’s infused in every facet of our business, from our admin staff to our service teams.

Staying at the forefront of technology, design, and production efﬁciency, our ongoing research

We encourage our people to look past their computer, their production lines and know that they’re part of a greater mission to deliver quality to the homes of millions of South Africans.

CERTIFIED

www.summitxps.co.za

www.swartland.co.za

www.hydrodoors.co.za

CONSTRUCTION

EXPERIENCE QUALITY Kenzo Aluminium windows and doors, made by Swartland, are the first choice of architects, contractors and householders. There are good reasons for that: Kenzo aluminium is strong and lightweight, needs little maintenance and offers optimum durability, energy-efficiency and affordability.

rucially, Kenzo Aluminium products are made to the same exacting standards as Swartland’s hardwood windows and doors, so customers can expect manufacturing excellence, lasting quality and value. Kenzo Aluminum offers options for a green envelope that cuts the cost of heating and cooling your home or office. It is available in standard or customised sizes, and Swartland has a team of in-house architects to advise on specifications and design.

Swartland’s team operates nationally to advise construction professionals on all aspects of using the product, from placing an order to installation on-site. Kenzo offers after-sales service and a three-year product guarantee. John Lamb, category manager for Kenzo at Swartland says, “The range includes top-hung windows, horizontal sliding windows, doors and sliding-doors, fold-aside doors and shower doors, as well as aluminium entrance doors, which are proving especially popular.”

CONSTRUCTION Aesthetic appeal is a major aspect of this, he adds: “A good-looking front door is essential for the first impression of your home. It speaks volumes about what lies beyond, so it’s important to select one that compliments your home’s architectural and interior style. “While you might assume that aluminium doors tend toward contemporary styling, doors in the Kenzo range are available in styles that complement modern and traditional architectural design. They can be used in diverse roles, including front doors, balcony doors, office doors and even internal doors. They can also be customised with toplights (glass panels at the top) or sidelights (glass on the sides).” But your choice should not only be about aesthetics. Functionality has a role and here too, Kenzo is the obvious choice, as Lamb explains: • Strength: Aluminium, a composite material, is strong, yet lightweight, so an aluminium front door can feature larger glazing elements to admit maximum light, without compromising on strength. These doors are more robust than those made from other materials, providing greater security. All Swartland products are SANS 613 certified. • D urability: Aluminium won’t contract or expand, so your front door won’t warp or crack, no matter the climate. Aluminium is also naturally resistant to corrosion, ideal for coastal areas. • E ase of maintenance: Aluminium doors and windows need minimum maintenance, saving you time and money over the long term. They have a durable and aesthetically pleasing powder-coated finish, available in silver, bronze, charcoal or white powder-coating. To maintain the finish, simply wipe down the frame with a damp cloth occasionally: no sanding or painting, ever. • E ase of installation: Kenzo’s wet-lug system offer a major advantage for contractors, a boon for contractors working to a tight deadline. • A ffordability: Aluminium doors are comparatively inexpensive, largely due to the wide availability of the material, and the fact that it’s easily recycled. • Comfort: There is a global shift in the built environment towards intelligent buildings, designed to control indoor comfort levels using passive methods that reduce energy consumption save money and minimise the impact of human settlement on the environment. Kenzo gives customers the option of double-glazing their doors and windows. This maintains an appropriate indoor climate by controlling the transfer of heat between the building’s interior and exterior. Lamb says, “While the Kenzo brand was established in 2014, Swartland has manufactured wooden windows and doors since 1951, and carries its ethos of ‘Experience quality’ through to its diversification into manufacturing aluminum as well. It’s what the building industry has come to expect from Swartland.”

INFRASTRUCTURE

STREET SMART The CSIR Smart Places initiative is about smarter resource, infrastructure, and service environments directed towards enabling competitive production and sustainable economic growth. BY LLEWELLYN VAN WYK, B. ARCH; MSC. (APPLIED), URBAN ANALYST

mart Places can exist as special economic zones, agri-parks and municipalities as well as the national linkages between them (as envisaged in the National Infrastructure Plan), and large areas such as prioritised in the Oceans Economy. A successful Smart Place will deliver significant service productivity and quality improvements and opportunities for the local economy thereby securing and enhancing the desirability of the place as an investment destination. Six of the Industry 4.0 technologies are expected to have the greatest transformative impact on Smart Places, such as Artificial Intelligence that assists with the management of resources, environmental impact and compliance, and the Internet of Things – networks of low-cost sensors for data collection, monitoring and decision-making ensuring superior connected resources monitoring and enabling services.

INDUSTRY IMPORTANCE Well-functioning infrastructure and an efficient built environment are crucial to socio-economic development and poverty alleviation. Smart Places are important as they act as a proven enabler that allows industries to have wider economic impact and reach. The Manufacturing Circle, in collaboration with the dti (now dtic) and other industry associations prioritised a number of interventions to stimulate GDP growth and create jobs: “Many manufacturers face concerns relating to the availability of technical and industry-specific skills, slow productivity growth, high input costs, the variable local availability of certain inputs, lack of investment, high electricity costs, poor infrastructure and heavy regulatory burdens. These all reduce the competitiveness of many firms in the sector.”

INFRASTRUCTURE Interventions proposed include measures to reduce input cost for manufacturers; options to invest in catalytic infrastructure projects, such as a new pipeline to bring natural gas from Mozambique into South Africa, using South African steel and pipe, to lower the cost of natural gas; and supporting municipalities with the capacity to deliver and maintain infrastructure, as these are in the first line of service delivery. While infrastructure alone will not lead directly to best-in-class manufacturing, steadily decaying infrastructure will negatively impact a nation’s manufacturing competitiveness and create serious obstacles for related supply chain networks (WEF 2018). This challenge needs to be urgently addressed to ensure sustainable growth in the future. Climate change and resource use trade-offs are also impacting on industrial activity in South Africa. From this perspective, the two priorities

While infrastructure alone will not lead directly to best-in-class manufacturing, or steadily decaying infrastructure will negatively impact a nation’s manufacturing competitiveness.

The Diagnostic Report The NPC initiated a diagnostic analysis to identify and examine key challenges and obstacles that impact the socioeconomic development of South Africa. The deliberations were compiled into a report, now known as the Diagnostic Report.

are to create sustainable economic opportunities derived from the country’s natural resource endowment and to reduce the risk of misinformed decisions on natural resource and environment-related issues. Smart Places impact on industries that are resource intensive and that produce physical goods, such as mining, agriculture and manufacturing.

NEGATIVE NODES The National Development Plan, the Diagnostic Report and SAICE Infrastructure Report Card 2017 found that complications with South African infrastructure exist in the areas of health, water and sanitation, as well as secondary and tertiary roads. These problems are due to several factors, including insufficient funding for infrastructure assets, a shortage of skilled resources and a lack of appropriate technological solutions for planning, materials, design, construction and maintenance.

The Dube TradePort SEZ is known as Africa’s global manufacturing and air logistics platform.

A 3D vision of Dube City at the SEZ.

An artist’s impression of the industry area at the Musina-Makhado SEZ in Limpopo.

STRATEGIC STYLE

The agri-zone at the Dube TradePort SEZ. Resources - Availability of resources for climate change and land use - Resource use conflicts and trade-offs - Finite skills and infrastructure to be used sustainably Hard infrastructure - Inadequate ICT and specialised analytics in Africa - Unreliability and cost of infrastructure hinders industrialisation - Quality of the infrastructure and the challenge of maintenance - Ageing infrastructure non-performance - New infrastructure backlogs Soft infrastructure - Limited capacity for infrastructural optimisation and maintenance - Policy restrictions hinder implementation of Smart Places - Stakeholder support is obstructed by high costs Services/utilities - Environmental factors affect industries, communities and workers - Incapable logistic processes - High cost of services - Municipalities are not fully functional

The Smart Places value chain consists of the resources (input resources and natural environment); connected with infrastructures (built environment); and delivered as associated services (utilities). Strategic response across the value chain - Leverage ICT infrastructure to catalyse Industry 4.0 - Allow access to resources that enhance economic development - Introduce new long-term industries that enable skilled job creation and stimulate economic growth - Enhance circular economies and green technology to support sustainable resource utilisation and local economic growth - Focus on sustainable solutions that connect industries to improve efficiencies and infrastructure performance

Figure 1: Generic resource and built environment value chain

FORETOLD FUTURE A successful Smart Place delivers significant service productivity and quality improvements as well as opportunities for the local economy thereby securing and enhancing the desirability of the place as an investment destination. It has enough available water, energy and land available to achieve aspirational industrial growth.

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EMERGING TRENDS Several trends have emerged globally that make places more attractive for conducting business. The response to these trends is location specific: - Technology improves socio-economic well-being and transforms public services - Circular economies that support a regenerative system where waste is minimised through operational and technological advancements - Greater management of scarce resources - Smarter infrastructure developments Resources - Technology and smarter ways of doing business - Green technology and materials Hard infrastructure - Smarter resource, infrastructure and service developments - Micro-grids for energy, water and other utilities - Connected infrastructure to ensure innovation and efficiencies - Transforming Africa’s infrastructure landscape - Advanced building technologies - Smart materials Soft infrastructure - Connected institutions leveraging each other’s data - Community-owned and operated utilities (micro-grids) - Flat organisational structures - Human capital development Services/utilities - Real-time remote monitoring and decision support - Automation of maintenance

REFERENCES 1 Manufacturing Circle, “Map-to-a-Million: Map to a million new jobs in a decade”, 2017. 2 Presidential Infrastructure Coordinating Commission, National Infrastructure Plan, 2012. 3 the dti, Industrial Policy Action Plan 2018/19 – 2020/21, 2018. 4 World Economic Forum, Readiness for the Future of Production Report 2018, 2018.

ESG STRATEGY

From manufacturers to end-consumers, our society is looking more closely at the whole supply chain to see whether ethical and other standards are being maintained.

No sector unaffected by

GROWING ESG DEMANDS In a world facing challenges that range from climate change to social inequality, every business sector will experience rising demands on its environmental, social and governance (ESG) performance. BY SRK CONSULTING

“T

he rise of ESG confirms SRK’s approach that good engineering is a holistic and complex process that must address a myriad of risks through the integrated application of relevant disciplines,” says Vis Reddy. “This applies to every stage in the economic value chain.” “The financial sector is being subjected to mandatory ESG disclosure requirements in many jurisdictions and is responding quickly to stakeholder interest in ESG investment,” says Darryll Kilian, SRK partner and principal environmental consultant. Mining should take account of the greater ESG focus required by financiers and other stakeholders.

“The importance of ESG issues has grown steadily in recent decades – building momentum from concerns around environmental and human rights, which are now front-of-mind for consumers and governments alike,” says Vis Reddy, managing director of SRK Consulting. “It is now clear that no project can succeed without prioritising ESG factors from its early stages.” Reddy notes that SRK Consulting has been a pioneer in evolving its professional services to meet a range of sustainability hurdles – and had recently re-branded its environmental business unit to focus on ESG.

Vis Reddy

ESG STRATEGY “Consideration of ESG at the earliest stages of planning, from exploration onwards, is now recognised as added value to mining projects. Mineral resource and reserve reporting codes are being updated to recognise this,” attests Kilian. “However, the urgency to address ESG in the planning of projects goes well beyond the mining sector.” SRK Consulting has increasingly seen ESG risks affecting projects related to water, infrastructure and energy.

The Equator Principles The Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. The framework is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.

SOCIAL ASPECTS Director of social risk and stakeholder relations management, Vassie Maharaj, highlights projects in every sector now require effective engagement processes for meaningful stakeholder participation and shared value: “The evolving global ESG framework places social aspects at the centre of the project lifecycle – requiring decision-makers to take account of issues such as gender, human rights, vulnerability and livelihoods in development planning and implementation.” SRK’s ESG offerings focus the expertise and experience of several professionals on advising clients to integrate these requirements into their operations and systems, according to Franciska Lake, principal environmental scientist at SRK Consulting. “There has been an important shift to strengthen the link between licencing and the engineering design requirements, which aligns with SRK’s standard integrated approach to projects,” she notes.

BROADER PRESSURE Reddy argues that the sustainability requirements of large financiers had once been the prime drivers of ESG, but that this pressure is now coming through at many points in the supply chain. “From manufacturers to endconsumers, our society is looking more closely at the whole supply chain to see whether ethical and other standards are being maintained,” he says. In a recent example of this, the RE-SOURCING initiative is working to ensure that the European Union sources its minerals responsibly and sustainably. Funded by the European Union’s Horizon 2020 research and innovation programme, the RE-SOURCING project has involved SRK

greeneconomy.tv

Vassie Maharaj, Franciska Lake and Darryll Kilian from SRK Consulting. Consulting to help facilitate the necessary input from affected stakeholders in Africa and Asia. Kilian points out that companies across the continent are expected to make more ESG progress on issues such as disclosure, integration and inclusivity as well as health, safety and climate change. Aside from the lender requirements, this impetus is also being driven by international sustainability frameworks such as the UN Sustainable Development Goals and AU Agenda 2063, which are in turn influencing national legislation.

WATCH VIDEO: THE ESG AGENDA IN BUSINESS

Vis Reddy, MD of SRK Consulting, and Gordon Brown, Green Economy Journal publisher, discuss environmental, social and governance (ESG). “We no longer work in a vacuum. Everything is connected,” says Reddy. “There is a responsibility for businesses these days to understand the integrated nature of impact.” Industry is continually adapting to new ESG legislation and the evolving inter-national paradigm on sustainable development, first captured by the 1992 Rio Declaration and now represented by the 2015 Sustainable Development Goals. ESG legislation in most countries has become more complex and will continue advancing, aligning with national challenges and international vision.

Delivering value to the miningvalue industry Delivering to the mining industry

At Veolia, we understand the need for efficiencies, cost-effectiveness and most importantly safety in mining operations. We aim to offer water, waste and energy solutions that not only positively impact the bottom line, but are environment. At Veolia, wesustainable understandand thegood need for for the efficiencies, cost-effectiveness and most importantly safety in mining operations. www.veolia.co.za We aim to offer water, waste and energy solutions that not only positively impact the bottom info.southafrica@veolia.com line, but are sustainable and good for the environment. +27 11 663 3600 www.veolia.co.za info.southafrica@veolia.com +27 11 663 3600

WATER

COST VERSUS BENEFIT:

A delicate balance

Calls for sustainable mining have grown louder over the last few years, with most mining operations under severe pressure to improve methods and lessen their environmental impact. So, where exactly does one begin?

aintaining a license to operate, while ensuring effective sustainability measures are in place, requires a delicate balance of cost versus benefit – where the benefit of improved processes today far outweighs the cost of tomorrow’s remediation. A starting point, through alignment with the sustainable development goals (SDGs), means mining companies are being called to: • Produce less waste • Improve safety processes • Implement sustainable technologies • Contribute to community wellbeing • Curb pollution • Be more environmentally conscious Veolia, through proven expertise and key technologies, offers value to the mining industry through: • Responsible water management • Resource recovery • Waste management • Industrial cleaning • Energy efficiency As water-intensive operations, responsible water management in a mine is key in cost containment. Veolia’s approach examines the total wastewater strategy and offers tailored solutions that enable long-term sustainable benefits for the operations. As water scarcity becomes a reality, Veolia’s solutions are aimed at preserving this natural resource, finding alternative solutions, as well as implementing recycling technologies. Veolia’s approach to a mining client will start with a water audit on the site. In this way, we can make sound recommendations regarding the management of all the water resources, process and wastewater. We address the risks associated with water management and produce a strategy to mitigate these risks by upgrading facilities on site or through the introduction of new technologies that supplement existing infrastructure. Since water management is not the core business of a mining operation, Veolia offers highly advanced operations and maintenance expertise to assist clients with guaranteed compliance in all forms of the water cycle. Such a contract ensures that operations can continue without the threat of any water-related issues having an impact on production. Veolia has more than 350 proprietary technologies and has grown its portfolio of digital tools to assist in consistent and continued water management control. Our Hubgrade™ is a combination of digital tools and expertise that make water processes smarter, safer and more sustainable. With the scarcity of natural resources becoming increasingly evident, the efficient management of water, energy and raw materials is vital. The implementation of Hubgrade™ allows for customised and real-time monitoring, which allows customers to save on costs and reduce consumption.

Veolia’s innovative technologies addresses the management of water for communities and industrial customers in the: • production of drinking water and industrial process water (including production of ultrapure water, seawater desalination and treatment of new pollutants) • treatment and recycling of wastewater of all kinds, including the treatment and recovery of waste (organic matter, salts, metals, complex molecules and energy) using innovative solutions to produce reagents, green energy, fertilisers and even bioplastics We proudly boast outstanding operations and maintenance expertise as well as around-the-clock support, both onsite and offsite. For Veolia, ecological transformation means working to radically change patterns of production and consumption through our various solutions. This is done in such a way to ensure sustainability as well as a positive impact on the environment for all stakeholders. Thus Veolia, operating at high levels of health and safety, can assist mining operations with reconciling production and environmental outputs through costeffective but sustainable solutions in the water, waste and energy sectors. This will ensure not only mine operations longevity but also reduce the risk of severe penalties and even possible closures.

WATER

Applying a CIRCULAR ECONOMY to South Africa’s water use The water crisis is only a constraint if we continue to manage it as a finite stock and in a linear economy. The Green Economy Journal speaks to Benoît Le Roy, CEO of the SA Water Chamber, about managing water, which is infinitely renewable, as a circular economy. GEJ: Please begin by explaining the problem case from a macro perspective for how we handle the water resource in South Africa presently, highlighting the structural and regulatory problems as you see them. BLR: Currently South Africa, like most countries, manages water in a linear fashion mostly, where we capture, abstract, treat and distribute to users and then dispose through the wastewater systems. We have realised as a human race that our resources are finite, and in a rapid growing population we are creating stress on these finite resources. Although critical for life

and economic activity, water has been largely relegated as a low priority, not only in South Africa but globally. The South African water reserve was deemed as 98% allocated in 2002 when the population count was 46-million, which has increased to an estimated 60-million in 2021. When we add the vagaries of climate change there is no doubt that our water reserve is over allocated, although many are trying to state the opposite. Whichever way we look at our water balance, it has gone from scare to critical. Water is a fundamental human right and economic enabler or disabler

WATER (when water security is not clear). South Africa is water insecure, and this is well-purported in the NDP’s National Water Security Framework. We cannot therefore make any progress in our SDGs, poverty alleviation or provide jobs for all sustainably. South Africa’s considerable water harnessing and inter-basin transfer system is a world marvel. It was driven by mining operations over a century ago and remains our main water resource. Due to our unique conditions, most of our return-flows after usage from mining to energy and cities are used by downstream agriculture, industry and cities. This makes our water cycle circular and unique in its scale for such a large country, both in population and surface area. We should now increase our circularity by increased decentralisation at point of consumption without negatively affecting downstream users. We have had a nationalised water resource since 1998, with government as the sole custodian of water and owner of the major dams, transmission infrastructure and water boards. The government is also the only arbiter of bulk water prices and is the quality and policy custodian while being the regulator in these spaces but not at a local government level. This makes our water institutional and regulatory environments ill-structured for today’s needs and has led to serious water insecurity. The major drives required to instil water security are: 1. Reduce water losses that are currently at 41% on a national average basis in the municipal distribution systems. 2. Reuse sewage for various purposes at standards of quality and prices that are suitable for municipal level. 3. Increase new water resources through desalination of acid mine drainage inland and sea water in the coastal municipalities. This clearly shows that all the action is at local government level now, which is the least capacitated in technical, human, commercial and financial resources. If you were the Minister of Water and Sanitation in South Africa, what would be the most important changes you would implement, and why? The only action required from the Water and Sanitation Minister is to address the three above-mentioned points by developing policy that: 1. Enables local government to manage their water losses and to enforce return-flows legislation that prevents the current catastrophic pollution of our water reserve. 2. Transfers the entire water regulatory functions, including water-use licence management, blue, green and no-drop functions as well as compliance enforcement, to an independent water regulator. This will ensure the sustainable and regulatory certainty that infrastructure investors and funders require as a minimum. Once these are done, we can attract major private funding as the fiscus is not able to inject the trillion rand or more required for our Benoît Le Roy is an environmental alchemist, with forty years of water, waste and energy engineering experience. He is the CEO and co-founder of the South African Water Chamber that was established to represent the private water infrastructure sector to assist government with implementing the national water and sanitation masterplan. This will not only reindustrialise the water sector, but it will also provide a myriad of skilled jobs and the opportunity to again export water-related products and expertise globally.

water infrastructure over the next decade. The private sector has the capacity to engender bankable water infrastructure, where low-carbon footprints with circular technology are further injected into our water security journey. What would be the potential gains from such changes – to what extent would our picture change in terms of scarcity and abundance of water? This approach would harness the best capabilities from the public and private sectors and unlock the plethora of circular technologies used globally but that are currently unbankable in South Africa. Why should South Africa’s water sector remain unbankable? The SA Water Chamber and other supply chain stakeholders are developing an industrialisation masterplan to reinvigorate the depressed water sector so that we can reinstate our exports and generate significant industrial activity while having national water security.

We have realised as a human race that our resources are finite, and in a rapid growing population we are creating stress on these finite resources. From your current position and perspective what would you advise large municipalities and water users to do to advance towards a more circular economy approach to their own water? Large water users, such as Eskom and the mines, have had circular water management cycles in place for over two decades due to operating in water-scarce environments and adopting best practice. The only mining water issue is the acid mine drainage (AMD), which is a legacy issue from closed and abandoned mines where the latter are legally required to be resolved by government – and are mostly not. There are solutions that are economically attractive in this space once regulatory and policy certainty has improved. Municipalities are the largest polluters of our water resources. Ironically, sewage has valuable resources such as water, chemicals and energy that can be recovered with well-established technology. In the 1960s, South Africa developed the first ever direct sewage-to-potable water-reuse in Namibia, which is still the global flag ship. Two other South African towns, Beaufort West and Ballito also reuse sewage directly into their potable water systems, although energy and chemicals are not yet recovered and will further enhance the bankability of this circular approach. The other circular potential is to desalinate saline waters so that the water can be used for all purposes and the brine either returned to its source, in the case of the sea, and beneficiated inland with AMD, which is saline. We are the world leaders in recovering 99% of the water from the brine. This brine has value, such as gypsum for construction materials and other trace elements that, through selective extraction technologies currently being developed in South Africa, can be sold across the globe. Desalination has the potential to decouple our coastal economies completely from rainfall in perfectly circular approaches that will instil the water security we require to prosper.

SPECIAL REPORT

THE ROAD TO AN

ELECTRIC FUTURE Almost one-third of value addition within the domestic manufacturing sector is derived either directly or indirectly from vehicle assembly and automotive component manufacturing activity, positioning the industry and its broader value chain as a key player within SA’s industrialisation landscape.

An excerpt from the Auto Green Paper on the advancement of new energy vehicles in South Africa by the Department of Trade, Industry and Competition: THE SOUTH AFRICAN ROAD TO PRODUCTION OF ELECTRIC VEHICLES (THE ROADMAP): delivering for the people, for the planet and for our prosperity.

outh Africa has invested in an automotive manu-facturing base with strong government support and ongoing re-investment by global original equipment manufacturers [OEMs] worldwide as well as robust collaborative partnership with local components manufacturers and labour. The shift from internal combustion engine [ICE] vehicles to New Energy Vehicles [NEVs] is a disruptive trend globally, and SA will be impacted directly by this evolution. The automotive sector developed the South African Automotive Masterplan with the vision of becoming a transformed industry that contributes to the sustainable development of SA’s productive economy. Seven focus areas support this vision: • local market optimisation • regional market development • localisation • automotive infrastructure development • industry transformation • technology and associated skills development • institutionalising the masterplan

GROWING TRENDS Global NEV sales increased in 2020, rising by 43% to 3.24-million units compared to 2.26-million units sold in 2019, despite the pandemic. Europe has superseded China as the centre of NEV growth. The forecast is for NEV sales to exceed passenger car ICE sales by 2038 worldwide. The milestone may be reached sooner depending on regulation across the world, the impact of technological changes on prices and shifting consumer buying patterns. Of significance to the export-oriented South African automotive industry, is the forecast that 40% of new vehicles sales in Europe will be EVs by 2030 and 80% by 2040. Policies are being refined in many countries for greater adoption of NEVs as a sustainable mobility solution. Utilities, NEV manufacturers, operators and technology providers are working towards developing smart charging infrastructure to meet customer needs of security and convenience. Various countries continue to announce their intentions to ban the sales of new ICE vehicles from as early as 2025, such as Norway. The UK announced in late 2020 that they plan to bring forward the ban of sales of traditional petrol and diesel cars to 2030, five years earlier than

SPECIAL REPORT previously planned. The South African electromobility discussion needs to be fast-tracked.

CREATING A FERTILE BUSINESS ENVIRONMENT Concerns about air quality, energy security and greenhouse gas coupled with increasingly stringent emissions regulations and changing trends in car ownership and urbanisation, have added impetus to the industry’s commitment to produce low emission vehicles. This has resulted in solutions that include hybrid and plug-in hybrid EVs, as well as the introduction of zero-emission tailpipes such as battery EVs and hydrogen fuel cell EVs. SA’s electromobility regulatory framework needs to have a longterm plan which transforms the public infrastructure, automotive manufacturing and retail, and mining sectors. Importantly, the longoverdue Clean Fuels roadmap from the current Euro 2 should still be pursued with urgency to offer high-technology fuel efficient vehicles to the domestic market. Benefits include less harmful emissions, cleaner air, lower fuel consumption and a valuable effect on the balance of payments over time. Port and rail logistical cost structures require urgent reforms to reduce prices and improve efficiencies and reliability. An investment and tax system that helps build a resilient raw material supply chain will support SA’s efforts. SA needs to retain preferential trade access with major trading partners to foster innovation. The domestic automotive industry cannot ignore EVs if it wants to continue doing business with Europe. In 2019, most internal combustion engine vehicles and related automotive components exports were to the European Union: • Vehicles: 197 355 out of 271 288 exports (72.8%) • Components: R26.3-billion out of R54.5-billion exports (48.2%) • R105-billion out of a total export value of R175.7-billion (59.8%)

THE COST OF DOING NOTHING The industry’s future is strongly tied to how it can embrace new technologies, particularly EV production. Climate-change imperatives will increase regulatory pressures and consumer demand for EVs. The cost of doing nothing will impact on export volumes and earnings, jobs, output and contribution to GDP. EV sales in SA comprised 92 units (0.02%) of total 380 206 vehicles sold in the domestic market in 2020, down from 154 units in 2019. Hybrid vehicle sales accounted for 232 units in 2020.The petrol and diesel fuel vehicles collectively make up 90% of the overall South African vehicle market. The electric, plug-in and traditional hybrid have been below the 1% mark for the past 10 years, with 4 892 of the 5 694 860 aggregated market sales since 2011 to date.

KEY POLICY INSTRUMENTS The current charging infrastructure in the domestic market must be expanded to incentivise motorists to switch to EVs. The private sector should enable such development on commercial terms. Government has provided a common standards platform through the work of SA Bureau of Standards. The full value of carbon-reduction can only be achieved in tandem with a shift in the country’s energy-mix: an increased proportion of renewable energy in the national grid will ensure that the electricity used to charge vehicles does not negate the positive effects on the environment of the EV technologies. While the principle of a technology agnostic framework has been set out, it is recognised that innovation may provide market-driven advantages to technologies, requiring a revised policy approach.

EV sales in SA comprised 92 units (0.02%) of total 380 206 vehicles sold in the domestic market in 2020. Technological development will change the price gap between EVs and internal combustion engines. Green hydrogen technologies can play to the country’s strengths and provide potentially significant demand for its raw materials. Efforts by the private sector to pilot with such technologies will be encouraged. As the green hydrogen technologies mature, they are expected to become the technology-of-choice across the world. The value-proposition for SA needs to be clearly established in the form of additional jobs, stimulation of local industrial capabilities and expansion of production for new markets. Where changes are required to existing technologies, appropriate “just transition” arrangements will be needed.

TAX REFORMS Industry has set out a compelling business case to present before the National Treasury to stimulate greater domestic demand for vehicles in SA, by reducing the Ad Valorem duty and to address the fringe benefits on vehicles for employees of automotive companies. Government has noted the need to synchronise such reforms with active localisation of production.

LOCAL MANUFACTURING A focus area for policy discussion is whether to further incentivise only fully-electric vehicles or to extend these to other forms of NEVs, such as hybrids. Nascent EV production and value chain development policy should consider that there will initially be a cost premium to OEMs in SA, based on the higher component import costs needed for assembly. A fundamental step is the identification of a set of unique EV component technologies that are currently not feasible for localisation. These components would apply to both passenger car and light commercial vehicle segments. A stringent mapping exercise needs to be undertaken to verify that these components cannot be localised by any existing or new SA-based supplier, at requisite standard and costs. The duty rebate mechanism must be monitored and balanced to ensure that assembly and localisation objectives are delivered so that neither is adversely impacted by overweighting the other. SA has many of the materials and structures in place to build EVs, but this will require new skills, and these skills need to be taught at tertiary education institutions.

CONCLUSION The future of SA’s automotive industry lies in large-scale vehicle production and component exports. The domestic automotive industry must think differently in the way it perceives the electric evolution. Exporting remains key to generate sufficient economies of scale and achieving improved international competitiveness. SA must accelerate its EV transformation if it does not want to lose its major export markets and revenue and face significant job losses at plant level, as well as a substantial drop in the automotive industry’s GDP contribution (currently at 4.9%).

TOURISM

TOURISM BEARS THE BRUNT While most industries have had their share of the Covid-19 shockwave, tourism has taken the brunt of the economic impact so far with its enterprises in distress – many facing the possibility of permanent closures.

Source: kearney.com

or an industry that depends solely on human mobility, and given the pervasive spread of the virus, it is no surprise that lockdowns and social distancing restrictions have taken a heavy toll. Being discretionary in nature, tourism is more volatile than other sectors, and has historically suffered more from strategic shocks such as the 2008 financial crisis (see figure 1). All segments – hotels, airlines, cruises, restaurants, and tour operators – have taken a strong hit. Many of the large global events that tourism thrives on, such as the Tokyo Olympics and the Cannes Film Festival are being cancelled or postponed.

In response to the pandemic, the South African Department of Tourism, working with the industry, developed a Tourism Recovery Plan that outlines a set of interventions to ignite the recovery of the sector and place it on a path to long-term sustainability. The recovery plan is aligned to the Economic Reconstruction and Recovery Plan (ERRP), which identifies priority interventions to drive the reconstruction of the South African economy. The interventions also outline the sector’s contribution to the following priorities of the ERRP: infrastructure, mass public employment, the green economy or sustainability mediations and the inclusion of women and youth, as well as skills development. The Plan identifies specific enablers as well as the activities linked to them, their timeframes for implementation and the lines of accountability. Successful implementation will in part, depend on a set of enablers beyond the immediate mandate of the Department and the tourism industry. “We anticipate that the interventions outlined in the Tourism Sector Recovery Plan will facilitate the preservation of R189-billion of value and recover the tourism sector to its 2019 output and employment levels by 2023. It will position the sector for longterm sustainable growth,” says Minister of Tourism, Mmamoloko Kubayi-Ngubane. The Figure 1. The tourism sector has historically been more exposed to strategic shocks than other sectors. Department of Tourism and its marketing entity, South African Tourism, will lead, coordinate and support the implementation of the Plan through the reprioritisation of current resource allocation.

Source: kearney.com

BIG LOSSES SHORT TERM

Figure 2. Global tourist arrivals could decline by 78%.

Worldwide, it is likely that tourist arrivals will drop by between 58% and 78%, leaving them at their lowest levels after eight years of steady growth and cutting international tourism receipts by up to $1.175-billion (see figures 2 and 3). Up to 75-million jobs could be at risk, according to the World Travel and Tourism Council (WTTC), with small- and medium-sized businesses making up 80% of the sector – most affected.

TOURISM

Source: kearney.com

Figure 3. The decline in tourist arrivals could translate to a loss of $874-billion to $1 175-billion in international tourism receipts.

Source: kearney.com

In South Africa, the overall number of travellers (arrivals and departures) decreased by 71% between 2019 and 2020 and by 50.7% over a 15-year period from nearly 24.6-million travellers recorded in 2006 to 12.1-million in 2020. Official ACSA passenger data shows that passenger recovery at the international terminal of the Cape Town International Airport in December 2020 was a mere 19% of December 2019 volumes. Aircraft were operating at only 51% of their passenger load factors (compared to 72% in December 2019). This partially explains why the hotel industry, which is highly dependent on international travellers, has still not recovered. STR (2021), who provide market data on the hotel industry, reports hotel occupancy levels in the Western Cape were at 32.7% in December 2020, compared to 68.1% in December 2019. In Cape Town, 5-star hotel occupancy levels were at 29% in December 2020, 4-star hotel accommodation at 34% and 3-star hotel occupancy at 31%. Similar results were reported for the Garden Route and the Cape Winelands. In terms of domestic travel, vehicle counts nationally indicate that there was a reduction in the number of overland domestic travellers during the season. Traffic volumes have decreased by up to 27% on South Africa’s major highways. The same trend was seen at our airports. The domestic terminal at Cape Town International Airport saw only 51% of the volume of travellers compared with December 2019. On a more positive note, aircraft had average passenger load factors of 72% which reiterates the importance of domestic travel in the current climate. With the announcement of hotspots and beach closures in 2020, coastal towns saw immediate cancellations from domestic markets.

A survey by NightsBridge, conducted after the announcement of the Garden Route as a Covid-19 hotspot, found that one-third of guesthouses on the area indicated 50% of festive season cancellations and 12.7% of bookings in the Western Cape were cancelled.

A BUMPY BUT CERTAIN RECOVERY The current unfolding of events does not seem encouraging with major airlines going bankrupt, small tourism businesses closing and discretionary spending decreasing. The industry might need to witness some structural changes in the short and medium terms (for example, renationalisation of airlines, incentives to promote travel and tourism, price hikes to recuperate losses) as it moves toward the longer-term stage where demand for travel returns to normal. Despite this bleak short-term outlook, the long-term recovery is certain, anchored by the vitality of the sector to the global economy and its historic resilience in the face of previous pandemics. The tourism sector contributes more than 10% of the world’s GDP ($8.8-trillion in 2018) and accounts for one in 10 jobs (319-million). It has outpaced the global economy in terms of growth and proved resilient in the face of previous economic shocks (see figure 4). This shows us that recovery once the crisis is over is almost certain. One major influence is the projected growth of a global middle class. According to the European Commission, this is expected to be in the region of 5.3-billion people by 2030, when middle class spending will have jumped to $64-trillion, compared with $37-trillion in 2017, accounting for a third of GDP growth.

Figure 4. The tourism sector has shown strong resilience even in the face of the previous global pandemics.

TOURISM

Source: kearney.com

Figure 5. A staged approach will ensure a resilient emergence of tourism.

A GUIDE FOR GOVERNMENT ACTION Based on Kearney Consulting’s knowledge of the tourism sector, understanding of previous periods of recovery following earlier crises, and an analysis of current efforts around the globe, the company suggests the following phased approach for governments as countries continue the battle against Covid-19 (see figure 5). STAGE ONE: REACT While the crisis continues, make sure mitigating steps are in place Include tourism in recovery planning Include tourism in overall national disaster planning and prepare for recovery by setting up dedicated bodies to manage activity. Singapore, France, Greece, and Canada have all developed tourism recovery task forces. Provide stimulus and relief packages Lending a lifeline to tourism businesses is one of the most immediate and crucial actions to prevent the sector’s collapse. This can come in various formats (see figure 6). Cash injections ranging between 0.2% and more than 10% of the total stimulus package, representing millions (or billions) of dollars, have already been dedicated to the industry in various countries (see figure 7). These amounts are equivalent to between roughly 5% and 15% of the loss in international tourism receipts for some emerging destinations such as Hong Kong, Malaysia, and Singapore.

Ensure tourist safety A critcal priority is protecting tourists. Japan has a 24-hour visitor hotline, and Mexico’s Guest Assist app connects tourists with local authorities. Another measure is deep-cleaning establishments and testing employees, which Jordan has begun doing at its Dead Sea resorts. Communicate effectively Proactive and reactive engagement with the media will be needed to prevent misinformation, and to provide reliable information about the situation in each country and the actions being taken to tackle the crisis. This is typically being managed by government central communications units and should include regular media briefings, press conferences, and Q&A sessions, along with updates on the government’s response. In Singapore, the Prime Minister is briefing the population directly every couple of weeks, as is President Ramaphosa in South Africa. In the UK, government press conferences have been made available on YouTube as well as its own website to give the latest statistics and measures being taken to mitigate risks. Dedicated health emergency news sources are also important to keep citizens informed. The Australian Department of Health has created a webpage which gives daily updates on the spread of the virus, as well as details of its Emergency Response Plan and support available for those

Source: kearney.com

Figure 6. Various types of financial relief measures for the tourism sector are being used by countries.

Source: kearney.com

TOURISM

Figure 7. Hundreds of millions (even billions) of dollars are being dedicated to the tourism sector.

An immediate measure identified in the South African Tourism Recovery Plan to protect the supply-side capacity of the sector is transformation via a Tourism Equity Fund. One of the five pillars of this strategy focuses on transformation, rural and township tourism development, enterprise development and investment. As a combination of grant funding, concessionary loans and debt finance, the fund will cater to the specific needs of black-owned businesses to acquire equity, invest in new developments or expand existing ones.

in immediate need. Singapore has also launched a public awareness campaign, using cartoons to communicate safety procedures to people of all ages, and is giving key updates via WhatsApp. The South African government has devoted a special Covid-19 section on their website with daily updates on the virus count. The site provides information on our alert system, information for households, travel, work, vaccines as well as other resources. STAGE TWO: RECOVER Get the industry back on its feet Recalibrate the plan New travel behaviour will emerge after the pandemic has been suppressed, based on which destinations and source markets no longer pose a health risk, travellers’ willingness to take new trips, and their financial ability to do so. Those in the “resilient” category – businesspeople, millennials and seasoned wealthy travellers – are likely to return earlier. As for types of travel, domestic tourism is typically the first to tip back, followed by lower-cost regional trips within areas at a similar level of recovery, and then long-haul journeys (for example, a travel bubble between New Zealand and Australia; a travel bubble between Estonia, Latvia, and Lithuania; and talks of a potential travel bubble between China, Hong Kong, Taiwan, and South Korea). The Indonesian government has identified domestic tourism as vital to countering the impact of Covid-19 on its tourism sector and has set aside millions of dollars to encourage citizens to visit the country. In Australia, the government is planning to launch a $7-million marketing campaign to draw back visitors from Japan, the US and New Zealand. Rebuild tourist confidence Once ready to reopen to visitors, extra safety protocols will be needed to eliminate a new outbreak. This means continuing to monitor the domestic and international situation to make sure inbound journeys do not pose a health risk to their destination. All touchpoints along the tourist journey will need to be safeguarded, for example: • Managing visa procedures online to reduce physical contact • At airports, tracking flights to and from areas of outbreak; putting

social distancing barriers and markings in place; providing mandatory hand sanitiser and personal protective equipment (PPE) to staff and travellers, and carrying out health checks or tests where needed; routine disinfections and deep-cleaning • On aircraft, allocating seating in accordance with social distancing regulations; reducing in-flight services; installing high-efficiency particulate air (HEPA) filters; routine deep-cleaning • At accommodations, rules for common areas to meet social distancing regulations; revised standards for food storage, handling, and catering plus ventilation and cleaning Once the measures are in place, destinations should employ effective marketing to let the world know it is safe to visit again. The Indonesian government will spend almost 72-billion rupiah (US$5-million) on a social media influencer campaign to promote its tourist hotspots, while Australia plans to launch multimillion-dollar campaigns targeting its domestic and international tourist markets. Attract new and returning visitors With travel confidence having taken a knock and many countries trying to reignite the industry at the same time, competition to regain lost ground will be fierce. Clever marketing techniques and incentives will be needed to persuade tourists to choose a particular destination. These could include visa changes (such as waiving or relaxing visa requirements and extending permitted stays), announcing new flagship events to attract visitors, or giving people a helping hand where they might appreciate it most – their wallet. Malaysia, for example, plans to offer travel discount vouchers, and income tax relief for domestic tourists. Other incentives could be a reduction in visa fees or vouchers for popular attractions. Identify new opportunities The pandemic has unleashed a huge wave of innovation. In the future, countries might consider acknowledging efforts to fight the disease with landmarks, museums or scientific and educational facilities. Some museums are building coronavirus collections (for example, collecting personal items from citizens with Covid-19 to detail their crisis).

TOURISM

GO BACK TO GO While Covid-19 has undoubtedly changed life – and travel habits – beyond all recognition, the current crisis state will be temporary. Even while the battle against the disease goes on, countries and their governing administrations are looking ahead at what must be done to return society to some semblance of normality. Although the immediate impact to the industry has been bitter, there should be no further radical structural changes needed unless it falls prey to further unforeseeable shocks in quick succession. What is expected is that with careful management, and using a staged approach, governments will be able to move their tourism sectors into recovery, and that they will eventually rebound.

Resume long-term ambitions When the sector is in a healthier state, countries can pursue their longterm tourism ambitions, which may differ from their pre-pandemic state.

Article courtesy: Kearney Consulting

STAGE THREE: REBOUND Resume long-term ambitions, but prepare for future shocks Develop contingency plans New diseases will continue to strike. These have become more frequent in the past few decades and are one of the top risks to human life and society. With tourism bearing the brunt of the impact on industry each time, becoming truly resilient means preparing for future shocks by anticipating risks with solid contingency plans in place. Countries are building these capabilities. In Spain, the national tourism plan was built around major trends that could affect the sector, while Finland launched its own future-facing tourism project several years ago.

THE SA STORY According to Tourism 2020 released by Statistics SA, the direct contribution of the tourism sector to GDP (Gross Domestic Product) was R130.1-billion in 2018 and constituted nearly 3% direct contribution to GDP. In 2018, the tourism sector contributed about 4.5% of total employment in South Africa. In 2020, the volume of tourists decreased by 72.6% from 10.2-million in 2019 to 2.8-million in 2020. The distribution of tourists by region of residence shows that 74.8% of the tourists who arrived in South Africa in 2020 were residents of the SADC countries and 1.5% were from other African countries. These two sub-regions constituted a total of 76.3% tourists from Africa. Residents of overseas countries made up 23.6% of the tourists. On 16 March 2020, President Ramaphosa announced measures to combat the spread of Covid-19 in South Africa. These measures were in line with reducing and monitoring inward as well as departing travellers. Later a travel ban on selected foreign nationals from high-risk countries into South Africa was enforced. Of the 53 land

ports, 35 were shut down, as well as two of the eight seaports. The Level 5 (hard) lockdown introduced by the president in March 2020 resulted in numbers dropping drastically for both incoming and outgoing travellers. South Africa did not receive visitors from April to September 2020. In 2020, tourists from the UK topped the overseas visitor list. When comparing the 2020 volumes with 2019, the number of tourists decreased in all 10 leading overseas countries. Australia had the largest percentage decrease of visitors to South Africa (81.4%). Overall, holiday continued to be the main reason for visits to South Africa. A majority (96%) of tourists came for holidays while businesspersons, students and medical treatment constituted 3.1%, 0.9% and 0.1% respectively of the 2020 tourists. In 2020, tourists from overseas and other African countries spent, on average, seven and five days per month respectively in South Africa, compared to tourists from SADC who spent only two days. Tourists continued to be predominantly male (53.8%).

Source: StatsSA

Number of tourists visiting South Africa in 2019 and 2020.

Tourists visiting South Africa from the top 10 overseas countries in 2020.

Globally, countries are competing to capture the market for remote workers. This is an important market right now, as this type of tourist is more resilient to the challenges that traditional tourism is facing given ongoing travel restrictions. Such tourists will be an important source of sustainable tourism post-pandemic. Announcing his support for a “remote working visa”, Premier Alan Winde says: “Given the severe impact that Covid-19 has had on the tourism sector in South Africa, this innovative visa would be a great contribution to our recovery.” Wesgro is launching a dedicated portal that promotes services for longer-stay options in the Western Cape, following a successful campaign with Airbnb to encourage remote working domestically. Cape Town has made the 2021 list for the 50 Best Cities for Remote Working according to Big 7 Travel.

ENERGY

WIND POWER is amped for

SELF-GENERATION SAWEA welcomes the announcement by President Ramaphosa to lift the threshold for license exemptions to 100MW. This is another indication that SA is well on its way to a decentralised renewable energy generation power system. BY SAWEA

138MW Jeffreys Bay Wind Farm, one of the largest wind farms in South Africa.

t is SAWEA’s understanding that the Department of Mineral Resources and Energy is looking to encourage substantial investment in the energy sector, to support economic growth and diversify the generation sources away from just a single risk entity. “When the amended regulation was issued for public comment, we made strong submissions that the allotted 10MW threshold would be too small a shift to open up this highly regulated sector to the substantial investment that is required. We further submitted that the threshold for license exemptions should be increased to between 50MW and 100MW,” says Ntombifuthi Ntuli, CEO of SAWEA, who added that this announcement means that the industry can now easily enter into power purchase agreements with private entities, especially intensive energy users, and deliver projects quickly. It has been reported that large companies, mines and farms are believed to have 5 000MW in pent-up projects, which could be released if licensing requirements were lifted. “Renewable energy project developers have got a number of projects that have gone through all development phase permitting requirements and are shovel ready, so we can confidently say that there is sufficient capacity in the industry to meet demand from intensive energy users,” said Ntuli, referring to South Africa’s intensive energy users (IEU), which includes mining and industrial enterprises which are estimated to collectively consume about 40% of South Africa’s electrical energy. Independent Power Producers (IPPs) have reported that several mining houses and other IEUs have reached out to the industry enquiring about projects that are ready for procurement. The association sees this as a clear intention to procure clean energy from the sector. By lifting the threshold, it will allow intensive energy users, which makes up a significant portion of the South African GDP, to establish new generation capacity that will in turn stimulate the economy as well as free up the Electricity Availability Factor (EAF). South Africa has been plagued with power shortages for a long time due to demand exceeding available supply capacity. This is despite government’s efforts to implement a number of programmes to try and

close the capacity gap, which include the announcement of preferred bidders for the Risk Mitigation Independent Power Producer Procurement Programme and issuing of the Renewable Energy Independent Power Producer Procurement Programme Round 5 Request for Proposals, as well as announcing future procurement plans.

The energy transition is informed by several drivers including decarbonisation, decentralisation and democratisation.

“Eskom’s EAF has been below recommended levels for an exceptionally long time, as demonstrated by the protracted load shedding that our country has been experiencing for well over a decade now. This indicates an urgent need to procure new generation capacity and by lifting the threshold for self-generation to 100MW, without licencing, we are not only freeing up capacity, but are taking one step further towards a decentralised energy system,” said Ntuli. “The energy transition that the country is going through is multifaceted and informed by several drivers including decarbonisation, decentralisation and democratisation. While decarbonisation has to do with shifting from carbon intensive energy to more clean and green energy technologies, decentralisation means moving away from a centralised single vertically integrated utility to more decentralised generation, through utility-scale IPP projects and small-scale embedded generation projects. This means that energy will be produced closer to where it will be used, rather than at a large plant elsewhere and sent through the national grid,” she concludes.

ENERGY

10 YEARS of CLEAN ENERGY The South African Wind Energy Association and the South African Photovoltaic Industry Association are celebrating 10 years of clean energy this year.

SAPVIA: NEW DECADE, NEW APPROACH SAPVIA this year celebrates 10 years of pushing boundaries in the sector through proactive policy advocacy and lobbying efforts. South Africa’s leading member association for the promotion of solar PV steps into a second decade of success with the election of a new board.

he association has been at the forefront of transforming South Africa’s economy and energy sector. SAPVIA’s growth over the past 10 years reflects the flourishing renewables sector and from just six members a decade ago, the association now boasts 544 members across the solar PV value chain.

“We have come a long way since our formation and as a body we are excited to step into this new chapter with a multitalented team steering us,” says SAPVIA COO, Niveshen Govender. “Our focus for the year ahead is navigating a post-Covid economic recovery that has renewables and solar PV at its heart.”

ENERGY

NEW SAPVIA BOARD 2021 ““The global PV sector is booming. In the last year alone 127GW of solar PV has been added to the grid internationally. The IRP is aiming for solar PV to contribute 10% to our energy mix by 2030, but together we can achieve so much more. This coming year will see distributed generation also play a more prominent role in our energy mix. This is a welcome shift and we fully support the legislation changes that should see jobs created, localisation and industrialisation enhanced as well as alleviating the pressure on Eskom’s constrained supply. SAPVIA has achieved to date 2 000MW private solar generation and South Africa is about to wake up to generous energy from the sun. Welcome to the future.” Wido Schnabel, chairperson

“Solar is a game changer. Not just for the economy but for every household in South Africa. With the right enabling legislation, investment and focus from industry, and of course sunshine, we can power the economic recovery.” Chanda Nxumalo, spokesperson

“SAPVIA’s role continues to be to shine the light on the vast opportunities held by rolling out and growing the solar PV sector in South Africa and the rest of the continent. This, responsibly and with a deep cognisance of the need to attain a just energy transition.” Maloba Tshehla, deputy spokesperson

“Solar energy enables generation co-located at load centres and by utility-scale projects to feed into the grid, allowing generation capacity to be added in a sustainable manner. The cost reductions we have seen in recent years, as well as the advancement of ancillary technologies, has opened exciting opportunities to unlock prosperity for all south African citizens.” Daniel Goldstuck, deputy spokesperson The other Manco members are: Sunette Smith, treasurer, Rainer Nowak, legal representative. Richard Doyle, Frank Spencer, DeVilliers Botha and Norman Moyo are the board members. Outgoing members are Jo-Anne Dean, Boitumelo Kiepile and Vuyo Ntoi.

“This is a dynamic sector and in the last year we have seen significant progress in realising our ambitions for solar PV to be the electricity generation technology of choice in South Africa. Renewable energy in general has taken a leap forward with the implementation of the IRP and this progress is incredibly encouraging, not least due to the announcement of Bid Window 5 and 6, which is helpful in providing investor confidence as well as a sense that the vision is soon to become tangible reality. The RMIPPPP concluded in the first few months of 2021 with 25% awarded to renewable energy, is a great testament to the efficacy of renewable energy, given the challenging requirements of the programme. We were delighted to see the industry step up with innovative bids that overcame the obstacles and showed that renewable energy could compete and win against traditional energy solutions. The government has not rested on its laurels with the REIPPPP and it is fantastic to see the announcement of changes to the licence exemption limits, which will pave the way forward to the development of a more robust commercial and industrial segment. The regulations will also allow municipalities to procure from IPPs, which will result in the creation of a new market segment.” Niveshen Govender, SAPVIA COO

SAPVIA’s role continues to be to shine the light on the vast opportunities held by rolling out and growing the solar PV sector in South Africa and the rest of the continent.

ENERGY

SAWEA: 4-MILLION HOUSEHOLDS POWERED BY WIND The first wind project became operational on 1 February 2014, and since then wind power has contributed 28 000GWh of energy, which is more than half of all renewable energy produced. To date, 27 wind farms have successfully been connected to the national grid, increasing installed wind power capacity to almost 2 500MW.

here are seven more projects currently in final stages of construction, which should bring an additional capacity of 870MW into the grid by end of 2021, thus contributing even further to resolving the power crisis. The impact that the R80.5-billion invested in wind power deployment has made on the South African economy is immeasurable. This investment has created 16 000 job years in the construction phase and will deliver 13 000 job years over a 20-year operational period. 31% of the equity in the wind sector is held by BBBEE shareholders, and through preferential procurement, R24-billion of the spend in the sector has been allocated to BBBEE companies. Furthermore, local communities collectively own 10% of equity in the wind sector, which enables communities to have a direct stake in projects built in their areas and extends their economic benefits beyond socio-economic development. This demonstrates that the sector fully embraces the country’s transformation agenda. The wind sector has been in the forefront of supporting localisation and industrialisation and has spent R20.8-billion on local content to date, which also resulted in the establishment of local tower manufacturing facilities. The biggest lesson from the last decade of wind power is that localisation requires continuous demand and long-term visibility of procurement plans. The stop-start nature of procurement has resulted in disinvestments in the past, with several renewable energy component manufacturers closing shop, including a wind tower manufacturing facility in Gqeberha. Furthermore, wind power investment has had a substantial impact on local communities, with R520-million spent on socio-economic development programmes such as women empowerment, skills and

capacity development, education, social welfare, poverty alleviation as well as social infrastructure. Wind farms are also supporting enterprise development initiatives in the areas they operate in and has to date spent R155-million on such initiatives to develop local businesses. South Africa is a signatory to the Paris Agreement on climate change, and subsequently submitted the Nationally Determined Commitments, which outline a target to limit greenhouse gas emissions. The growth of wind power over the last decade has made a significant contribution towards meeting these commitments. The sector has contributed 28.8 metric tons carbon emission reduction equivalent to date and will continue to contribute even more over the next decades, thus getting the country closer to reaching a net-zero carbon economy by 2050. Wind power not only makes an impact on climate change but has also achieved water savings of over 25-million kilolitres. “The last decade has demonstrated that wind power adds costeffective and reliable capacity to the power grid in record time and is an excellent vehicle for direct infrastructure investment and is a positive multiplier of economic effects, while making a positive impact on the environment. We are proud of wind industry achievements in the past 10 years, and we look forward to contributing even more in the next decade as we install a further 14.4GW of wind power capacity, which will attract an estimated R360-billion to the SA economy” says Ntombifuthi Ntuli, CEO of SAWEA.

The biggest lesson from the last decade of wind power is that localisation requires continuous demand and long-term visibility of procurement plans. Golden Valley Wind Energy Facility.

Green Economy Journal Issue 47

Articles inside

ENERGY

TOURISM

SPECIAL REPORT

ENERGY

WATER

INFRASTRUCTURE

WATER

ESG STRATEGY

CONSTRUCTION

ENERGY

INFRASTRUCTURE

ENVIRONMENT

CONSTRUCTION