Special Economic Zones could lead the energy transition

Gas, green hydrogen, renewable energy and electrical vehicle component manufacturing are all in the mix as Atlantis SEZ and Saldanha IDZ gear up to attract investors

Both of the Western Cape’s Special Economic Zones (SEZs) have a role to play in the changes that are coming in the field of energy.

The Atlantis Special Economic Zone and the Saldanha Bay Industrial Development Zone each has its own focus but both are based on attracting the private sector to invest by creating well-serviced land with good infrastructure. Both projects form a vital part of the Western Cape Government Economic Recovery Plan.

Saldanha Bay Industrial Development Zone

The Saldanha Bay IDZ helped create 2 000 jobs in the 2021/22 financial year. The IDZ is based on the existing industrial and port activities of Saldanha and the Port of Saldanha Bay, which is the main portal for the export of South Africa’s iron ore. The Saldanha Bay Industrial Development Zone (SBIDZ) is becoming a hub for a range of maritime repair activities and oil rig maintenance and repair.

The Western Cape has been lobbying hard for Saldanha Bay to be a site for a gas-to-power plant for some years. If a gas plant were to be built at Saldanha, then it could be a catalyst for the use of gas in many other sectors such as manufacturing and residential.

However, it could be that another energy source is going to take the place of gas for the SBIDZ. Experts have reported that the Saldanha Bay region has excellent solar and wind resources which could produce large amounts of renewable energy electricity at competitive costs.

Two industrial giants agreed in 2022 to cooperate to find ways to produce sustainable chemicals and fuels, together with “green steel”. A key element for both Sasol and ArcelorMittal SA will the production of so-called “green hydrogen”, namely hydrogen generated via renewable energy sources.

The cooperation of Sasol and ArcelorMittal SA could have massive implications for the Saldanha region, with Sasol following up its agreement with the steel manufacturing with the signing, in the same week in October, of a Memorandum of Understanding with the SBIDZ to work together to establish a green hydrogen hub.

The National Department of Trade, Industry and Competition (dtic) and the provincial government have collectively invested R500-million in core infrastructure, a lease agreement has been signed with Transnet National Ports Authority (TNPA), and a phased approach to development has begun.

The concept of the SBIDZ works well within two broader projects: Operation Phakisa and Project Khulisa, the targeted growth strategy of the Western Cape Provincial Government which includes servicing and repairing of oil rigs as a priority.

Atlantis Special Economic Zone

The scheduling of the Atlantis Special Economic Zone (SEZ) State Owned Company (SOC) Limited as a provincial business enterprise was approved by National Treasury on 15 December 2021.

The ASEZCo is driving sustainable development and job creation by harnessing the opportunities in the growing green economy. The ASEZ Greentech theme aims to attract manufacturers wanting to supply their technologies to independent power producers bidding on the national renewable energy programme, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

One of the first investors in the ASEZ was GRI Towers South Africa, a manufacturer of windturbine towers, a perfect fit for the intention to promote renewable energy and green technology manufacturing sectors.

By early 2022, the zone had attracted more than R790-million in investment, with two investors expanding in the previous 12 months, creating over 400 jobs in the process. Treasury’s approval should spark more activity and the SEZ plans to add an additional three investors in the 2022/23 financial year.

As global demand for electric vehicles increases, so South African manufacturers will start having to import or make compatible components. The ASEZ is positioning itself to be the preferred site for electrical vehicle component manufacturing.

Another element that is being encouraged at ASEZ is resource-efficient cleaner production. The zone subscribes to UNIDO’s Eco-Industrial Park (EIP) principles and four green utility infrastructure goals underpin the management plan: reducing carbon emissions while providing energy security; longterm water security and efficient water use; reduce waste to landfill; working with nature through an indigenous landscaping plan.

Energy policies

The province and the City of Cape Town are lobbying national government for a greater role for municipalities in the generation and distribution of energy. The potential of renewable energy is being realised through the national independent power producer programme.

Investing in resilience

A market intelligence report covering energy, renewable energy, water and waste was created by GreenCape to map the assets and challenges in these areas.

In addition to trying to attract green investment into the province, the province is working for improved regulations related to small-scale embedded generation (SSEG). Cape Town also wants to be able to rent out its infrastructure to a power producer who can supply a user via that infrastructure.

Much of this work is done by a unit called the Sustainability Energy Markets within the Energy Directorate. Another area of focus for this group is to investigate energy use by low-income households.

The Cape Peninsula University of Technology’s Energy Institute is a leader in research in the field of electricity. The South African Renewable Technology Centre (SARETEC) on the Bellville campus of CPUT offers courses such as Wind Turbine Service Technician and Solar Photovoltaic Service Technician and various short courses such as Bolting Joint Technology.

The Centre for Renewable and Sustainable Energy Studies is at the University of Stellenbosch where a new School for Climate Studies has been launched. The University of Cape Town has the Energy Research Centre and the University of the Western Cape is doing research on the possibilities of hydrogen as an energy source. ■