Sector development agency GreenCape has launched the latest Market Intelligence Reports (MIRs) which highlight investment opportunities in key sectors of the green economy.
Developed annually in partnership with the Western Cape Government’s Department of Economic Development and Tourism, the MIRs highlight investment opportunities in the province. The 2021 MIRs include updated investment opportunities and highlight the relevant legislation context and potential market barriers and risks in energy services, utility-scale renewable energy, electric vehicles and water. GreenCape also published a Sustainable Agriculture MIR in partnership with the Western Cape Department of Agriculture and a Waste MIR in partnership with the City of Cape Town.
Have you watched?
Investing in a Green Economic Recovery
Minister David Maynier, Western Cape Minister of Finance and Economic Opportunities said the province offers an abundance of opportunities across a variety of sectors, including the green economy.
“We have been working hard to ensure the province is an attractive destination for investors looking to start or expand their businesses, highlighting the fact that not only are we a beautiful place to visit but we offer world-class infrastructure, a highly-skilled talent pool and an enabling environment for businesses to thrive.
“The annual GreenCape Market Intelligence Reports provide up-to-date insights to help investors understand the emerging opportunities to invest in the green economy, which will ensure we save jobs, rebuild the economy and create an energy secure future in the Western Cape,” explained Maynier.
Market Intelligence Reports provide national insight into investment in energy
While the MIRs focus on highlighting opportunities in the Western Cape, they do include relevant national insight and context.
Energy services are used to describe two key energy market segments in the South African energy space, small-scale embedded generation (which includes rooftop solar PV systems and energy storage) and energy efficiency. These market segments are increasingly bolstered by offerings in the energy finance sector, which in and of themselves present opportunities to financial investors.
The 2021 Energy Services MIR provides potential investors in the small-scale embedded generation (SSEG), energy storage and energy efficiency markets with a greater understanding of market opportunities in South Africa, taking into account the size of the opportunities, the level of risk involved and current barriers.
Have you read?
A snapshot of Africa’s energy and power sector
Argon Poorun, GreenCape energy analyst, said the 2021 energy services MIR unpacks SSEG opportunities pertaining to rooftop PV model diversification for the commercial and industrial sectors, solar power purchase agreements, solar PV for energy resellers and in-house capacity building.
“Behind-the-meter battery storage provides an emerging investment opportunity in the energy storage market, and in the energy efficiency market we elaborate on opportunities for smart metering and demand side management, as well as aggregated interventions for commercial new builds and retrofits,” added Poorun.
Investment into the green economy set to grow as energy regulations expand
The recent Presidential announcement on the lifting of the 1MW to 100MW licence cap represents a significant positive shift in private sector regulatory sentiment, according to Poorun. “I expect that in the coming three years we will see an acceleration in the number of energy users and services provider participating in embedded generation markets such as PV.
“There will also be an increased uptake of large entities with multiple sites seeking access to distributed energy through wheeling,” said Poorun.
Have you read?
Embedded generation threshold to increase to 100MW
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 the more than 1.4GW of rooftop solar PV that is installed on private and public buildings in South Africa.
GreenCape is working on a number of initiatives in the Western Cape aimed at creating an ecosystem of partners that provide support to the green economy in the Western Cape (such as creating a green business support service directory). They are also part of the movement towards establishing a green economy cluster agency in Mpumalanga to drive the growth of a green economy there as moves toward just energy transition changes the make-up of the local energy economy.
Opportunities for the utility-scale renewable energy market do exist in South Africa
The 2021 Utility-Scale Renewable Energy MIR on the other hand is compiled for foreign direct and local investors that want to invest directly in the South African green economy through project development, asset management, equity, debt, equipment manufacture or support services. It highlights market opportunities in the utility-scale renewable energy market in South Africa.
Mandisa Mkhize GreenCape energy and utility desk analyst says chapter 4 of the MIR expands on estimated market size, drivers and barriers: “In the 2021 MIR we highlight the investment opportunities that tap into the continuation of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) based on the Integrated Resource Plan 2019 allocations, increased local manufacturing of renewable energy components and systems, distributed generation and utility-scale battery energy storage development and deployment.
“A big movement in the sector is the announcement of the opening of the REIPPP Bid Window 5. This procurement round presents an opportunity for the industry to re-ignite some of the renewable energy value chain capabilities and investor confidence eroded during the delay periods. It translates into an opportunity of 2 600 MW of new generation capacity, including 1 600 MW from onshore wind energy and 1 000 MW from solar photovoltaic power plants,” she added.
Over 60% of the project developers that have been successful on the REIPPPP rounds are based in Cape Town, and this ecosystem of skills makes the region particularly attractive to the professional skills associated with the renewable energy space.
*Panelists in a session on day three of Enlit Africa digital event reacted to the President’s announcement in the session entitled The realities of incorporating small scale embedded generation into your local distribution network. You can watch the discussion online.
**The full Energy Services Market Intelligence Report and the Utility-Scale Renewable Energy Market Intelligence Report are available online.