The South African Photovoltaic Industry Association (SAPVIA) has welcomed the investment decision by Italian-based firm Enertronica Santerno to expand its manufacturing activities in SA.
SAPVIA is the industry body representing solar PV in South Africa.
The Italian firm, which has been an active player in SA over the past 10 years, will invest up to R17 million to enhance the capability of manufacturing inverters for solar photovoltaic applications, including storage solutions, with a maximum initial production capacity of more than 500MW per year, gradually ramping up to higher capacity targets.
According to SAPVIA, the inverters will achieve a designated local content value higher than 40%, therefore exceeding the minimum requirements for public procurement.
Activities to practically implement the plan are already in place and will be finalised in the next five months.
Embedded generation
The investment comes after the South African government recently made bold moves to boost renewable energy production as power utility Eskom struggles to keep the lights on.
Earlier this month, president Cyril Ramaphosa said SA will be amending Schedule 2 of the Electricity Regulation Act to increase the National Energy Regulator of South Africa licensing threshold for embedded generation projects from 1MW to 100MW.
Ramaphosa said amending the regulation reflects government’s determination to take the necessary action to achieve energy security and reduce the impact of load-shedding on businesses and households across the country.
In his weekly newsletter issued this morning, the president says one of the most important reforms is in the energy sector. “We have begun the process of restructuring Eskom into three different state-owned entities, responsible for generation, transmission and distribution respectively. This is because the previous structure of Eskom was ill-suited for a changing energy landscape. It had become inefficient and costly and was not sufficiently transparent.”
He notes that through the renewable energy independent power producers programme, there has been significant private investment in energy generation.
“With the proposal to raise the licensing exemption for embedded generation – where companies produce electricity for themselves and other commercial users – from 1MW to 100MW, we can expect even more private investment. This is vital at a time when the country is suffering from severe and sustained electricity shortages and where neither Eskom nor the state is able to invest in new generation capacity.”
Welcoming the Enertronica Santerno investment, Niveshen Govender, SAPVIA COO, says: “This significant investment shows the massive potential for the solar PV market here in South Africa. The fact that we are attracting international investors shows the viability of our renewable energy sector, both in terms of financial return as well as the capability of our workforce to deliver best-in-class manufacturing.
“Post-COVID, we will require foreign and local investment to drive the economic recovery and transform our energy infrastructure to meet current and future requirements. This investment will also contribute to South Africa realising the full, transformational potential of its solar PV market.
“Localisation, upskilling and a focus on ensuring true South African participation across the value chain is vital if we are all to benefit from the full rewards of the REIPPPP [Renewable Energy Independent Power Producer Procurement Programme].”
According to Luigi Guerra, country manager of Enertronica Santerno, “the group has already successfully implemented manufacturing activities in SA in various sectors associated with renewable energies.
“In 2013, in fact, a production plant was built (and then successfully dismantled) for the manufacturing of supporting structures for photovoltaic panels which supplied steel works for around 400MW of panels.
“Subsequently, inverter-based power stations for a total capacity of around 600MW were locally built with a 58% local content, making Enertronica Santerno one of the leading local producers in South Africa in its own market sector.”
Govender emphasises: “Government must continue to act in the interest of South Africans, and we await confirmation from the DMRE [Department of Mineral Resources and Energy] and DTIC [Department of Trade, Industry and Competition] that legislation will be implemented to ensure that projects are able to meet the localisation requirements for Bid Window 5 of the REIPPPP.
“We need certainty, sustained procurement, and a consistent approach to developing the local manufacturing market segment.”
Clean investments
According to Govender, SAPVIA will continue to actively engage with its members to ensure they are proactively seeking to attract additional investment, both foreign and local, to drive local manufacturing capabilities, so that they can fully realise the capacity requirements of the South African market, both currently and in future procurement rounds.
This will enable the country to realise the full economic and industrialisation potential of the uptake of renewable energy, he notes.
“Following the extended pause in government procurement of clean, affordable renewable energy generation infrastructure, through the REIPPPPP, we are starting to see confidence growing from industry, who now feel ready to invest in local manufacturing.
“After a period of decline, where investors felt hesitant to move forward with local manufacturing, due to the lack of certainty from government, we are now seeing the green shoots of a South African renewable energy manufacturing sector. With this confidence, we hope to see additional investment, local job creation and, of course, upskilling of local workers.
“We cannot afford to let this opportunity pass and we look forward to working with government to deliver not only our energy needs, through sustained and consistent procurement of renewable energy, but also job creation and sustainable employment through a commitment to localisation.
“SAPVIA welcomes this positive investment from our member, Enertronica Santerno, and we look forward to working with them and supporting their future success in the South African market,” Govender notes.
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