The planet power predicament - Investing in clean energy in 2020
May 15, 2020
Market Intelligence Report,
GreenCape’s 2020 Market Intelligence Reports, produced in partnership with the Western Cape Government’s Department of Economic Development and Tourism, are now available for download online.
Please note: Covid-19 has created unprecedented uncertainty in global markets. While we have attempted to be accurate in the projections of market sizing, there remains a high level of uncertainty. The 2020 Market Intelligence Reports were published and printed in March, before lockdown. It is anticipated that global economic stimulus packages being developed to revitalise the global economy after the acute Covid-19 crisis, would be geared towards technologies of the future, including a strong emphasis on scaling greentech solutions.
The sustainable supply of clean energy to meet growth goals is a global aim. Energy security is fundamental to economic development, and the lack thereof has been acutely felt in the South African context.
On another side of the spectrum of predicaments is the responsibility towards obtaining an energy supply mix that meets the power demand of a country, and in such a way that it demonstrates a commitment to responsible global citizenship.
“In the South African context, there are investment opportunities in the energy space that support the pursuit of the triple bottom line,” said Jack Radmore, GreenCape’s Energy Programme Manager. “The business case for the supply of clean power and sustainable energy services is strong, from a profit, planet and people perspective.”
In response to a growing global outcry and changing demands, energy service providers are broadening their market offerings, and the following investment opportunities have been highlighted in the energy sectors for 2020.
The South African energy services market holds opportunities for equipment suppliers, project developers, technical advisors, and financial investors.
“There are three emerging opportunities for investors in the embedded generation market, namely a) rooftop PV system bundling with standardised contracting models; b) solar PV for energy resellers and c) operations and maintenance-only contracts,” said Reshmi Wolvers, GreenCape Energy Analyst. “Within the energy storage market, there is an emerging opportunity for behind-the-meter battery storage. The energy efficiency market has emerging opportunities related to energy efficiency as a service, and the retrofitting of South Africa’s large stock of existing buildings,” she added.
Download the Energy Services 2020 MIR here.
Utility scale renewable energy
“Accounting for nearly 9% of installed capacity, the South African utility scale renewable energy sector is showing growth and potential with over 3.9 GW of utility scale projects already connected and operational,” said Mandisa Mkhize, GreenCape’s renewable energy sector desk.
The latest Integrated Resource Plan (IRP) 2019 allocations indicate 14 400 MW for wind, 6 000 MW for Solar Photovoltaic (PV) and a minimum of 4 000 MW of small-scale embedded generation (SSEG) to be procured by 2030, which has the potential of attracting in excess of R420 billion in the next 12 years.
Further market opportunities include an increase in local manufacturing potential in South Africa (wind energy (blade and tower) manufacturing, local PV panel manufacturing & local battery manufacturing); Utility scale batteries development and deployment; Municipalities exploring the option to procure directly from IPPs; Renewal and reissuing of Operations and Maintenance contracts of REIPPPP Bid Windows 1-4 projects; Refinancing of REIPPPP Bid Windows 1-4 projects.
Download the Utility Scale Renewable Energy 2020 MIR here.
While South Africa has not yet joined the ranks of countries experiencing a steep rise in electric vehicle (EV) uptake, it is likely that this will change as battery prices continue to fall.
The emerging investment opportunities remain largely in the manufacturing of electric buses, passenger vehicles and lithium ion batteries.
Download the Electric Vehicles 2020 MIR here.
Other green economy Market Intelligence Reports
GreenCape’s annual Market Intelligence Reports (MIRs), developed in partnership with the Western Cape Government’s Department of Economic Development and Tourism, highlight up-to-date investment opportunities in key sectors of the green economy.
The GreenCape 2020 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, Waste and Water. GreenCape also publishes a Sustainable Agriculture MIR in partnership with the Western Cape Department of Agriculture.
GreenCape’s sector desks are in the unique position to gather current insights from businesses active in the green economy, as well as from other key role-players in each of the sectors.
The 2020 MIRs are now available for free online here.