BRIAN KAMANZI: Careful planning needed to ensure workers benefit from transition to green energy

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Most decent work opportunities from renewable energy are derived from localisation of the associated value chains

Wind and solar costs are declining, but fossil fuels are still in demand. Picture: 123RF/VACLAW VOLRAB

The majority of decent work opportunities from renewable energy are recognised internationally as being derived from the localisation of the associated value chains. So far, SA’s renewable energy industry — dominated by the expansion of private wind and solar generation projects implemented under the Renewable Energy Independent Power Producer Programme — has created only 57,236 direct job years . More than 80% of employment derives from construction, temporary and casual work.

Before 2006, the US had decades of comparative advantage in solar PV over China, with public subsidies focused on technology companies across a wide range of cutting edge technologies. However, US manufacturers were unable to mobilise private domestic capital as the economy failed to recover from the 2008 global financial crisis. China capitalised on this by offering cheap debt to US-based manufacturers at state bond rates in exchange for local ownership, and this led to their relocation.

Wind OEMs are protective of the intellectual property of key components and exercise control over machines installed in the field through maintenance contracts. Wind blades, turbine construction and component assembly are low-hanging fruit for value chain localisation. China responded to these trends by implementing import tariffs on wind turbine components and requiring local content requirements as high as 70% to support local industry.

Our policy brief recommends that Sarem propose the following support measures for deep localisation of wind and solar value chains:

 

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