Tamasiga, Phemelo; Ma eane, Lebogang
Resea ch Repo
Building Domes ic Capaci y: Localiza ion S a egies o
Sou h A ica’s Renewable Ene gy Sec o
Mega ends Policy B ie , No. 43
Sugges ed Ci a ion: Tamasiga, Phemelo; Ma eane, Lebogang (2025) : Building Domes ic Capaci y:
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o , Mega ends Policy B ie , No. 43,
S i ung Wissenscha und Poli ik (SWP), Be lin,
h ps://doi.o g/10.18449/2025MTA-PB43
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/331329
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Policy B ie 43 NOV 2025
Building Domes ic Capaci y:
Localiza ion S a egies o
Sou h A ica’s Renewable Ene gy
Sec o
Phemelo Tamasiga and Lebogang Ma eane
Sou h A ica’s ene gy ansi ion un olds wi hin a complex landscape o u gen deca boniza ion needs,
pe sis en ene gy insecu i y and global compe i ion o e enewable alue chains. Thus, he cen al
ques ion we ask in his policy b ie is: which localiza ion measu es could s eng hen equi y conside a-
ions in he ene gy ansi ion? Based on in e iews conduc ed wi h s akeholde s in Sou h A ica’s
ene gy and indus ial policy sec o s, and augmen ed by cu en academic li e a u e and policy docu-
men s, his policy b ie inds ha policy and incen i e gaps unde mine domes ic manu ac u ing, job
c ea ion and communi y owne ship in he enewable ene gy sec o . Wi hou a s onge localiza ion
s a egy, he Jus Ene gy T ansi ion Pa ne ship could ail o deli e on i s equi y p omises. Key
ecommenda ions include e o ming public p ocu emen o ewa d local con en and social impac ,
le e aging concessional inance o a ac p i a e in es men in domes ic enewable ene gy
indus ies, es ablishing bila e al pa ne ships o echnology ans e , acili a ing indus ial upg ading
and p omo ing communi y and wo ke -owned enewable ene gy ini ia i es.
Sou h A ica is a a c i ical c oss oads because o a p oposed la ge-scale shi om coal o
enewable ene gy sou ces. This shi will no only de e mine he pace o deca boniza ion in
he Sou h A ican economy bu also de e mine who bene i s om he ansi ion o alue
chains om ca bon-based sou ces o enewables. A c ucial ques ion is whe he Sou h A ica
will ely on impo ed enewable ene gy echnologies o use his oppo uni y o de elop
domes ic indus ies, c ea e subs an ial employmen and p omo e communi y empowe -
men , he eby suppo ing ans o ma i e and equi able income (and e en ual weal h) dis-
ibu ion.
1
These ques ions lie a he cen e o Sou h A ica’s mos con en ious socio-
economic and poli ical deba es.
2
In his policy b ie , localiza ion deno es a s a egic indus-
ial policy app oach o shi demand om impo s owa ds domes ic p oduc ion h ough
1
Luís Fe nández In iago e al., “O e coming Fi e Key Challenges o Make he Ene gy T ansi ion a Jus Labo
T ansi ion,” Na u e Communica ions 16, no. 1 (2025): 7541.
2
Nicholas an Doesbu gh and Ha ald Winkle , “Challenges and Pa hways o Inclusi e Low-Ca bon De elopmen in
Sou h A ica: A Poli ical Se lemen s Analysis,” New Poli ical Economy 30, no. 4 (2025): 590–606.
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o ?
2
ools such as local con en equi emen s, p e e en ial p ocu emen and a ge ed suppo
o local i ms.
3
Suppo e s o apid enewable ene gy deploymen p io i ize expediency and cos -e ec i e-
ness in powe gene a ion, bu his o e looks he ac ha a ans o ma i e ene gy ansi ion
based on localiza ion is likely o be g adual a he han apid. Con e sely, o ganized labou
and domes ic en e p ises ad oca e o subs an ial localiza ion and equi able in eg a ion.
This ension o e di e ing iews on he pace o adjus men in he ene gy ansi ion unde -
sco es he need o policy amewo ks ha explici ly econcile he impe a i es o apid
deca boniza ion, g een indus ializa ion and social equi y, and ha equi e inno a i e
mechanisms o os e domes ic manu ac u ing capabili ies and ensu e b oad-based pa ici-
pa ion.
4
This ansi ion p esen s an unp eceden ed oppo uni y o ede ine Sou h A ica’s
indus ial ajec o y – mo ing beyond a his o y o mine al ex ac ion owa ds g een indus-
ializa ion and a g een economy ancho ed in localized inno a ion and sus ainable p ac-
ices.
5
Acco dingly, his policy b ie explo es how Sou h A ica can balance apid clean
ene gy deploymen wi h indus ial de elopmen . I examines he ene gy ansi ion, localiza-
ion deba es, semi-s uc u ed in e iews om Johannesbu g on indus ial policy, and li e -
a u e on p ocu emen , inance, echnology pa ne ships and communi y owne ship.
Sou h A ica’s push o enewable ene gy is in e wined wi h he objec i es o economic
ans o ma ion and inclusi e indus ializa ion. The Sou h A ican Renewable Ene gy Mas e -
plan (SAREM) se es as he coun y’s indus ializa ion oadmap o he enewable ene gy
sec o .
6
The plan ou lines localiza ion as a delibe a e s a egy o expand domes ic indus ial
ac i i y ac oss enewable ene gy alue chains o inc ease local con en , s imula e manu ac-
u ing and c ea e sus ainable employmen . I includes local con en a ge s o 2030 o 45
pe cen o sola componen s, 47 pe cen o wind and 20 pe cen o s o age and aims o
build local echnological and inno a ion capabili ies h ough in es men in esea ch,
design and skills de elopmen . The SAREM also seeks o b oaden he pa icipa ion o small,
medium and Black-owned en e p ises (wi h 50 pe cen o mo e sha eholding and manage-
men con ol) in enewable ene gy supply chains. Launched in 2011, he Renewable Ene gy
Independen Powe P oduce P ocu emen P og amme (REIPPPP) has played a key ole in
u ning hese goals in o ac ion. I has con ibu ed o building a domes ic enewable ene gy
indus y while p omo ing localiza ion and economic empowe men .
7
Failu e o pu sue
delibe a e localiza ion in Sou h A ica’s ene gy ansi ion could esul in mos ly empo a y
cons uc ion jobs and disp opo iona e bene i s o o eign i ms, lea ing local communi ies
wi h oo ew long- e m gains and wi hou he de elopmen o local indus ial capaci y.
Such a ajec o y will no ensu e communi y owne ship, and isks Sou h A ica’s ene gy
ansi ion alling sho o i s “jus ” ambi ions.
8
The Sou h A ican economy is cha ac e ized by deeply en enched inequali ies, a dual
economy di ided be ween a small high-skill, high-p oduc i i y segmen and a la ge low-
skill, low-p oduc i i y segmen , an in as uc u e de ici and he spa ial and economic lega-
3
Ne a Makge la, Localisa ion and Indus ial Policy: Scopes, Deba es and Ins umen s (TIPS, 14 Augus 2023).
4
Iain Todd and Da en McCauley, “An In e -disciplina y App oach o he Ene gy T ansi ion in Sou h A ica,” Disco e
Sus ainabili y 2, no. 1 (2021): 1–12.
5
Ayodele A. Adebiyi and Ka leho Moloi, “Renewable Ene gy Sou ce U iliza ion P og ess in Sou h A ica: A Re iew,”
Ene gies 17, no. 14 (2024): 1–21.
6
Sou h A ican Renewable Ene gy Mas e plan (SAREM): An Inclusi e Indus ial De elopmen Plan o he Renewable
Ene gy and S o age Value Chains by 2030 (Go e nmen o Sou h A ica, 2 Ap il 2025).
7
NDC Pa ne ship Good P ac ice Da abase, Sou h A ica’s Renewable Ene gy Independen Powe P oduce
P ocu emen P og amme (NDC Pa ne ship, accessed 4 Feb ua y 2025).
8
Iain Todd and Da en McCauley, “Assessing Policy Ba ie s o he Ene gy T ansi ion in Sou h A ica,” Ene gy Policy
158 (2021): 112529.
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o ?
3
cies o apa heid ha c ea ed seg ega ed u ban geog aphies and une en access o eco-
nomic oppo uni y.
9
These ea u es necessi a e a c i ical examina ion o how cu en policy
amewo ks and implemen a ion s a egies add ess he impe a i e o os e ing domes ic
indus ial g ow h, c ea ing equi able employmen oppo uni ies and empowe ing local
communi ies in he bu geoning enewable ene gy sec o .
10
Con e sely, he absence o
obus local con en equi emen s and skills de elopmen p og ammes could exace ba e
exis ing socio-economic dispa i ies, ans o ming he ansi ion in o a eplica ion o colo-
nial esou ce ex ac ion models a he han a genuine pa hway o sus ainable de elop-
men .
11
Poli ical deba es in Sou h A ica o e localiza ion ha e g own inc easingly hea ed. This is
e iden in he desi e, exp essed in pa icula by he uling poli ical pa y, he A ican
Na ional Cong ess (ANC) and in Sou h A ica’s go e nmen s uc u es, o achie e economic
s abili y while ensu ing ene gy secu i y, albei cu en ly mainly based on non- enewables.
12
One camp – including he Depa men o T ade, Indus y and Compe i ion – emphasizes
local con en and job c ea ion, e en i i means a slowe ollou . Fo example, in Ap il 2025,
he Sou h A ican go e nmen loa ed p oposals o aise a i s on impo ed sola , wind and
ba e y componen s, wi h inc eases anging om 5 o 30 pe cen .
13
This mo e e lec s a
clea shi in indus ial policy owa ds localiza ion, aiming o ecalib a e he supply chain in
a ou o Sou h A ican i ms, while c ea ing meaning ul employmen oppo uni ies in he
local enewable ene gy sec o . Howe e , enewable ene gy indus y g oups swi ly wa ned
ha such a i s could aise cos s and slow sola and wind deploymen , as domes ic suppli-
e s canno cu en ly mee demand. A he same ime, poli ical ac o s who a e esis an o
ab up changes in ene gy sou ces ha e seized on hese ea s. Fo example, he Sou h A i-
can Elec ici y and Ene gy Minis e , Kgosien sho Ramokgopa, and hen Elec ici y Minis e ,
Gwede Man ashe, ha e openly cas doub on an ex e nally d i en ene gy ansi ion and
ha e a gued and wa ned ha in e na ional pa ne s a e using Sou h A ica as a “guinea pig”
o he pu poses o examining he ansi ion om ca bon o enewable ene gy sou ces.
14
Why does his localiza ion issue ma e o ex e nal pa ne s o Sou h A ica? Ge many and
he EU ha e commi ed subs an ial inancing o suppo Sou h A ica’s ene gy e o ms and
deca boniza ion e o s.
15
Fo Be lin and B ussels, Sou h A ica may se e as a solid ounda-
ion o he ene gy ansi ion, especially on he A ican con inen . As A ica’s mos indus i-
alized economy, i expo s elec ici y gene a ed mainly om ca bon-in ensi e sou ces o
neighbou ing coun ies. In 2023, Sou h A ica emained he la ges emi e in A ica,
accoun ing o app oxima ely 28 pe cen o he con inen ’s o al ossil- uel CO₂ emissions.
16
In addi ion, Sou h A ica has ad anced banking and inancial sys ems, along wi h a high
9
Sophie Plage son, Leila Pa el, Tessa Hoch eld, and Ma ianne S. Ul iksen, “Social Policy in Sou h A ica: Na iga ing
he Rou e o Social De elopmen ,” Wo ld De elopmen 113 (2019): 1–9.
10
Nqobile Xaba, “Whose Jus Ene gy T ansi ion? A Sou h A ican Pe spec i e,” Wiley In e disciplina y Re iews:
Ene gy and En i onmen 12, no. 5 (2023): 1–5.
11
Pegah Mi zania, Joel A. Go don, Nazmiye Bal a‐Ozkan, Ramazan C. Sayan, and Lochne Ma ais, “Ba ie s o
Powe ing Pas Coal: Implica ions o a Jus Ene gy T ansi ion in Sou h A ica,” Ene gy Resea ch & Social Science 101
(2023): 103122.
12
Phemelo Tamasiga, Wo k o ce T ansi ion in Sou h A ica’s Jus Ene gy T ansi ion, Policy B ie 39 (Mega ends
A ika, 2025).
13
“SA P oposes New Ta i s on Renewable Ene gy Componen s,” F eigh News, 30 Ap il 2025.
14
Thabo Makwakwa, “T ump’s Ene gy S un Dilemma o SA,” Sunday Independen (Independen Online), 17
No embe 2024.
15
“P ojec in o ma ion: Jus Ene gy T ansi ion Pa ne ship wi h Sou h A ica” (K W En wicklungsbank, 2025).
16
Alize le Roux and Jakkie Cillie s, Clima e. Thema ic Fu u es, A ican Fu u es & Fo esigh P og amme, Theme 14,
(Ins i u e o Secu i y S udies (ISS), 2025).
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o ?
4
deg ee o capi al accoun openness and inancial in eg a ion in global ma ke s.
17
Fu he -
mo e, Sou h A ica has s ong (and es ablished) ade linkages wi h he es o he wo ld
(mo e han any o he A ican economy), and o he A ican economies a e highly dependen
on i s economy, especially i s neighbou s in he Sou he n A ican egion.
18
I Sou h A ica can eplace ca bon sou ces (especially coal) wi h enewables and de elop
local supply chains, skills and en e p ises, his will alida e he app oach o he Jus Ene gy
T ansi ion (JET) and may deli e insigh s in o possible ansi ional adjus men s o he A i-
can economies could make. Con e sely, i he ansi ion is pe cei ed o bene i only o eign
con ac o s o o impose social cos s on Sou h A ica’s wo k o ce, i could unde mine
domes ic buy-in and a nish he JET’s c edibili y. This challenge o ensu ing domes ic alue
cap u e and social legi imacy aligns wi h he Eu opean Union (EU)’s b oade s a egic ini ia-
i es. Speci ically, he EU’s Global Ga eway explici ly aims o “maximize he bene i s o a
job- ich g een ansi ion”, and his is ein o ced by i s signi ican in es men in A ica’s
in as uc u e.
Challenges: Why Sou h A ica S uggles o
Localize Renewable Ene gy Value Chains
Sou h A ica’s ene gy ansi ion does no occu on a blank sla e. I is cons ained by deep-
sea ed s uc u al ba ie s ha explain why Sou h A ica has s uggled o es ablish a esilien
domes ic enewable manu ac u ing base. Se e al s uc u al and policy- ela ed challenges
(Sec ions 2.1 o 2.3) eme ged om semi-s uc u ed in e iews wi h s akeholde s in Sou h
A ica’s ene gy and indus ial policy sec o s. In o al, 17 in e iews we e conduc ed be ween
July and Augus 2025, cap u ing he pe spec i es o ene gy consul an , labou union ep e-
sen a i es, policy make s, academics, coal mine wo ke s and expe s om de elopmen
inance ins i u es.
S uc u al and Ma ke Ba ie s o Localiza ion
The s uc u e o Sou h A ica’s economy has been shaped by a mine als–ene gy complex
(MEC) cha ac e ized by la ge-scale mining and ossil uel in e es s. This legacy has c owded
ou in es men in o he sec o s, such as manu ac u ing, and has hinde ed di e si ica ion.
19
The MEC is widely unde s ood as a ba ie o balanced de elopmen , as pas indus ial poli-
cies p io i ized mining, basic me als and hea y indus ies o e high- ech manu ac u ing.
O e ime, Sou h A ica expe ienced p ema u e deindus ializa ion – i s manu ac u ing
sha e began o decline be o e he economy had ma u ed in indus ial complexi y.
20
The
combina ion o MEC dominance and libe aliza ion p essu es exposed weak indus ial
sec o s o global compe i ion oo ea ly, esul ing in indus ial decline a he han ans o -
17
Lebogang Ma eane, “Risk P e e ences, Global Ma ke Condi ions and Fo eign Deb : Is he e any Role o he
Cu ency Composi ion o FX Rese es?” Resea ch in Economics 77(3), 402-418.
18
Lebogang Ma eane and Ch is ian R. P oaño, “Does Mone a y Policy Reac Asymme ically o Exchange Ra e
Misalignmen s? E idence o Sou h A ica,” Empi ical Economics 58, no. 4 (2020): 1639–1658.
19
Ha ald Winkle and An hony Black, “C ea ing Employmen and Reducing Emissions: Op ions o Sou h A ica,”
De elopmen Sou he n A ica 41, no. 6 (2024): 1078–1097.
20
Ha oon Bho a , Kezia Lilens ein, Mo nè Oos huizen, Amy Tho n on, “S uc u al T ans o ma ion, Inequali y and
Inclusi e G ow h in Sou h A ica,” UNU-WIDER Wo king Pape 2020/50 (Helsinki: UNU-WIDER, 2020).
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o ?
5
ma ion.
21
As a esul , by he ime enewable ene gy echnologies eme ged globally, Sou h
A ica lacked a ounda ion in elec onics, p ecision enginee ing and o he capabili ies
needed o manu ac u e sola panels and wind u bine componen s a scale. Wi hou
add essing his s uc u al de ici , domes ic p oduce s canno compe e in componen s such
as sola cells o u bine pa s.
Sou h A ica’s domes ic ma ke o enewable componen s has emained oo small and
unp edic able o sus ain local manu ac u ing. Manu ac u e s ely on s able, sizable demand
o jus i y in es men s in p oduc ion acili ies.
22
While he ea ly ounds o he REIPPPP p o-
cu ed abou 6,328 MW ac oss 92 p ojec s be ween 2011 and 2014, subsequen delays and
cancella ions dis up ed ma ke ce ain y and c ea ed long gaps be ween auc ions.
23
By
2022, he coun y had ins alled a ound 6.2 GW o sola pho o ol aics (PV), onsho e wind,
and concen a ed sola powe (CSP), accoun ing o oughly 7.3 pe cen o he ene gy mix.
24
Ye , p ocu emen emained une en, making local manu ac u ing a isky unde aking. Mo e-
o e , la e en y in o global ma ke s has exposed local i ms o s i compe i ion om cheap
impo s. Fo eign p oduce s – especially in China and Eu ope – bene i om economies o
scale and s a e suppo , expo ing panels, owe s and ba e ies a p ices Sou h A ican i ms
canno ma ch. His o ically, e en du y- ee impo policies mean local s a ups we e unde -
cu . These ma ke ba ie s (limi ed domes ic ma ke and o eign compe i ion) ein o ce
each o he : wi hou a gua an eed local ma ke (demand-side) o p o ec ion (policy-side),
manu ac u ing jobs will g a i a e elsewhe e.
Policy Incohe ence and Unce ain y
Ano he key obs acle is he agmen ed policy amewo k aced by enewable manu ac u -
e s. A consis en and aligned policy is equi ed o indus ial de elopmen . Ene gy planning
and indus ial policy we e no closely coo dina ed in he pas . Fo example, he Jus Ene gy
T ansi ion (JET) is managed by he P esidency and he Depa men o Mine al Resou ces
and Ene gy. In con as , indus ial policy is o e seen by he Depa men o T ade, Indus y
and Compe i ion (DTIC).
Al hough he go e nmen con enes mul i-s akeholde o ums o he JET (including
labou and business), coo dina ion ac oss hese ins i u ions has his o ically been limi ed,
wi h only ecen a emp s a join planning. As a esul , indus y de elopmen has o en
been shaped by pe iods o ini ial p og ess ollowed by delays, e e sals and policy pauses
be o e ini ia i es esume. This inconsis ency dis up s in es men con idence, local manu-
ac u ing capaci y and skills de elopmen , all o which equi e s eady demand and long-
e m ce ain y. One in e iewee a gued ha , in p ac ice, discussions o he jus ansi ion
o en emain abs ac and disconnec ed om implemen a ion eali ies. The in e iewee
no ed ha , despi e equen high-le el he o ic abou equi y and indus ial de elopmen ,
21
An onio And eoni and Fiona T egenna, “The Middle-Income T ap and P ema u e Deindus ializa ion in Sou h
A ica,” in S uc u al T ans o ma ion in Sou h A ica: The Challenges o Inclusi e Indus ial De elopmen in a Middle-
Income Coun y, ed. An onio And eoni e al. (Ox o d Academic, 2021).
22
Ul ich Te blanche, Nyawasedza Magoda, Si hobile Khoza, Jack Radmo e, Cilne e Pienaa , Lau en Basson, B uce
Raw, and Nicholas Fo dyce. “La ge-Scale Renewable Ene gy: Ma ke In elligence Repo 2025.” Cape Town:
G eenCape, 2025.
23
An on Ebe ha d and Raine Naudé, “The Sou h A ican Renewable Ene gy Independen Powe P oduce
P ocu emen P og amme: A Re iew and Lessons Lea ned,” Jou nal o Ene gy in Sou he n A ica 27, no. 4 (2016): 1-
14.
24
“CSIR Releases S a is ics on Powe Gene a ion in Sou h A ica – 2022,” CSIR, 22 Feb ua y 2023,
h ps://www.csi .co.za/csi - eleases-s a is ics-on-powe -gene a ion-sou h-a ica-2022
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o ?
6
he alignmen be ween hose ideals and ac ual mechanisms, such as p ocu emen and
localiza ion c i e ia, emains weak.
The In eg a ed Resou ce Plan (IRP) ini ially did no p io i ize local con en equi emen s,
he eby limi ing domes ic manu ac u e s’ pa icipa ion in enewable ene gy p ojec s.
25
A
he same ime, indus ial incen i es we e no ully aligned wi h he apid expansion o sola
and wind ene gy, lea ing local indus ies unp epa ed o supply he necessa y componen s.
The esul was policy whiplash, wi h missed o delayed oppo uni ies o localiza ion in
enewables p ocu emen (no ably a h ee-yea eeze on Independen Powe P oduce (IPP)
con ac s in 2015–2018). This led o he closu e o nascen componen ac o ies and e oded
in es o con idence.
26
F equen changes o ules ega ding local con en , and une en
en o cemen , c ea ed u he unce ain y o manu ac u e s. In sho , inconsis en and ag-
men ed policies, as well as o e lapping manda es be ween ene gy and ade, ha e been a
signi ican oo cause o weak indus ializa ion in he enewables sec o .
Skills, Inno a ion and Technology Gaps
Gaps in skills, echnology and inno a ion unde mine localiza ion. Renewable manu ac u -
ing is a knowledge-in ensi e ield, bu Sou h A ica aces a sho age o specialized enginee s
and echnicians.
27
A p ac i ione in ene gy ansi ion no ed ha “ echnical colleges and uni-
e si ies ha e only begun o adap cu icula o he g een economy and mos aining p o-
g ams a e piecemeal”.
28
This means manu ac u e s s uggle o ind wo ke s ained in sola
module assembly o powe elec onics.
Simila ly, Sou h A ica’s in es men in enewable ene gy esea ch and de elopmen
(R&D) is minimal, and o eign equipmen supplie s a ely ans e co e knowledge. Thus,
local i ms o en ecei e only basic echnology ans e s, which keeps hem a he lowe end
o he alue chain. Mo eo e , Sou h A ica has no signi ican pa en s o p op ie a y designs
o pho o ol aic (PV) modules, wind u bines, o ba e ies, meaning i mus impo designs
o echnology. O en, echnology is ans e ed in a limi ed manne ( h ough u nkey p o-
jec s o basic aining) ha p o ides local i ms wi h only he knowledge o ope a e sys-
ems, no he comp ehensi e expe ise o inno a e independen ly. This dynamic keeps he
local indus y dependen and low on he alue chain.
The challenges ou lined abo e demons a e ha Sou h A ica’s enewable ene gy sec o
canno h i e solely on ma ke o ces. These cons ain s sugges a clea conclusion: wi hou
delibe a e and coo dina ed s a e in e en ion, he ene gy ansi ion will de aul o
impo ed echnologies and yield only empo a y gains. The e o e, localiza ion ma e s as
an economic aspi a ion and as a p ac ical policy esponse ha can ans o m sys emic
weaknesses in o d i e s o indus ial upg ading, job c ea ion and communi y pa icipa ion.
Sec ion 3 examines how indus ial policy ins umen s, anging om s able p ocu emen
pipelines and local con en equi emen s o inancing mechanisms and echnology pa ne -
ships, can ope a ionalize his app oach.
25
In eg a ed Resou ce Plan 2019 (IRP2019) (Depa men o Mine al Resou ces & Ene gy (DMRE), Oc obe 2019).
26
Manu ac u e s and local con en Wo king G oup – SAWEA, Posi ion Pape on Manu ac u ing and Local Con en in
he REIPPPP (Sou h A ican Wind Ene gy Associa ion (SAWEA), 25 Ma ch 2019).
27
Phemelo Tamasiga, Challenges and Oppo uni ies o Jus Ene gy T ansi ion Pa ne ships in A ica, Policy B ie 30
(Mega ends A ika, 2024).
28
Au ho ’s in e iew wi h policy expe on jus ene gy ansi ion, Johannesbu g, Sou h A ica, July 2025.
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o ?
7
Communi y owne ship and go e nance gaps
Communi ies in Sou h A ica emain la gely ou side he cen es o con ol and alue cap-
u e ac oss enewable-ene gy alue chains.
29
Communi y us s ypically hold small, non-
con olling s akes wi hou e o o ese ed ma e s igh s o e ope a ions, e inancing, con-
ac changes o asse sales. The esul is a pe sis en sense o o mal owne ship wi hou
eal agency. In he ea ly yea s o ope a ing a communi y us , mos e enue is used o se -
ice p ojec deb , esul ing in modes , delayed di idends o communi ies. Wha a i es is
o en u he educed by ees, in e es and laye ed company s uc u es.
Go e nance and capaci y gaps compound hese limi s. T us ees o en lack he inancial
and legal expe ise o in e p e complex p ojec documen s, while sponso s and lende s
con ol mos o he in o ma ion, he eby en enching asymme ies and weakening o e -
sigh . Whe e ules a e weak, eli e cap u e can occu . A na ow g oup domina es boa d sea s,
decision-making becomes opaque, and en s acc ue o a ew a he han being b oadly
sha ed. In p ac ice, hese dynamics can educe communi y us o a compliance checkbox,
edis ibu ing some cash wi hou shi ing decision igh s o in luence.
Solu ions: Embedding Localiza ion Pa hways in
Renewable Ene gy Value Chains
Ancho ing enewable in es men in domes ic indus ies, localiza ion c ea es demand o
local supplie s, builds skills and echnology capabili ies and educes dependence on
impo ed equipmen . Fo ins ance, local con en equi emen s ied o p ocu emen can
coun e ac he his o ical neglec o manu ac u ing. A he same ime, communi y- and
wo ke -owne ship schemes add ess inequali y and ensu e ha bene i s each hose mos
a ec ed by he ansi ion. Localiza ion, in his sense, is no an isola ed policy choice bu a
le e age poin ha connec s indus ial policy, skills de elopmen and communi y empow-
e men wi h he ollou o enewable ene gy.
S eng hening Local Supply Chains and Policy Ce ain y
Manu ac u ing in es men hinges on a p edic able domes ic ma ke . A ac o y o wind ow-
e s o PV modules will only be iable i de elope s can expec a s eady pipeline o p ojec s.
In his ega d, Sou h A ica’s policy ack eco d sends mixed signals. The las -minu e delay
in 2018 o independen powe p oduce (IPP) con ac s hal ed g ow h, shu e ed plan s and
led o job losses.
30
This was a clea indica ion o how policy ola ili y unde mines indus ial-
iza ion. Fo example, sola module plan s in Gau eng and wind owe acili ies in he Wes -
e n Cape closed du ing his pe iod. When p ocu emen esumed, much o he high- alue
echnology con inued o be impo ed. The In eg a ed Resou ce Plan mus he e o e be
igh ly aligned wi h indus ial policy o ensu e ha p ocu emen unc ions as a d i e o
indus ial de elopmen . Mul i-yea auc ion schedules, imely con ac awa ds, and ans-
pa en a ge s a e essen ial o gi e supplie s con idence o in es in p oduc ion acili ies,
skills and supply ne wo ks. B azil, o example, used mul i-yea p ocu emen schedules and
29
Lucy Bake and Holle Linnea Wlokas, Sou h A ica’s Renewable Ene gy P ocu emen : A New F on ie ? (Ene gy
Resea ch Cen e, Uni e si y o Cape Town, 2015).
30
“Sou h A ica: One Mo e Delay o he REIPPP,” A ican Ene gy Newsle e (15 Ma ch 2018), accessed 17 Oc . 2025.
Localiza ion S a egies o Sou h A ica’s Renewable Ene gy Sec o ?
8
s ong local-con en equi emen s o g ow i s wind and sola indus ies.
31
Sou h A ica
could adap simila measu es by ensu ing ha enewable p ocu emen is sequenced and
scaled in a way ha p omo es cumula i e g ow h a he han isola ed p ojec s.
REIPPPP has s eadily inc eased he local-con en h esholds, eaching 54 pe cen o
sola PV, 54 pe cen o concen a ed sola powe (CSP) and 47 pe cen o onsho e wind
p ojec s by Round 3.
32
En o cemen mechanisms and moni o ing o ou comes will be c i i-
cal. In pas REIPPPP ounds, ambiguous de ini ions o wha coun ed as “local” allowed
de elope s o o e s a e local con ibu ions. To a oid his, localiza ion policies mus include
anspa en audi ing sys ems and consequences o non-compliance, such as inancial pen-
al ies o disquali ica ion om u u e ounds. Con e sely, i ms ha exceed a ge s could be
ewa ded wi h p e e en ial ea men in subsequen bids. Beyond compliance, he go e n-
men should in es in capaci y-building p og ammes o supplie s o ensu e ha small and
medium en e p ises can access oppo uni ies wi hin enewable alue chains.
Localiza ion policies mus also ha ness Sou h A ica’s mine al endowmen s o s eng hen
supply chains. As A ica’s la ges s eel p oduce , Sou h A ica is well placed o supply s uc-
u al me als o wind owe s, sola moun ing ames and o he c i ical componen s. Simi-
la ly, he high-g ade anadium ese es could be le e aged o p oduce anadium elec o-
ly es and assemble low ba e ies domes ically.
33
By in eg a ing mining, e ining and com-
ponen p oduc ion, Sou h A ica can cap u e mo e alue domes ically a he han expo ing
aw ma e ials.
Financing and Incen i es o Local Pa icipa ion
Ta ge ed incen i es and inancing mechanisms a e cen al o unlocking localiza ion. Spe-
cial Economic Zones (SEZs), such as A lan is in he Wes e n Cape, show how clus e ing man-
u ac u e s wi h logis ics and cus oms ad an ages can a ac in es men . Incen i es mus
be p ecise and ime-bound, including ax c edi s, concessional loans and expo eba es a -
ge ed a ac o ies p oducing co e enewable componen s. Ta i e o ms also need ca e ul
calib a ion. I is coun e p oduc i e i inished impo s en e du y- ee while pa s o local
assembly ace du ies. A comp ehensi e audi o he enewables alue chain – om aw
inpu s o inal p oduc s – would help iden i y whe e a i s should be adjus ed o p omo e
local p oduc ion.
Financing emains a decisi e ac o o pa icipa ion in local alue chains. La ge-scale
p ojec s a e capi al-in ensi e and ha e been mainly inanced by o eign de elope s and
majo banks, lea ing smalle Sou h A ican i ms and communi y g oups a a disad an age.
Expanding he Small P ojec s REIPPPP, wi h simpli ied equi emen s, could lowe ba ie s
o en y. Public inance ins i u ions could also p o ide g an s o in e es - ee loans o com-
muni y us s, allowing hem o bene i om p ojec e enues immedia ely a he han
wai ing un il deb is epaid. Go e nmen -backed c edi gua an ees and pa ne ships wi h
in e na ional clima e unds could encou age lending o smalle manu ac u e s and con ac-
o s. Meanwhile, blended inance models combining public, p i a e and philan h opic
esou ces could help educe bo owing cos s. Linking inancial ins umen s o localiza ion
31
Mo gan B azilian, Vic o ia Cuming and Thomas Kenyon. “Local-con en ules o enewables p ojec s don’
always wo k,” Ene gy S a egy Re iew 32 (2020): 100569.
32
Gaylo Mon masson-Clai and Geo gina Ryan. “Lessons om Sou h A ica’s Renewable Ene gy Regula o y and
P ocu emen Expe ience,” Jou nal o Economic and Financial Sciences 7(S) (2014): 507–526.
33
Lesego Moshika o and Lebogang Phe o. Localising Vanadium Ba e y P oduc ion o Sou h A ica’s Ene gy
Secu i y. P e o ia: T ade & Indus ial Policy S a egies (TIPS), 2023.
