Finance and Economic Opportunities

There are a number of indicators one could use to assess the value of the Green Economy, such as the number of companies, however,  the green tech sector is not measured as a separate sector, and so contribution to GDP is difficult to determine. A sector analysis study for the City of Cape Town in 2019/20 provides some proxy indicators. Considering that about 70-80% of the Western Cape's economy can be attributed to the City of Cape Town, this information can be indicative at least of minimum likely size. 

 

A few headline items from this analysis indicate that:

 

• In 2019/20, Cape Town had a minimum of 600 companies providing green goods and services to the economy. Of these, 522 (87%) were SMMEs: 275 (46%) of these businesses were micro businesses, 175 (29%) were small businesses, and 72 (12%) were medium businesses. The remaining 78 (13%) companies were identified as large businesses. Of the 600 companies, 416 (70%) have head offices in Cape Town.
• The companies operating in Cape Town supported between 6,865 - 29,075 formal jobs. This excludes an estimated minimum of 10,000 informal waste reclaimers operating in Cape Town.
• It is expected that both the number of companies and jobs have grown particularly post-Covid and due to the current energy crisis. 
• The revenue: GDP ratio of the Green Economy to the total GDP of Cape Town is estimated to be between 2 and 9%. 

 

In terms of the value of green economy related opportunities in the province:

 

The Energy Services Market Intelligence Report (MIR) for 2022 highlighted the estimated value of R35 billion by 2035 in Western Cape (from the estimated national value of R131 billion by 2035), using the total available market for the SSEG (solar rooftop PV systems) installed in the country, energy storage, and capital leveraged in energy efficiency interventions implemented by the South African energy users. It is important to note that this estimate does not consider smaller technology market segments that are also part of this market sector, such as small-scale wind energy, waste-to-energy, solar thermal, and diesel generators.

 

In addition, as outlined in the Water MIR, there is an investment opportunity on smart systems for water and wastewater management, with R1.2 billion in planned smart meter installation in the City of Cape Town over 8 years, and R5.5 million subsidy for smart metering in Western Cape schools. With respect to public sector water and wastewater treatment (W&WWT) infrastructure, R10.1 billion is budgeted by Western Cape municipalities (incl. R7 billion for the City of Cape Town) for W&WWT infrastructure expenditure over the next 3 years with an additional R3.8 billion (R 2.75 billion for City of Cape Town) for repairs and maintenance with opportunities for climate mitigation and innovation. 

 

1.  

While GreenCape is not a provincial entity, it was contracted by the Department of Economic Development and Tourism (DEDAT) in 2020/21 and 2021/22 to provide services to industry to help grow the green economy.

 

Apart from direct support being provided to industry to assist with technical and financial decisions, matchmaking and other, during 2020/21, GreenCape in partnership with Wesgro facilitated investments to the value of R11 563 700 000 (50/50 split with Wesgro i.e.  total value of investment supported by GreenCape was R5 781 850 000) and during 2021/22, GreenCape in partnership with Wesgro facilitated investments in the Western Cape to the value of R61,853,205 (50/50 split with Wesgro i.e.  total value of investment supported by GreenCape WAS R30,926,602). An additional investment declaration of R52 million was signed in 2021/22, but this covers four provinces including the Western Cape.

 

Since being established in 2010, GreenCape has helped to facilitate and support R42 billion of investment in renewable energy projects and manufacturing (not limited to the Western Cape). From these investments, more than approximately 19 000 local jobs have been created. GreenCape has also diverted over 104 900 tonnes of waste from landfill by connecting businesses with waste/under-used resources through their Western Cape Industrial Symbiosis Programme (WISP).

(c) 

The transition to green energy in the province doesn’t pose any direct negative risks to jobs in the Western Cape as is in the case of Mpumalanga where coal power stations and related jobs are located. There are no coal power stations or coal mines located in the Western Cape, which is where the bulk of energy transition job risks sit. Additionally, green energy developers have a proportionately higher presence in the province, with 16 out of 25 projects awarded in REIPPPP (Renewable Energy Independent Power Producer Procurement Program) Bid Window 5 being awarded to developers with offices in the Western Cape. This is due to the significant support work that has been undertaken in the Western Cape in the past decade, including the annual development and distribution of energy-related (utility-scale and energy services) market intelligence reports, as well as direct support to businesses, municipalities and others through engagements, networking events, case study and industry brief development.

 

(d) 

The energy transition is deemed to have no negative impact on jobs in the Western Cape. In fact, the opposite is true and the transition can assist in creating new jobs in the sector through:

• a reduction in risks to and growth potential for exports due to the avoidance of carbon border taxes (due to lowering the carbon footprint of goods manufactured and / or produced in the province),
• the creation of value-adding local manufacturing opportunities e.g. Atlantis Special Economic Zone (SEZ),
• increased investment in the Province by renewable energy project developers,
• increased activity in the energy sector as a whole (e.g. installers of PV systems), and
• increased investment by businesses in the Province to build their own and Western Cape energy resilience.

The Western Cape Government is also planning to develop a Western Cape Just Energy Transition Investment Plan to harness further access to climate financing opportunities that support the energy resilience of all. Given the current energy supply crisis, rising energy costs, and the increasing threat of carbon border adjustments, the risks to jobs are much greater if we do not transition to a green energy in the Province.