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Hendrik Schoeman
HENDRIK SCHOEMAN DCD was the first local company to manufacture and assemble a 2.5 MW wind power turbine in South Africa

Wind power projects will assist in providing not only power for the national grid but also much-needed skills development and job opportunities, renewable-energy company DCD Energy marketing manager Hendrik Schoeman tells Engineering News.

In May, DCD officially started construction work on its R300-million 23 000 m2 wind tower manufacturing facility in the Coega industrial development zone (IDZ), in the Eastern Cape.

The wind tower manufacturing facility is a joint venture (JV) which includes DCD Group, development finance institution the Industrial Development Corporation (IDC) and the State-owned Coega Development Corporation (CDC), which manages the Coega IDZ.

Schoeman stresses that the manufacturing facility, which will supply original- equipment manufacturers with tubular steel towers up to 120 m high, is being estab- lished to support the localisation of the wind tower manufacturing industry in South Africa to match international standards and be globally competitive in all areas of wind tower manufacturing.

"The partnership between DCD Group, the IDC and CDC is evidence of a combined effort to provide sustainability and growth for the local renewable-energy sector," he says, highlighting that the facility will create about 200 operational and 600 construction jobs.

CDC head of marketing and communications Ayanda Vilakazi says the corporation views DCD's investment into the region as an enabler for renewable-energy-focused industrial growth, which is a result of CDC's proactive lobbying for green energy investment in the region.

"The partnership between DCD subsidiary DCD Wind Towers and CDC highlights the mutual drive to provide sustainability and growth for the local energy sector, while advancing socioeconomic development and transformation in the Eastern Cape," adds Vilakazi.

To ensure the highest standards of production efficiency, Schoeman says DCD Wind Towers has entered into a technology partnership with wind energy company Vestas.

Moreover, he states that detailed research, planning and travel to facilities in Asia and Europe have gone into ensuring that the new plant is highly efficient and designed to emulate international competitiveness in terms of technology, quality and pricing.

DCD states that construction of the factory will be completed by December and manufacturing of the wind turbine towers will begin by January 2014.

The tubular wind turbine towers manufactured at the site will be supplying at least six round two Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) projects with wind turbine towers.

Investment and Job Creation

Wind Turbine Tower
CREATING JOB OPPORTUNITIES The benefits to the local economy will extend beyond the supply of local skilled jobs and training to logistics and additional value chain opportunities

The CDC has confirmed that the macroeconomic impact of the total investment within the CDC will be R239-million for construction and operation, including the direct, indirect and induced impact.

"The impact of the development on the Eastern Cape provincial gross domestic product is 0.16% while about 1 951 jobs will be created during the construction and operational phases, with 23% of these jobs stemming from the operation of the factory," says Vilakazi.

He adds that the benefits to the local economy will extend beyond the supply of local skilled jobs and training – they will include logistics and additional value chain opportunities, thus creating a new renewable-energy manufacturing industry in the Eastern Cape.

The development will drive the construction of enabling infrastructure that supplies services and products to the wind tower manufacturing facility. This resonates particularly with the Coega IDZ and its integrated distribution channel – namely the Ngqura deep-water port, logistics and freight transport solutions, in the Eastern Cape – that links to downstream industry creation for enterprises and service providers, emphasises Vilakazi.

The spin-offs of renewable- energy manufacturing-capacity investment in the Coega IDZ and the development of various wind and solar projects are likely to create thousands of jobs, with wind technologies expected to produce about 1 080 jobs as a result of more projects under construction in the Eastern Cape, says Vilakazi.

Challenges

DCD is contracted to deliver 112 wind towers for the REIPPPP round two projects.

Once DCD's Eastern Cape factory is operational in January 2014, it will have the capacity to produce 120 wind towers a year, but the company believes that if production reaches top efficiency levels, it can produce 180 towers a year.

Schoeman says the company will invest in additional capacity to expand production capabilities if required, and has partnered with Vestas to not only assist in the initial setting up of the factory but also seek ways of improving production efficiencies once the factory is operational.

The company is contractually obligated to source as much local content as possible but DCD has had to import raw steel plates, as not all the required steel plates are currently available in South Africa.

Developing Complete Wind Turbines

Spiral Castings
SPIRAL CASINGThe DCD wind tower manufacturing facility, which will supply original-equipment manufacturers with tubular steel towers of up to 120 m in length, is being established to support the localisation of the wind-tower manufacturing industry in South Africa

DCD Group has been involved in energy projects in South Africa since the 1960s and has provided components for all 22 power stations. It is also working on State-owned power utility Eskom's Medupi and Kusile coal-fired power stations, in Limpopo and Mpumalanga respectively, as well as Eskom's Ingula pumped-storage scheme under construction on the border of the Free State province and KwaZulu-Natal

The company manufactured a 2.5 MW capacity wind turbine for research and development purposes in 2012 with the aim of establishing if this could be undertaken locally. The tower sections were manu- factured at the company's Vereeniging factory, in Gauteng. The nacelle was assembled and the tower blades, which are 50.3 m long and weigh about 12 t each, were all manufactured at its factory in Cape Town, in the Western Cape.

"DCD, therefore, was the first local company to manufacture and assemble a 2.5 MW wind power turbine in South Africa and the company is currently in negotiations to finalise a power purchase agreement (PPA) and a site for this turbine," he boasts.

The company learnt a great deal from this process and acquired not only valuable skills but also important technologies, such as the moulds for the wind turbine blades, says Schoeman.

Going forward

Schoeman believes that the company will in future be able to expand its operations to include the local manufacturing of the wind turbine hubs, full-scale assembly of the nacelles and manufacturing of the wind turbine's blades.

Schoeman says, with Eskom's price tariffs increasing at about 8% a year, the price of wind power is becoming increasingly competitive.

He says government has imposed a requirement of 40% local content in the construction of the REIPPPP projects from round three onwards. The 40% local content requirement can be split: 28% for balance of plant, which relates to the civil construction undertaken on the site and the erection of the site, and 12% for the building of the turbine tower.

"DCD had demonstrated that up to 65% local content is achievable," he notes.

"When government increases the local content requirements, renewable-energy component manufacturers will be able to expand their capacities and the country will also see new company's being established to manufacture wind and solar components," he concludes.

Posted in: DCD Wind Towers
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