Green energy, green economy, green opportunities
By Nicholas Fordyce, Communications and Publications Manager, Green Cape The building blocks of any economy are the same; to power an economy, we need sources of energy. To grow our community, we must provide food and other resources. We need infrastructure to supply and distribute water and sanitation services. We require a waste management system that can capture, process, and safely dispose of, or clean, the waste we generate. And for all of the above, we require modes of transportation. However, not all economies are built the same way. For far too long, people have pursued a form of economy based on a linear “take-make-waste” model based on the extraction and consumption of limited fossil fuel resources. This has gradually plunged us into a number of crises, including the global climate crisis, the 6th extinction, resource availability crises, landfill airspace shortages, and significant widespread inequality. Globally, there is now an urgent trend towards transitioning to alternative ways of operating. A green economy has all of the same building blocks as its linear counterpart, but with an emphasis on technological solutions that are circular, clean, renewable, sustainable, and, critically, also profitable. Moreover, a green economy is one that is considered socially inclusive, creates meaningful and dignified job opportunities, and is focused on service delivery to those communities that are most vulnerable. For businesses that transition to green technologies, enhanced business resilience and profitability are anticipated outcomes. Through its partnership with the City of Cape Town, GreenCape, a non-profit organisation that drives the widespread adoption of economically viable greentech solutions across Africa, has published a suite of freely available case studies and industry briefs designed to showcase the broad range of green economy opportunities, solutions, and interventions across all of the aforementioned sectors that are currently present within Cape Town. The examples provided below are not exhaustive but paint a clear picture of the types of opportunities that exist within Cape Town’s enabling environment. The energy crisis For South Africans, the most glaringly obvious challenge facing our country is our energy crisis. Load shedding is now a daily reality, and with the schedule so extreme, we shift through many stages a day. Indeed, in 2023, we saw more hours of load shedding, and at higher stages, than in any previous year. For businesses, the combination of energy insecurity and rising Eskom tariffs makes the provision of electricity a major liability. There is now a huge movement for businesses to ensure security of supply, with many opting for the costly and dirty solution of running diesel generators or seeking energy storage solutions. But those are not the only solutions. There is an increasingly strong business case for small-scale embedded generation (SSEG), a green economy solution that allows for the generation of clean, renewable energy at a cost significantly lower than that of Eskom tariffs. Indeed, the uptake of SSEG has exploded in South Africa, particularly in the commercial and industrial (C&I) sectors. So, what’s the catch? Until recently, a significant one was the upfront capital costs associated with installing a solar photovoltaic (PV) system. But accessing finance has now shifted from being a barrier to becoming a competitive means of extracting additional value. Consequently, the most significant consideration for companies is selecting the most appropriate financing option for their project, and a range of innovative financing options exist. While outright purchases still provide the best return on investment over the lifetime of the asset, power purchase agreements (PPAs) and lease agreements have cash flow and system performance benefits and provide great alternatives for businesses without the upfront capital for a solar PV system. Many businesses are starting to take up these opportunities. For example, Pick n Pay (Brackenfell, Cape Town) has demonstrated the benefits experienced from installing a 250.8 kW solar PV system (developed, designed and installed by Emergent Energy and financed through a solar rooftop rental agreement by Decentral Energy). Urban agriculture: the growth of cannabis Turning to agriculture, a trio of urban agricultural opportunities in the hemp market—in pharmaceuticals, in the construction industry, and in textile production—demonstrate the inherent potential within Cape Town’s urban agricultural market. Globally, the cannabis sector is growing, and is currently valued at ~$51.28 billion (Statistica 2023). Nationally, recent policy and regulatory changes have created an enabling environment that is opening up local opportunities for investment and job creation within the cannabis sector. In Cape Town, the first of these key opportunities for investment in the cannabis sector, lies within the pharmaceuticals industry. Because medicinal cannabis can be grown in three different production systems (indoor, greenhouse, or outdoor), opportunities exist across the value chain, not only in cultivation and processing but also in the companies that provide the required agro-technologies and services. The medicinal cannabis companies in the Western Cape use both greenhouse and indoor production systems, and so agro-technology suppliers of systems such as lighting, fertigation (the practice of applying fertiliser solutions with irrigation water), drip irrigation, water treatment, etc. will benefit from the greater market demand as more medicinal cannabis start-ups set up facilities. Industrial zones, such as Epping, are well-suited for start-ups looking to repurpose existing warehouses and set up indoor facilities. Additionally, in 2018, Cape Town was the leading medical destination for medical travellers in Africa and has a competitive advantage in that it has world-renowned doctors, a medical industry that has pioneered many ground-breaking surgeries, and a favourable currency exchange rate (in comparison to the US Dollar, Pound Sterling, and Euro). This only serves to highlight the potential of the opportunity within the Cape Town context. In addition to pharmaceuticals, there is a growing global interest in the use of hemp in the construction sector, particularly as the sector looks at different pathways for reducing the overall carbon footprint of the value chain. It is estimated that the building and construction sector accounts for around 40% of greenhouse gas (GHG) emissions globally, from materials to heating, cooling, and lighting (Muller et al 2020). There is also growing concern that the price