Speech delivered by the Deputy Minister of Science, Technology and Innovation, during the KwaZulu-Natal Energy Indaba | City of Umhlathuze
Premier of KwaZulu-Natal, Honourable Ntuli.
MEC for EDTEA, Honourable Reverend Zondi.
All MECs Present.
Host Mayor of uMhlathuze Municipality, Councillor Ngwezi.
District Mayor of King Cetshwayo and All Mayors present.
The Head of Departments and Senior officials.
The CEO and the Executives of Richards Bay Industrial Development Zone.
Corporate leaders and company representatives.
Civil society, stakeholders, and delegates.
Ladies and gentlemen.
Receive our warm message of gratitude from the National Government to this well-organised Provincial Government led by KZN Energy Indaba. I congratulate you on this outstanding feat of taking practical steps to build provincial self-sufficiency in energy generation, supply, and security, to turbocharge the future of the KZN economy and contribute to the rest of the country.
Energy remains the lifeblood of the global economy and economic growth. And so, any country or region that secures its energy supply becomes attractive to investment and industrialisation.
But energy sovereignty is also a critical element for any country in these volatile days of geopolitical uncertainty. The current conflict between Israel, the USA, and Iran and the impact it has had on the oil market, sending the price of a barrel to the roof all over the world, because we all depend on these oil-producing countries. And so, diversifying our energy supply and self-generation should be our currency.
We can have good, predictable trade policies and well-levelled investment pipelines for this province. Still, if the security of energy supply is not assured and predictable to investors, I can assure you that no investments will ever flow to KwaZulu-Natal. And that is why the National Government has responded to today’s invitation with keen interest to lend support.
The province consumes over 6700 megawatts and faces an annual shortfall of 400 to 470 megawatts to sustain projected economic growth. The province has set a target of generating 5,000 megawatts of renewable energy by 2030. It is a positive sign that NERSA has approved a 3000 megawatt gas power station here in Richards Bay.
President Ramaphosa has been backing the Richards Bay location as a regional strategic energy hub for a few years now, stating in his speech that Richards Bay must be positioned as a critical pillar of South Africa’s energy transition, industrialisation, and export-led growth strategy.
This initiative is one of the important Presidential Vulindlela operations to unlock reindustrialisation in the country through fixed capital formation and to address bottlenecks, resetting the economy towards unprecedented acceleration for the future.
In one of his State of the Nation’s Addresses, President Ramaphosa stated that coastal energy hubs are essential to stabilising electricity supply and supporting economic growth, with Richards Bay identified as a priority location due to its:
- Deep-water port infrastructure.
- Proximity to industrial corridors.
- Established coal, logistics, and export capacity.
- Suitability for gas-to-power, LNG imports, and green hydrogen exports.
These pronouncements align with his broader vision of diversifying South Africa’s energy mix away from coal while maintaining economic competitiveness. As a result, President Ramaphosa has endorsed natural gas as a transition fuel, especially in coastal hubs. For Richards Bay, this is important as the whole audience here knows fairly well that:
- Mozambique gas supplies are declining by 2027.
- South Africa needs LNG import capacity to prevent energy shortfalls.
- Richards Bay is designated for the first LNG import terminal.
- Gas-to-power projects in Richards Bay Industrial Development Zone could add up to 3000 megawatts of generation capacity.
While Richards Bay is not a primary site for renewable generation, it must also be a logistics and export hub for the green hydrogen value chain.
As the province strengthens its position to establish Richards Bay as a strategic energy hub, the Hydrogen Energy Initiative provides a partnership opportunity to advance the following maritime-related infrastructure development necessary to support industrialisation and sustainable economic growth:
- Hydrogen export terminals: Support the building of import/export terminals for hydrogen and its derivatives (like ammonia and methanol) at ports such as Richards and Durban.
- Decarbonization of port operations: Support the use of green fuels to power the maritime fleet. This includes supporting a pilot project to retrofit tugboats to run on alternative fuels such as hydrogen, methanol, and Liquefied Natural Gas (LNG), to reduce the carbon footprint of marine operations.
I think the KZN Government - especially the Richards Bay IDZ - must weave green hydrogen value chain exports, such as green ammonia and other products, into its plans as an additional industrial activity.
While Northern Cape is where green hydrogen is produced and catalysed, downstream opportunities are being taken in various parts of the country. The first SEZ to take the lead very strongly is Coega SEZ in Gqeberha, developing a large-scale green hydrogen and ammonia production facility supported by 3.6 gigawatts of renewable energy, located at the deep-sea port of Ngqura for export to the European market. These are also massive opportunities for Richards Bay RDZ.
As the Department of Science, Technology and Innovation, we are one of the leading Departments in green hydrogen energy and are part of the Interministerial Committee chaired by the Deputy President. From the work we are doing at the national level, green hydrogen is the next big thing in the country's clean energy mix, and we have just started extensive work on it.
The above emphasis on renewables and transitional energies should never be interpreted as a total rejection of coal as part of the mix, which is highly abundant in South Africa. The conversations have shifted towards technologies that can help us move towards clean coal in the future.
As the national Government, we are making progress in the reform agenda to put our economy on a sustainable pedestal. Part of this is fixing the rail and port as a national priority. We do this to support, amongst other things, energy and mineral exports.
The Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa, has been leading the charge, and I know he is very supportive of the energy question for the Richards Bay hub because it is not for KZN alone, but for the country's economy as a whole.
MEC Reverend Zondi, for some time now, we have been concerned about KZN's growth stagnation, which has not succeeded in breaking the glass ceiling of 16% GDP contribution to the national GDP.
Yes, we are the second-largest contributor after Gauteng, with a GDP contribution of 33%. The backbone of provincial GDP growth remains Durban and Richards Bay, with strong manufacturing, trade, and logistics.
Stimulating new growth frontiers in the economy, including harnessing the rural economy very strongly for our youth beyond primary agriculture. Attracting investments here and abroad should be the currency the government uses to address unemployment and expand the economic base for growth, far better than the 16% GDP contribution. We stand ready, always, to lend support and help navigate a tough environment to achieve these goals together in the spirit of cooperative government.
I take this opportunity to thank the IDZ leadership for keeping this focus on energy hub positioning in Richards Bay alive. In my previous capacity in the Department of Trade, Industry and Competition, we had deep conversations with senior leadership of the Zone to help Richards Bay become this nucleus of new energy and thereby shoulder the province as a whole in attracting more investment pipeline.
I thank Premier Ntuli and MEC Zondi for elevating this important work through this Indaba, whose results will benefit future generations of KwaZulu-Natal and the country as a whole.
Thank you very much.
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