April 2021 – Johannesburg-based South African start-up Bluedrop, has secured an R300-million investment from J. Sassoon Group, a US, Washington DC-based private equity fund, for their Liquefied Petroleum Gas (LPG) cylinder manufacturing plant, in the west of Johannesburg, South Africa. The project is expected to create 110 direct jobs during construction and 35 direct jobs at full commercial operation. Using the highest standards in manufacturing processes along with the latest technology, and raw materials designed to reduce carbon footprint, Bluedrop will be setting a new standard for South Africa’s gas cylinder manufacturing.
Among the many challenges facing the project was that Bluedrop was in a pre-revenue stage in an incredibly competitive and highly regulated industry. However, J. Sassoon Group’s solution-driven management approach complements start-ups’ strengths while strengthening their weakness by utilising its own global network. In addition to assisting with sourcing global engineering firms for the construction, J. Sassoon’s external consultants and accounting service firm, PriceWaterhouseCoopers (PWC), is providing consultancy and advisory services to the project.
Upon succeeding his grandfather as the chairman of the board, David E. Sassoon has taken a keen interest in Africa, continuing the family’s historical relationship with the continent, particularly South Africa. Bluedrop is the optimum start-up to reengage the African market. David E. Sassoon personally mentored and guided Bluedrop through the complexity of the financing phase. The firm financially engineered the mezzanine finance deal to reduce borrowing costs in addition to a twelve-month payment holiday, enabling Bluedrop to accelerate growth and optimise success.
Bruce Fein, J. Sassoon Group’s CEO explained that Bluedrop is the first pre-revenue start-up in Africa that J. Sassoon Group has invested in:
“Our focus is on start-ups, entrepreneurs and midmarket companies. Bluedrop is the type of forward-facing, energetic company we are looking for. We are confident that this is a value accretive investment”
Bruce Fein, J. Sassoon Group’s CE
Commenting on the transaction, Bluedrop’s Chief Financial Officer Kenneth Maduna said, “As an independent 100% black-owned company, we are ecstatic with the investment made by J. Sassoon Group more so for showing their confidence in us and South Africa as an investment destination.” Construction of the manufacturing plant is expected to commence in Q4 2021 and will take 12-14 months to complete.
A variety of factors are making the offshore wind industry a strong candidate for growth, but market dynamics are creating uncertainty. While traditional players are pursuing aggressive growth strategies, new entrants are reshaping the landscape.
The offshore wind industry is gaining momentum thanks to ambitious environmental targets, competitive costs, and huge market potential. This renewable source of energy provides an optimal load factor, minimising the need for electricity storage or complementary dispatchable sources of energy. The public sector has been rushing the field with new players, including oil and gas companies, creating a strong push for investments in the wake of the Covid-19 crisis.
Ambitious national targets
Since the 2015 United Nations Climate Change Conference, most governments have launched energy transition strategies and are adopting a variety of approaches to decarbonize.1 Historically, offshore wind development mostly took place in Europe in the North Sea, and China has set ambitious targets for offshore wind. But so far, the United States has been less ambitious. The European Union (EU) is aiming to install between 230 and 450 GW of capacity by 2050, and China announced 175 GW over the same horizon. Meanwhile, the United States is aiming for only about 85 GW. Although there is less visibility on China’s road map, offshore wind could help accelerate the end of coal power—improving air quality and ensuring energy security along the way.
The economics of offshore wind are improving as the costs come down and the energy source becomes more competitive with not only fossil fuels but also other renewable technologies, including solar photovoltaics (PV) and onshore wind.2 As wind turbines grow (up to 12 MW and already announced 15 MW), the load factor could reach new records— above 60 percent—making offshore wind technology even more cost-competitive in the future.
The International Energy Agency (IEA) predicts a sharp decline of offshore wind’s levelised cost of electricity (LCOE) until 2040, down from about €150 per MWh to €25 to €45 MWh depending on the geographic setting.3 This has enabled a key change with the emergence of subsidy-free bids (see figure 1).4
Huge energy potential
Despite significant growth over the past several years, mostly in Europe, offshore wind is still a very small share of world power production (68 GWh in 2018, or about 0.3 percent) and installed capacity (28 GW in 2018, or about 0.4 percent).5 Technical sources offer a power potential of more than 25,000 GW globally, with the United States having the largest offshore wind technical potential both for near-shore and far-from-shore zones (more than 10,000 GW).
Offshore wind capacity is expected to grow by about 25 GW per year over the next two decades, activating a limited share of technical potential.6 Furthermore, offshore wind is displaying strong resilience amid the Covid-19 pandemic with annual capex expected to equal offshore oil and gas capex both in Europe by 2021 and in the United States over the next decade. 7
Market dynamics are creating new tensions in the offshore wind industry
Attractive growth prospects are creating complexities and challenges in four areas:
Regional specificities with uneven strategies
The development of offshore wind is influenced by local market factors, and countries are adopting a variety of approaches to foster renewables growth:8
Energy security. This is a key incentive for the EU, but the United States is less concerned despite benefiting from the world’s largest source of offshore wind. The EU has defined a clear ambition with a strong commitment from countries and structured supporting policies, including the Green Deal, potentially boosted by the Next Generation EU recovery plan.
Wind turbine manufacturing capacity. This is well-established in the EU, with leading capacities already deployed in the North Sea. In the United States, offshore wind is still an emerging market, with only 30 MW of installed capacity in the first half of 2020. In the United States, despite strong fundamentals such as the technical potential and support mechanisms, full development of the offshore wind value chain is far from achieved and will require structured support. In China, offshore wind should benefit from a centralized administration, adequate infrastructures, potentially huge wind turbine manufacturing capacities, and logistics capabilities. This implies short contracting procedures, government support, and no public acceptance issues.
Power grid flexibility and regulation. These areas could provide additional complexity and embed various integration capacities, such as grid connection technologies, bidding processes and contracts, merit order, and support mechanisms for connection costs. Even if some countries have already reached their integration capacity, the European network is very well integrated, providing additional capacity for offshore wind integration. The US power grid is fragmented and has a limited capacity to deal with a large share of intermittent electricity. China’s power grid is integrated, which would favor the integration of wind power. Finally, large hydro-storage capacities provide the ideal combination with wind offshore.
Larger and more complex scope
This year marked a step-change in the size of wind farms, with the largest wind farm size doubled compared with past years (see figure 2). In addition, hybridisation with other technologies will be crucial for economic and environmental viability. Recent bids show a combination of offshore wind with green H2 (electrolysis). For example, in July, Shell and Eneco were awarded a tender to create a wind farm-powered green hydrogen hub.9
On the technology side, floating solutions can unlock additional upsides. They address the largest technical potential of offshore wind (72 percent of offshore wind’s technical potential is in deepwater) and higher load factors, driven by better wind conditions. In addition, floating solutions enjoy better acceptability and reduce usage conflicts with other sea activities, such as fishing, coastal navigation, and recreation. However, several challenges are yet to be addressed, including the high upfront cost and long project timeline, the infrastructure needed to assemble turbines, and full-scale testing and demonstration (coping with pitching and rolling, resisting harsher weather conditions, and handling cable complexity). The design of floating solutions is also still at an early stage of development.
Increasing competition and key players’ strategic moves
The offshore wind landscape is becoming more crowded with several new entrants along the value chain. While traditional players are pursuing aggressive growth to stay ahead of the game, solid new entrants are reshaping the offshore wind landscape.10 The net-zero boom hit the oil and gas majors in 2020, with Equinor followed shortly by most peers. To support their net-zero targets, oil and gas operators are walking the talk with several offshore wind initiatives launched over the past year (see figure 3).
On the project development side, traditional oilfield services and engineering, procurement, and construction (EPC) players are capitalizing on their offshore capabilities and diversifying into offshore wind (see figure 4). Traditionally, oil and gas EPC had been marginally involved in offshore wind projects as subcontractors for specific activities with limited scope, such as installing foundations for pilots or small wind farms. Now, they are repositioning in the value chain to deliver larger, more complex project scope—from subcontracting for large wind farms to taking on engineering, procurement, construction, and installation (EPCI) roles for a defined project scope. In the future, the role of EPC players may evolve to deliver turnkey projects for a full wind farm, with examples so far only seen in Asia.
Potential supply chain bottlenecks
Delivering the potential will most likely stretch the value chain, with bottlenecks for turbine production and logistics. The first question will be about whether original equipment manufacturers (OEMs) have the capacity to expand production to meet demand. Over the past several years, OEMs delivered an annual installed capacity of about 7 MW, but demand will grow to about 20 to 30 MW per year until 2030 (see figure 5). This gap could be even wider depending on OEMs’ financial situation. In parallel, high demand in marine logistics (offshore vessels) could create scarcity and tension on prices.
How to win the new gold rush
As discussed, offshore wind energy is a strong candidate for massive growth in some regions. However, an array of market dynamics are creating tensions that are impacting the value chain and creating potential bottlenecks that could impact the overall outcome of projects. Winning the new gold rush will require taking a systematic and collaborative approach.
Choose your battles
The first priority is to identify the sites that have the highest strategic value for your objectives, including growth targets, the portfolio, and the footprint. It will also have implications for local factors, such as grid connection technologies, bidding processes and contracts, merit order, support mechanism, and time to operations, as well as for regulations, such as the Urban Planning Code authorisation for building turbines of more than 12 MW.
Bidders will need to master the contracting process across countries and regions, including understating the prerequisites and differentiating elements to win the bid. The competition is getting tougher. For example, in the Dunkirk wind-farm award, the top five bidders all scored very closely in the tender criteria, with a slightly bigger difference in the bid price: €44 per MWh for the winning and between €47.5 and €51 per MWh for the others.11
Streamline the wind-farm delivery model
Delivering much larger and more complex wind farms requires moving away from the traditional master–servants project development approach with its many siloed interfaces. Collaborative design optimisation could significantly reduce costs and fast-track the time to market. Offshore could unlock significant value by taking advantage of lessons learned from other industries, such as automotive, aerospace and defense, and electronics. While the oil and gas industry has traditionally struggled to do so, offshore wind has the features needed to be successful, with strong standardisation potential and flexibility for lean design (lacking heavy legacy specifications).
A new delivery approach also requires new business models and new ways of working. Strategic alliances are a win–win for operators, OEMs, and EPC to tackle the following elements:
Improve the project economics by working together to address large cost areas, taking on the full envelope of costs and seeking to bring it down as opposed to traditional sourcing requests for proposals (RFPs) that are focused on price and likely to increase with change orders.
Reduce cycle time by accelerating execution and avoiding RFP and tender processes.
Develop technological synergies with contractors by engaging them in advance to elaborate on designing an optimal solution.
In a capacity-constrained environment, strategic alliances also offer opportunities to secure material and services while giving suppliers certainty about revenues. Oil and gas players (operators and EPC) can also capitalise on their strong offshore experience.
Repurposing assets and reskilling the workforce requires a new cross-business portfolio view and management, such as multipurpose vessels serving oil and gas platforms and wind farms, and talent management, such as sharing resources across oil and gas and wind projects.
Achieve operational excellence
Operators will need to assess and extract the wind farm’s true potential. With more pressure to reduce costs and with subsidy-free bids becoming the new norm, operational excellence is paramount to maximising profitability.
Smart operations are a must to optimise both the top and bottom line by considering a broad set of parameters, such as revenues, cost of spare parts, market dynamics, regulations, turbine downtime, weather forecast, and operations and maintenance costs.
Advanced analytics could allow for precisely predicting the impact on costs and revenues to inform decision-making and optimise profitability.
Predictive maintenance enables striking the right balance between corrective and preventive costs, including the costs of failure, reducing total expenditures, and increasing availability and reliability.
Digital twins can extend the life of assets by combining operational and physical inputs, such as inspection information and mechanical characteristics, with advanced simulation, such as fatigue analysis, inspection plan, and predictive maintenance. In addition, using digital twins in the engineering phase could optimise design and reduce material and installation costs.
Squeeze financial value
Finally, operators will need an integrated approach to optimise their financial value.
Value pools. The boundaries between sourcing, trading, and production are blurring, driven by demand response, batteries, and decentralised generation. New value pools are emerging from all parts of the chain.
Contractual and physical flexibility to match supply and demand and balance the grid, such as capacity contracts, virtual storage, and options and derivatives, drives portfolio optimisation and provides growth opportunities.
The operating model needs to adapt to allow an integrated steering of power assets, such as renewable, storage, and combined cycle gas turbines, and consumption, such as internal and external, by location, minimum and maximum load, and steerable load.
Decision-making. With renewable energy growth, the power market is becoming more weather-driven, and demand for flexibility is moving toward the short term. Consequently, the speed and quality of decisions are paramount to ensure smooth alignment between power assets and consumers, such as scheduling and re-dispatching processes with assets and consumers to avoid imbalance costs and capture market opportunities as well as increased frequency balance to manage renewables generation unpredictability. To support quality and efficient decision-making, information system infrastructure and data management are crucial to achieve the following:
Combine massive amounts of data in real-time.
Develop robust data analytics for optimization (analytical models with accurate signals, confidence estimation, and visualisation).
Define the trade-offs for result accuracy versus computation speed.
Ensure seamless interactions between independent information systems and functionalities.
Define the trade-offs between multiple performance models versus a full integrated model, such as individual turbines, wind farms, and country-level portfolios.
Facilitate internal and external data exchanges.
Get set for the race
Think big and act fast
The economies of scale for large wind farms (more than 1 GW) is the new norm for cost-competitiveness. All players are moving.
To leapfrog the competition and not get left behind, it is imperative to quickly screen and target opportunities. Where to start will depend on players’ maturity. In any case, it is important to accelerate the learning curve. For new entrants, this may mean starting with smaller roles or a smaller scope and quickly transitioning to larger, more complex ones.
Choose your partners, and nurture the collaboration
Winners will play a team game with strategic alliances and collaboration across the value chain. This will ensure delivery capacity, such as turbine production, installation, and footprint as well as best-of-breed skills, such as technology and knowledge while accelerating innovation. A cultural fit and collaboration framework will be essential to success.
1 European Commission Climate Action Tracker
2 Intergovernmental Panel on Climate Change 2018 special report, International Energy Agency, International Renewable Energy Agency
3 International Energy Agency World Energy Outlook 2019
4 Aurora Energy Research, offshoreWIND.biz, European Commission electricity market reports, Kearney Energy Transition Institute
5 International Energy Agency World Energy Outlook 2019; “Wind energy,” International Renewable Energy Agency
6 International Renewable Energy Agency, Global Wind Energy Council, International Energy Agency
7 “Covid-19 monthly update: 2020’s oil demand recovery slows down, road fuels upgraded for 2021,” Rystad, 12 June 2020; “US offshore wind power spending has oil in its sights,” Financial Times, 7 July 2020
8 International Energy Agency
9 Shell media release, 29 July 2020
10 Company websites, press review
11 Commission de Regulation de l’Energie, Deliberation N. 2019-124
Solar PV industry body SAPVIA (the SA Photovoltaic Industry Association) has applauded the step-change towards reviving generation capacity procurement from the Department of Mineral Resources and Energy and supports the commitment to deliver a secure energy supply from a diverse range of energy sources as set out in the country’s energy plan.
“We are delighted to see solar PV represented in the RMIPPP preferred bidders announcement and congratulate those members who have worked tirelessly to a successful end. With technological advancement, the reduced costs, the scalability and rapid build times of solar PV projects, solar PV should remain a key technology choice in meeting the country’s capacity requirements,” said Niveshen Govender, SAPVIA COO.
“The emergency procurement round showed that crises can spur innovation and action. While there is still room to better research and understand some of the technology choices of RMIPPPP, we welcome the Minister’s immediate follow-up confirmation of the release of the Renewable Energy IPP Procurement Programme Bid Window 5.
“New possibilities will be realised with both PV and PV-hybrid projects playing a role in South Africa’s energy mix. With the commitment to procure 2000 megawatts from PV solar across Bid Window 5 and 6 this year, there is much to look forward to.”
SAPVIA welcomes and strongly supports the changes announced to the Economic Development requirements of Bid Window 5, which will ensure the participation of black women in the ownership of future projects and procurement rounds as well as a more concerted focus on skills development in the energy sector.
“Over the past decade, SAPVIA has taken the lead in driving skills development across the solar PV value chain. Our focus has been on enhancing the skills of our members to create a world-leading sector that delivers socio-economic transformation and upliftment across South Africa.
“Recently, through our Developing Developers program, in partnership with SAWEA, we are working with current and potential developers to give them access to the knowledge and skills needed to take a renewable energy project from initial planning through to commissioning. This grassroots capacity development is well aligned with the department’s move to increase requirements for black women participation.”
“Local manufacturing and content must continue to be prioritised in all future procurement rounds and SAPVIA will work with members to develop local PV value chains so that our members are ready to meet the new requirements of local content in the forthcoming Requests for Proposals.”
The embedded and distributed generation sector is increasingly important both in diversifying our energy mix and contributing to energy security. SAPVIA is encouraged by the DMRE’s moves to enable increased embedded generation and is therefore seeking clarity on the statement on increasing the distributed generation licence exemption cap, and we will continue to engage with our counterparts in government to clarify the details and legislation required for self-generation as well as the licensing and registration regime for embedded generation.
“The Minister has responded to the calls of industry to act quickly and restart renewable generation capacity and we look forward to solar PV playing a role in delivering energy security and powering South Africa’s economic recovery.” Niveshen Govender
Cities can change the game: the fight against emissions and air pollution
Fossil fuel bans jump fivefold in 2020
The pandemic has thrown into stark relief the global battle of cities for cleaner air and a better future. The 2021 edition of REN21’s Renewables in Cities Global Status Report, the only stock-taking of cities’ energy transition efforts worldwide, shows that one billion people live in cities with a renewable energy target or policy,[i] The number of cities that have enforced partial or complete bans on fossil fuels jumped fivefold in 2020.[ii]
For the second year, REN21 takes the temperature of how cities worldwide use renewable energy to battle emissions to prevent air pollution and climate change.[iii] More than half of the global population lives in cities, which account for three-quarters of global final energy consumption.
“With their impact at scale, cities are our best bet to plan, develop and build a renewable future. But all too often their potential for transformation remains massively underused,” says REN21’s Executive Director, Rana Adib. “It’s a tough job to turn low-carbon ambitions into reality in built and densely packed environments. National governments must put money, capacity and above all legislative powers into the hands of local authorities.”
Cities must transition to renewables and set end dates for fossil fuels in all sectors
A critical factor for the success of cities’ climate strategies is to rapidly replace fossil fuels with renewable energy in heating and cooling as well as in transport. These sectors are responsible for the biggest share of global emissions, and they are best addressed at the local level.
The report shows that often, purchasing renewable electricity for the city’s own operations is one of the first steps local leaders take. But according to Adib, this is not enough. “Cities like Hamburg, San Francisco and Shanghai show, the more ambitious they are, the more they think of renewable energy everywhere. They impose strict building codes and renewable energy obligations. But most importantly, they set an end date to the use of gas, oil and coal.”
By 2020, 43 cities had done so and enforced fossil fuel bans in heating and/or transport, five times as many as in 2019.[iv] In total, one billion people – about one-quarter of the global urban population – live in cities with a renewable energy target or policy.[v] “But as inspiring as these examples are,” says Adib, “we are still a far cry from what is needed to curb climate change in time.”
A flavour of clean air and clear skies
Last year’s lockdowns with the sudden disappearance of traffic, the complete alteration of lifestyles resulting in cleaner air and less noisy environments, have given citizens a flavour of how alternatives to packed roads and polluted skies could look.
City leaders are now building on this momentum, moving away from polluting fossil fuels and building clean and resilient energy systems in their place. “Growing citizen support gives Santiago a real mandate to take action against climate change. Our residents demand that the government take bold measures,” explains Isabel Aguilera, Environmental Director for the city of Santiago (Chile).
The race towards renewables is an obstacle course
The Renewables in Cities 2021 Global Status Report also shows that besides emission reductions, many other local benefits await those who take their energy future into their own hands: from the creation of local jobs and welfare to greater quality of life and healthier citizens. “The transition to a zero-carbon economy presents tremendous economic development opportunities for Orlando and the Central Florida region, some that we are already beginning to see stimulate our local economy, improve public health, reduce environmental impacts, and create meaningful high-wage jobs for our residents,” says Mayor Buddy Dyer of the City of Orlando (Florida, USA).
Sometimes, like in recent examples from Japan and the Republic of Korea, city governments can even push national governments to be more ambitious.[vi] But, while the report features encouraging stories from all regions of the world,[vii] the large majority of cities have not yet figured out how to take ambitious action, or they lack the power and resources to do it.
“Provide cities around the world with support”
Even those who seem ready and willing to move forward, run into obstacles. All too often, powerful fossil fuel interests put a stop to cities’ decarbonisation plans.
“It’s a sad fact that wherever in the world cities seek to phase-out fossil fuels, the industry puts a lot of resources into fighting back.
“They take local authorities to court or, as seen recently in the US, convince state policymakers to make it legally impossible for cities to take such decisions at all,” says Adib.
Martina Otto, heading the cities work at the United Nations Environmental Programme, concludes: “There is huge untapped potential. We can both increase the level of ambition and progress in meeting national climate commitments if national and regional governments around the world provide cities with support well beyond the creation of better financial conditions. Getting over territorial boundaries to empower cities means unleashing the power of our strongest allies.”
About REN21 and the Renewables in Cities Global Status Report
REN21 is the only global renewable energy community of actors from science, governments, NGOs and industry. We provide up-to-date and peer-reviewed facts, figures and analysis of global developments in technology, policies and markets. Our goal: enable decision-makers to make the shift to renewable energy happen – now.
The Renewables in Cities Global Status Report is an annual stock-take of the global transition to renewable energy at the city-level. The 2021 edition has been co-authored by over 330 experts and is endorsed by an Advisory Committee of 20 organizations including city networks.
[i] 1,300 cities worldwide have either a renewable energy target or policy in place. Globally, over 830 cities in 72 countries have binding renewable energy targets and around 800 cities have implemented policies to help advance renewables in their cities. See table below for more details.
Selected countries with renewable energy targets, net-zero targets and/or policies in cities
Cities with renewable energy targets
Cities with net-zero targets
Cities with renewable energy polices
Cities with renewable energy targets and/or policies
Share of urban population with renewable energy targets and/or policy (%)
[iii] More than 10,500 cities globally had adopted CO2 emission reduction targets, and around 800 cities have committed to net-zero emissions in 2020 – up sharply from the 100 cities with such commitments in 2019.
[vi] Local governments in Japan have been instrumental in pushing the national governments to commit to carbon neutrality and/or adopt net-zero targets. As part of the Korean Local Governments’ Action Alliance for Carbon-Neutrality, 226 local governments that had already declared a climate emergency by September 2020, pushed the national government to commit to carbon neutrality by 2050.
[vii] Data has been collected on hundreds of cities, ranging from mega-cities to small and medium size cities and towns. The report features specific case studies on: Adelaide (Australia); Palmas (Brazil); Recife (Brazil); Yaoundé IV (Cameroon); Cocody (Côte d’Ivoire); Rajkot (India); North Lombok Regency (Indonesia); Jakarta (Indonesia); Seoul (Republic of Korea); Dakar (Senegal); Cape Town (South Africa); Malmö (Sweden); Tsévié (Togo); Kampala (Uganda); Oxford (UK); Orlando, FL (USA).
Additional case studies that will be provided as supplements are: Vancouver (Canada) and Heidelberg (Germany).
Summary: There are 66 cities worldwide with a proposed and/or passed fossil fuel bans for heating and cooling and/or transport. In total these 66 cities have 67 bans as 1 city has both a ban for buildings and one for transport. (Note: not all of them have been enforced yet). Regarding enforcement: 4 went into force before 2019, 4 went into force into 2019, and 35 went into force in 2020; for a total of 43 enforced in 2020. 20 will go into force in the future. Plus 4 for which there is no known enforcement date. Date of enactment: 11 were voted before 2019, 37 were voted in 2019, and 13 were voted in 2020. Plus 6 for which we have no date; for a total of 67.
Bans and restrictions in buildings
Vehicle bans and restrictions
Year of enactment
Year of entry into force
Australian Capital Territory (Canberra)
Oil and gas heating
Coal boiler, fuelwood in boilers, stoves and fireplaces
MEC David Maynier announces municipalities participating in the Municipal Energy Resilience Project
Here are the six-candidate municipalities participating in the Municipal Energy Resilience Project
17 Mar 2021
When I delivered my Budget 2021 Address in the Provincial Parliament yesterday (16 March 2021), I announced that we will spend R48.8 million over the medium-term and provide a further R20 million in the provincial reserves for the Municipal Energy Resilience (MER) Project in the Western Cape.
I was also pleased to announce that the six candidate municipalities participating in the first phase of the MER Project in this financial year are the:
And, as they are a municipality that has already done excellent work on developing energy resilience, we are also pleased to be collaborating with the City of Cape Town on the MER Project.
We know that load shedding costs the economy about R75 million per stage, per day in the Western Cape.
When it comes to the economy Covid-19 is a “left hook”, and load shedding is a “right hook”, which together often results in a knock-out blow that risks compromising economic recovery.
Which is why we launched the three-year MER Project last year to support municipalities to take advantage of the new energy regulations to generate, procure and sell their own power so that we can become more energy secure in the Western Cape.
The MER Project is spearheaded by our Green Economy unit at the Department of Economic Development and Tourism, who are working in collaboration with the Department of Local Government and Provincial Treasury to enable the development of energy projects and engage with municipalities on multiple fronts.
The procurement of energy at utility and municipal distribution scale, such as bulk energy purchases from Independent Power Producers (IPPs), under conditions of developing and evolving policies and regulations is a complex and challenging task. Municipalities may not have the policies, plans, resources, funding, or procurement expertise to procure wholesale electricity from sources other than Eskom, specifically IPPs.
Neither have all municipalities’ electricity distribution systems been technically evaluated to clarify their readiness to support new electricity generation and energy trading.
To identify the candidate municipalities for the MER Project we conducted a readiness evaluation to determine which municipalities were most equipped and met the conditions required to take advantage of the energy regulations to develop their own power generation projects and also procure power from IPPs.
Now that the candidate municipalities have been announced, we will be confirming willingness and commitment through a Memorandum of Understanding, and then working closely with them in the first phase of MER Project to identify pioneering energy projects and develop a roadmap to roll out the projects.
This process will consider multiple pioneering renewable energy technologies and scales, cost options, scale of investment required, location issues, risks, municipal readiness needs, infrastructure needs, timelines to get capacity onto the grid, transaction and procurement mechanisms and regulatory issues.
Any learnings from projects implemented with the candidate municipalities will be applied to future projects in other municipalities. While this project should enable municipalities to be able to buffer residents and businesses from the impacts of load shedding, they will still continue to be connected to the national grid as we won’t be able to meet 100% of energy demand through renewable energy at this stage.
We will also work closely with national government to explore how the new energy regulations could lead to renewable energy generation projects within municipalities in the Western Cape.
Other projects that provide continued support to all municipalities in the Western Cape include support to develop and revise SSEG feed-in tariff frameworks and feed-in tariffs for solar PV, engagements with businesses to drive take-up of solar PV, support to municipalities to enable wheeling, support to energy sector businesses; the provision of energy technology and cost options to businesses and municipalities; and support to green economy investors in the Western Cape.
The MER Project is just another example of how we are working hard to become more energy resilient in the Western Cape.
AECOM ranked No. 1 by Fortune magazine as World’s Most Admired Company in its industry
Premier infrastructure consulting firm AECOM has ranked No. 1 on Fortune magazine’s list of the World’s Most Admired Companies in their industry. This is the seventh consecutive year that the company has been recognised on the list.
“Leading Fortune magazine’s World’s Most Admired Companies list in our industry highlights our employees’ ongoing dedication, resiliency and innovation in delivering transformative solutions, especially amid the uncertainties of the past year,” comments AECOM CEO Troy Rudd.
“Behind our Think and Act Globally strategy, our professionals deliver exceptional quality services and technical expertise for our clients, building on our strong financial performance and creating value for all our stakeholders.”
AECOM CEO Troy Rudd
Despite the challenges presented by the coronavirus pandemic, last year AECOM continued to deliver to their clients, employees, communities and stockholders, resulting in a strong financial performance that exceeded guidance on nearly every key financial metric. AECOM’s teams mobilised quickly and safely to lead the industry in disaster response and developed innovative digital consulting solutions that continues to increase engagement and streamline processes critical to economic and social recovery.
AECOM’s multidisciplinary approach makes them unique on the continent, ranging from cost management to quantity surveying, engineering and environmental services.
“Adding value to clients by providing them with the necessary solutions to navigate the current crisis has never been more critical.”
Darrin Green, AECOM Africa MD
Significant investment in digital innovation and remote working is enhancing AECOM’s flexibility and adaptability. This includes bespoke tools such as AECOM’s Environmental Engagement platform to streamline environmental documentation and stakeholder engagement. Their Virtual Public Consultation Tool enables virtual community engagement in an interactive online platform.
Together, these solutions provide powerful support to clients managing existing and future projects through the key planning and approval gates. “The end result is a much better understanding of what projects will go forward and where we need to relook at projects in terms of either budgetary constraints or different drivers due to the pandemic,” comments Green.
Additionally, as a leading Environmental, Social and Governance (ESG) firm, AECOM last year continued to partner with clients in advancing sustainable solutions, set their own Science-Based Targets initiative (SBTi), approved emissions reductions targets and launched the Thrive with AECOM initiative to further their commitment to equity, diversity and inclusion.
Fortune collaborated with management consulting company Korn Ferry on the survey of corporate reputations. The survey determined the best-regarded companies by asking executives, directors and analysts to rate enterprises in their own industry on nine criteria; from investment value and quality of management and products, to social responsibility and the ability to attract talent.
IPP & PPA Conference at African Energy Indaba | Do not miss the panel at 11:30 on innovative tariff systems
PANEL 2 – INNOVATIVE TARIFF SYSTEMS TO DELIVER SUSTAINABLE PRICING AND REVENUE
How can innovation in market design and use of new technologies serve to balance the price that African consumers can afford with the revenue and returns needed to satisfy the shareholders of energy supply businesses?
Can Africa move to cost-reflective tariffs or are subsidies still necessary and, if so, how can they be managed?
Lithium-ion batteries offers an electrifying opportunity for South Africa
The global move to low-carbon transportation options, such as electrical vehicles (EVs), brings battery technologies to the fore. This provides unique opportunities for policy makers and local producers to explore South Africa’s competitive advantage in the lithium-ion batteries (LIBs) value chain.
This emerged as a key theme from a study on opportunities to develop the lithium-ion battery value chain in South Africa, initiated by the United Nations Industrial Development Organisation (UNIDO) and the Department of Trade, Industry and Competition (dtic) as one of the deliverables of the Low Carbon Transport project in South Africa. A report on the study, which was conducted by Trade and Investment Policies (TIPS) on behalf of the project, was launched today during a side event of the Africa Energy Indaba.
According to Gerhard Fourie, the dtic’s Chief Director of Green Industries, the report is intended to “feed into the broader debate around low-carbon transport, green industrial development and policy shifts in terms of the development of the EV value chain. The increased prominence of EVs entering the market is mentioned in the report, highlighting battery technologies as an important component of sustainable development. In view of the commitment of government and industry to ensure the country retains the position of the local automotive manufacturing value chain as a key player in the mobility of the future, the study investigated the potential for a South African lithium-ion battery (LIB) value chain.”
Fourie adds that “every stage of the LIB value chain was therefore investigated with the aim of identifying the country’s existing and potential competitive advantage. In addition, the TIPS research team sought to answer a number of questions, such as: can the country develop new capabilities relevant to the battery value chain? Should the country focus on specific segments of the value chain or work to build a complete value chain domestically? And finally, acknowledging that the country has the minerals required for the production of batteries, does South Africa and other African countries have the potential to build on their natural resources to support mining and beneficiation?”
What emerged is that there is a “vibrant value chain”, but not all stages are at the same level of development. The report points out that “mining of multiple LIB-relevant minerals, such as manganese, iron ore, nickel and titanium, is already underway in the country and the region. Mineral beneficiation for battery production, while limited, is also present in the country, with existing pockets of excellence in manganese and aluminium and interesting developments in lithium, nickel and titanium. Importantly, battery manufacturing (off imported cells) and battery refurbishing (second-life batteries) is a booming opportunity with many firms operating in this space, leveraging unique expertise and intellectual property, notably in the development of battery management systems. By contrast, cell manufacturing, while explored at the R&D level, is yet to be proven commercially viable in the country. Similarly, the development of recycling is still early days in the country.”
Identifying where in the value chain South Africa is competitive is critical, so as to channel support and resources into the most sustainable activities. Based on the research, four possible technical pathways are proposed to support the development of the LIB value chain: 1) battery manufacturing 2) mineral refining; 3) cell manufacturing; and 4) battery recycling.
The study noted that developing battery manufacturing and mineral refining are ready for scale-up whilst cell manufacturing and recycling could be explored in the medium to long term, provided they prove to be economically sustainable. The report notes that where there are “key pockets of excellence” (battery manufacturing, mineral beneficiation and mining), efforts and resources should be focused on these activities. TIPS research leader Gaylor Montmasson-Clair stresses that “indeed, the development of the LIB value chain is a fantastic opportunity for South Africa, provided the country invests in its strengths and competitive advantages, rather than unsubstantiated aspirations.”
The study pointed out that “an established LIB industry is instrumental to the local development of both the (renewable) energy and (electric) transport industries.” Hence, ensuring high levels of local content in renewable energy and automotive manufacturing will be dependent on localising the battery value chain as much as possible. In turn, strong partnerships and collaboration between public and private institutions as well as between local and international players is critical in growing the LIB value chain.
According to Dr Blanche Ting, Energy and Low Carbon Coordinator for UNIDO, it was noteworthy that the study also mentions the minerals beyond South Africa, particularly on the African continent. Among SADC are graphite (Mozambique and Tanzania), nickel (Botswana, and Zimbabwe), titanium (Mozambique, Madagascar) amongst others. Potential for regional industrial integration of these minerals notably though the implementation of the Southern African Development Community Industrialization Strategy and Roadmap 2015-2063, and the recent implementation of the African Continental Free Trade Agreement (AfCFTA) should be explored.
In moving forward, the report highlights that aside from identifying where in the entire LIB value chain South African industries are (or could be) competitive, a number of key components, such local testing and certification as well as access to funding for commercialisation of innovations, are required to establish an enabling policy framework for the development of the LIB value chain. In addition, facilitating access to markets, both domestically and globally, and shaping R&D and skills development in line with South Africa’s competitive advantage would play a large part in South Africa succeeding in developing the value chain.
REDZ role in South Africa’s Just Energy Transition
Renewable Energy Development Zones (REDZ) have a key role to play in South Africa’s Just Energy Transition, creating priority areas for investment in the electricity grid and increasing South Africa’s green energy map, by enabling higher levels of renewable power penetration.
In particular, wind developers are investigating the potential for development in the eMalahleni REDZ, despite Mpumalanga not being known for high levels of wind, a challenge that can certainly be overcome with increased turbine hub height.
As the wind industry embarks on a journey of localisation and local economic development, industry players believe that the region can be positioned as a component manufacturing hub, which will further entrench the positive impact on job creation by the wind industry. It is recognised that engagement with the relevant government stakeholders is critical.
“The new eMalahleni REDZ is a huge step toward accelerated economic development in Mpumalanga. As we move to implement the requirements of the Integrated Resource Plan (IRP) 2019, it would appear natural that a portion of the 1600MW per annum should be allocated to the northern region of the country and research has dispelled the myth that wind is not an economically viable option in this region,” said Mercia Grimbeek, Head of Project Development for Enertrag, in South Africa and Chair of the South African Wind Energy Association.
“Through the implementation of national and even regional auctions the area could receive the economic stimulus that it needs and reduce the almost complete reliance on mining generated income to drive and support the economy. Renewable energy such as wind power plants is deployed fairly quickly when compared to other large infrastructure projects. This allows for the economic benefits to flow through to communities in a relatively short period of time not only directly through job creation but also indirectly through manufacturing and supply chain management,” added Grimbeek.
Due to the large number of energy-intensive users, in and around eMalahleni, it is seen as an ideal location to promote private off-taker agreements for the purchase of energy from Independent Power Producers (IPPs).
Hence, the development of the eMalahleni REDZ could be viewed as a perfect partnership between Government and IPPs, further enabling a Just Energy Transition for the benefit of the communities of Mpumalanga.
It is believed that with the provision of a consistent regulatory framework that supports a focused project delivery pipeline, the renewable energy industry would have the opportunity to expand the manufacturing value chain in this REDZ.
“A stable and consistent project pipeline will support manufacturing of components locally, with the added benefit of skills development and training for the local communities. One cannot ignore that the introduction of renewable energy would require a significant amount of skills transfer and human capital investment, so we believe that by expanding into eMalahleni, local communities will be empowered and less reliant on a single industry to provide economic certainty,” concluded Grimbeek.
THOUGHT LEADERSHIP | Llewellyn van Wyk, B.Arch; MSc. (Applied), Urban Analyst
“Son, we live in a world that has walls and those walls have to be guarded by men with guns.”
– A Few Good Men, 1992.
In a court scene in the 1992 movie, A Few Good Men Colonel Nathan Jessup (played by Jack Nicholson) is being cross-examined by Lieutenant Daniel Kaffee (played by Tom Cruise) about the death of a marine at the Guantanamo Bay Naval Base. Goaded on by Lieutenant Kaffee, Colonel Jessup finally loses his temper and retorts with the line quoted above.
While I am not a big supporter of war analogies, it is perhaps apt under the current circumstances as multiple political leaders have referred to the fight against the Covid-19 pandemic as a “war”. Covid-19 will not be stopped by wars, and hopefully, we will not resort to guns as a defense, but standing watch stresses the need for vigilance i.e. keeping careful watch for possible danger or difficulties. Two capabilities are required – anticipation, and response.
David Quammen, writing for the New Yorker, questioned Ali Kahn, formerly of the Centers for Disease Control and Prevention (CDC), on what went so disastrously wrong. Where was the public-health preparedness that he had overseen at the CDC? Why were most countries – and especially the US – so unready? Was it a lack of scientific information, or a lack of money? Kahn’s response was, “This is about lack of imagination.” [i]
The best time to panic, i.e. overreact to a potential pandemic, says Nassim Nicholas Taleb, author of The Black Swan, is shortly after a novel pathogen has been detected.[ii] Unfortunately, at that point, few people have the virus and therefore it does not seem like a threat to the whole community. In hindsight, he concedes, it is perfectly obvious that the extraordinary efforts now being made by individuals and communities across the world to prevent the spread of Covid-19 should have been made in those areas where the virus was first discovered when it appeared.
However, it is natural that authorities do not wish to be criticised for “crying wolf” and, if they are elected officials, beaten at the next election for unnecessarily interfering with the life of the community. But it is precisely what would be called an “overreaction” that might have stopped Covid-19 in its tracks at the beginning. Taleb has previously written about those whose jobs are to make sure that small problems never become large and that some problems never even appear.
Almost without fail commentators are emphasising how unprepared governments were for an event of this kind.
With a few exceptions, most notably South Korea, governments’ failure to act quickly and decisively contributed to the rapid spreading of the disease. In the US the disastrously tardy, inadequate, confused, and (for many citizens) confusing response of the federal government to Covid-19, both before and after the first case, derives from too many factors to list, but David Quammen mentions two: failure to appreciate the SARS and MERS warnings, both delivered by other coronaviruses; and loss of capacity at high government levels, within recent years, to understand the gravity and immediacy of pandemic threats.
The result of that loss is what Ali Khan means by lack of imagination. Almost paraphrasing Jack Nicholson in A Few Good Men, Beth Cameron, a former head of the Directorate for Global Health Security and Biodefense on the National Security Council staff, calls it the absence of “the smoke alarm.” Those in power, she says, who are charged with “keeping watch to get ahead of emergencies” need to smell the smoke and smother the fire while it’s small, As Cameron warns, “You’re not going to stop outbreaks from happening. But you can stop outbreaks from becoming epidemics or pandemics.”[iii]
Of greater concern is that several scientists expressed their alarm at an increasing emergence of the transmission of zoonotic diseases well before Covid-19 emerged. This was highlighted in, among other, a paper published in the Journal of Emerging Infections in 2010 where the authors noted that “current global disease control focuses almost exclusively on responding to pandemics after they have already spread globally.”[iv] Citing the response to the HIV pandemic as an example (it took over 25 years to develop a viable vaccine), the authors argue that this wait-and-see response is inadequate and what is urgently required is the development of systems to prevent pandemics especially given their rapid pace of spread and mutation.
As Jeffrey Sachs puts it, “There are many aspects of any major crisis that are similar in character, in that they require governments to assess the situation with sophistication, to identify options, to come up with strategies, and to implement them. Although crisis management has a lot of common points, the core issues are the capacity of political leaders and their inner team, and the capacity of the institutions of governance – agencies, departments, and ministries – to be able to process information in a timely way and to be able to harness expert advice and evidence in a timely way.”[v]
A similar situation applies to medical research funding: intermittent, stop-and-start funding that is provided only when there is a public health emergency undermines the ability to create capacity for rapid response as new pathogens emerge. Research must be ongoing before, during and after a disease outbreak. Several promising vaccines were in development during the SARS and MERS coronavirus outbreaks – but once infections waned, so did the research funding. Proto-vaccines that could have been useful in developing a rapid response to this novel virus were literally put on ice at the University of Texas and elsewhere – thus handicapping the current development process by many months.[vi]
Dennis Carroll, a former research virologist who led a pandemic-threats unit at the US Agency for International Development for almost fifteen years, believes the global community has a difficult time investing in what many think of as risky.
Spending big money is itself a form of risk, especially if it is public money, even if you are spending it to insure against a greater risk.
What if you spend a billion dollars, or ten billion – small change compared with what Covid-19 is now costing—and the pandemic does not occur during your term in office? “There’s very little appetite for that when the threat isn’t clear and present,”
Carroll said. When SARS happens, when a swine-flu pandemic happens, when an Ebola epidemic happens, political leaders and private donors react with fretful largesse, but when the crisis ends, he said, “we see a total collapse of those kinds of investments.” Homeowners buy fire insurance, governments buy vast armouries of weaponry hoping they will not be used, but there’s reluctance to invest seriously in preparedness against pandemics. “It’s attention-deficit disorder on a global scale,” Carroll said.
Sustained funding is necessary to support the full range of discovery – from elucidating the biology of the virus to developing drug candidates to creating improved systems of care delivery.
Still, some countries fared worse than other countries not because they lacked information or funding, but because they failed to learn the lessons of last outbreaks.
Some governments have been keen to lay all the blame for the virus at Beijing’s door, but while initial coverups and lack of transparency undoubtedly delayed the international response, by February 2020 much of what is known about the virus – including its severity and ability to spread quickly – was common knowledge, and yet countries, at best, still failed, or, at worst, refused, to act.
Authorities and experts were certainly taken unawares by how quickly and widely the virus spread itself, however, multiple experts agree there was also a general sense of complacency among governments in the West that the outbreak was a China – or an Asian – problem, and would not necessarily behave the same way inside their borders. Some of this response is often a “feeling in countries that they might be affected in a different way because their community has a different structure … or that hot weather is going to keep it away, or their community is more spread out.”[vii]
Despite signs, the threat was making its way across the globe, there was a clear pattern of response in many parts of the world – denial, fumbling and, eventually, lockdown. It is especially puzzling that in our globalised world, so few lessons were learned in the early weeks of each country’s outbreak when the chances of containing and stopping the virus were highest. After all, this is one of the key arguments of globalisation protagonists.
There’s a lot to be said for the argument that any government would have been hard-pressed by a crisis of this nature and scale, but there were already clear indicators of what resilience looks like in the face of a global crisis such as this.
Although Asia has been able to start easing lockdown measures quite quickly, (Asia, after all, has been dealing with the coronavirus since late 2019, so governments have had longer to respond), the situation has grown increasingly dire in the West. While considerable attention has been paid to China’s initial response to the virus, anger is growing within countries over their government’s failure to respond when the alarms went off.
Rick Bright, who filed a whistle-blower complaint after being removed from his position as head of the agency in charge of the pandemic response, testified for just under four hours before the House Committee on Energy and Commerce’s health subcommittee. In his testimony he warned there is still no “master, coordinated plan” and noted that a “comprehensive strategy” was needed to combat the coronavirus pandemic that included widespread testing, tracing and ongoing efforts to “develop a cure,’’ as well as what to do with a vaccine once one is developed.[viii]
In the United States, a national shortage of diagnostic kits for the emerging coronavirus meant that only people who had recently visited China were eligible for testing. Even as beds began filling in Seattle with cases of flulike symptoms, doctors were unable to test them for the new disease, because none of the sufferers had been to China or been in contact with anyone who had. For nearly a month, as patients complained of aches, fevers, and breathing problems – and exhibited symptoms associated with Covid-19, such as “glassy” patches in X-rays of their lungs – none of them were evaluated for the disease. Calls to implement life-saving social distancing measures in the United States faced “a lot of pushback.”[ix]
Consequently, nationwide social distancing guidelines were not put in place until 16 March despite the country’s first case being recorded on 15 January, and the first signs of “community spread” detected in late February.
As noted by David Quammen, author of unsettling 2012 book, Spillover, which warned how (as we continue to disrupt the natural world) viruses are increasingly spreading from wild animal populations to humans, has not been surprised. He notes how the lack of preparedness is the only thing about this whole situation that has surprised him. “I didn’t have any illusions that the people who control the wheels of power and government were listening carefully to the scientists, but I thought they were listening at least enough to have some preparedness. And in this country, of course, I knew that [President] Trump was trying to defund the Centers for Disease Control as much as he could and had gotten rid of the key people on the National Security Council who were in charge of pandemic preparedness” he notes.[x] “Still, I am surprised at how unprepared we’ve been and how badly we, meaning this administration but also state governments, have managed this thing. It’s appalling” he concludes. Ultimately the lack of a timeous response cost the lives of at least 36 000 people.[xi]
The UK too dragged its feet on taking concerted action, only instituting lockdowns and a stay-at-home order in late March, two months after its first case was recorded. In the UK there is a growing scandal over, for example, the lack of protective gear for frontline medical workers. In the United States, some nurses had to resort to cutting makeshift protective clothing out of black rubbish bags. Both countries have also struggled to test enough people, with the US suffering delays due to the release of a flawed test that had to be corrected, while the UK lagged behind many of its European neighbours forcing people to order testing kits through the mails. The European Union’s chief scientist resigned over the bloc’s response to the virus.
In Asia, there is a growing sense of astonishment that the long lead time many countries elsewhere had was not better used. Unfortunately, responses to crises are equally shaped by experience, regardless of how much we try to look beyond them. From the outset, many saw the current pandemic as a rerun of SARS, from its emergence in China to that government’s apparent attempt at a coverup, to how it spread through Asia. The two viruses are related and have similar symptoms, but the novel coronavirus has long overtaken SARS in terms of death toll and spread. Nevertheless, an inability to look beyond SARS may have negatively shaped responses. Complacency, combined with calls to preserve the economy at all costs, appears to have caused governments to refuse to see what was staring them in the face, or being shouted in their ears, by increasingly desperate scientific advisers.
Still, while learning from mistakes is useful, learning from success stories is equally valuable.
Despite the pandemic hitting Europe hard, in Germany, with more than 100 000 people infected, the percentage of fatal cases has been remarkably low compared to those in many neighbouring countries. Much of this can be attributed to their response, which included the testing of far more people than most nations. That means it catches more people with few or no symptoms, increasing the number of known cases, but not the number of fatalities. The testing has included medical personnel: medical staff, at particular risk of contracting and spreading the virus, are regularly tested. To streamline the procedure, some hospitals have started doing block tests, using the swabs of 10 employees, and following up with individual tests only if there is a positive result. Health authorities also plan to roll out a large-scale antibody study, testing random samples of 100 000 people across Germany every week to gauge where immunity is building up.
An important key to the success of broad-based testing was that it did not cost the patients anything, a notable difference with the United States where individuals had to pay for the tests in the first several weeks of the outbreak. Regarding testing and tracking, Germany learnt quickly from the strategy that was successful in South Korea. Germany also learned from getting it wrong early on: it is now recognised that the strategy of contact tracing should have been used even more aggressively.
Germany benefitted from a robust public health care system: for example, hospitals have expanded their intensive care capacities across Germany for some time. And they started off a high base. Germany projected a need of about 12 000 beds at the peak of the outbreak according to projections from the Institute for Health Metrics and Evaluation. Crucially, it has over 147 000 beds, more than 10 times it needed.
Beyond mass testing and the preparedness of the health care system, many also see Chancellor Angela Merkel’s leadership as one reason the fatality rate has been kept low. As an academic stated in Germany, “Maybe our biggest strength in Germany is the rational decision-making at the highest level of government combined with the trust the government enjoys in the population.”[xii]All told there are significant factors that have kept the number of deaths relatively low, epidemiologists and virologists say, chief among them early and widespread testing and treatment, plenty of intensive care beds and a trusted government whose social distancing guidelines are widely observed.
Taiwan, with a population of around 24-million people, had, by 15 April, recorded just over 390 cases and six deaths, and on the same day reported no new cases at all. It managed to achieve that without implementing severe restrictions, like lockdowns, or school and nursery closures. In terms of its death toll, at least, Taiwan does not have much of a curve to flatten, more like a stepped line. Compare this to the United States which had reported over 60 000 deaths at the same time. Adjusted for population size, a level of Taiwan-like success could have meant just 83 deaths in the US. Among the early decisive measures taken was the decision to ban travel from many parts of China, stop cruise ships docking at the island’s ports, and introduce strict punishments for anyone found breaching home quarantine orders.
In addition, Taiwanese officials also moved to ramp up domestic face-mask production to ensure the local supply, rolled out island-wide testing for coronavirus – including retesting people who had previously unexplained pneumonia – and announced new punishments for spreading disinformation about the virus. Taiwan also went big on the use of big data and technology. It successfully merged national health insurance data with customs and immigration databases to create real-time alerts to help identify vulnerable populations. Having a good health data system helps with monitoring the spread of the disease and allows for its early detection. Critically again, although Taiwan has high-quality universal health care, its success lies in its preparedness, speed, central command, and rigorous contact tracing.
New Zealand, another government that has been praised for its handling of the pandemic, was also faster to introduce restrictions and widespread testing than the United States or Great Britain although not without several significant challenges. Not only was there an apparent shortage of personal protective equipment (PPE), the greater threat lay in a capacity shortage to test and contact trace.[xiii] While New Zealand had a stockpile of 24 886 kits, at the rate of testing that would have lasted only a fortnight. The shortage was due to a lack of specialised swabs used to collect mucus samples from the back of the nasal passages. However, the main global supplier of these swabs was a factory in Italy that was already struggling to meet local demand, creating a weak link in the supply chain that appeared at the time to potentially be the difference between New Zealand having a chance of containing Covid-19 or not. A further weakness in the supply chain became evident: disruptions to air freight undermined the ability to get aircraft to transport the swabs. Fortunately, the aircraft, and subsequent orders, were able to get through and make the crucial deliveries. However, reforms had to also be brought into a system that was found to be already overextended to enable the scale of testing and contact tracing required.[xiv]
In Cuba, its public health infrastructure supported community workers to identify vulnerable citizens and support their isolation early on, averting the overwhelming pressure on hospitals, staff and equipment that has characterised situations in either northern Italy or New York.
Iceland’s prolific approach to testing has enabled its government to keep the economy moving and keep the rate of infection down at the same time.
In all of these cases, the ability to respond has been supported by a long-standing commitment to investment in reliable broad public infrastructure — healthcare and the universal provision for basic human needs like housing, energy, sanitation, water and food. These are the structures that make a lockdown event viable in the first place. Where such structures have either been compromised by underinvestment or do not exist at all, a collective vulnerability has been glaringly exposed.
The lessons that become abundantly clear from the above are be prepared; be quick; test, trace and quarantine; use data and technology; be aggressive; get the private sector involved; act preventatively, respect privacy; learn from the past; increase testing as restrictions ease; build capacity in the health system; and funding for medical research must be sustained and predictable.
The clear message is: the precautionary principle applies whenever we are faced with problems that have the potential to cause systemic ruin. In future we will have to “overreact” and panic early to contain such potential pandemics. You may never know if you are overreacting, but you certainly will know if you have under-reacted. That could force us to do that right thing – even when the right thing seemsextraordinarily out of proportion to the risk – in order to prevent a massive problem that is many orders of magnitude worse that the inconvenience and economic loss associated with the early preventative steps taken.
With over a third of the world’s population at one time or another been shut away at home, the big question is what next. An opinion piece in the Economist makes a compelling case for dealing with this next phase. It argues that it is hard to think of any policy ever having been imposed so widely with such little preparation or debate. It argues that closing society was not a thought-out response, so much as a desperate measure for a desperate time. While it has slowed the pandemic, it has done so at a terrible price. Now as governments seek to put lockdowns behind them, governments are not thinking hard enough about the costs and benefits of what comes next the article argues.[xv]
Lifting lockdowns risked a second wave – and that is evident now. To limit the risk, it is suggested requires an epidemiological approach that focuses on the places and people most likely to spread the disease. An example is care homes, which in Canada have seen 80% of all the country’s deaths even though they house only 1% of the population. In Sweden refugees turn out to be high-risk, perhaps because several generations may be packed into a household. So are security guards, who are often elderly and are exposed to many people in their work.
For this approach to succeed at scale, you need data from tests to provide a fine-grained picture of how the disease spreads. Testing let Germany rapidly spot that it had a problem in its slaughterhouses, where the virus persists longer than expected on cold surfaces. Likewise, South Korea identified a super-spreader in Seoul’s gay bars. Without testing, a country is blind. Armed with data, governments can continuously refine their policies.
Some are universal. Masks were once thought ineffective, but in fact help stop the spread of the disease. Like handwashing, they are cheap and do not impose hidden costs. However, closing schools’ harms children and stops parents from working. In contrast with flu, it turns out, the benefits to health are not especially great. Schools should reopen, under conditions that lower the risk to teachers and vulnerable pupils.
Too many governments failed to spot what was coming, but then did what they could. In the much longer second phase they will have no such excuse. They must identify groups at risk; devise and enact policies for them; explain these so that vulnerable people change their behaviour without becoming scapegoats; provide vital infrastructure; and be ready to adapt as new data come in. This will sort countries where the government works from those where it does not. The stakes could not be higher the Economist concludes.
So, what happens after the virus has been contained (it will not be eradicated)? Complacency and apathy is what worries Brenda Ang from Tan Tock Seng most. Her concern, mundane but crucial infection control measures, like the assiduous hand washing and wiping of doorknobs with alcohol – can lapse after a crisis as people become complacent and begin to believe that no new bugs exist. As for the larger lessons, beyond the outbreak locale, understand that there is no point in protecting your own turf. Infectious diseases are globalized, or, as Ali Kahn puts it, “a disease anywhere is a disease everywhere.”[xvi]
One of the implicit assumptions about western capitalism has always been that wealth was what would allow a democratic government to provide for the public during good times, and to protect it from harm during the crisis.
Sung notes that the pandemic has altered this view and points to the example of the U.S. and that of the Indian state of Kerala to show that wealth is not a sufficient condition for a good government response. He argues that it is not even a necessary one. Kerala, he argues, showed that three things matter: one, does the state actually have the ability to do something when a crisis like COVID-19 happens; two, even if the state can do something, does it actually do it when it needs to; and three, has the state been exposed to a crisis of this sort before?[xvii]
Lastly, ponder this: Taiwan, Germany and New Zealand have received accolades for their impressive handling of the coronavirus pandemic. They are scattered across the globe: one is in the heart of Europe; one is in Asia and the other is in the South Pacific. But they have one thing in common: they are all led by women. [xviii]
Read more in Green Economy Journal: Is Covid a salvo from Mother Nature?
[iv] Pike, B., Saylors, K., Fair, J., Le Breton, M., Tamoufe, U., Djoko, C., Rimoin, A. and Wolfe, N. 2010. “The Origin and Prevention of Pandemics.” In Journal of Emerging Infections, CID 2010:50 (15 June), p1636-1640.