SA going green can lift growth and job creation

SMART grids, clean power and efficient metering are among the topics to be discussed at the African Utility Week conference to be held in Cape Town from Tuesday, so it is clear that green issues are now very much part of the mainstream. But can doing business in a way that does no harm to the environment also be good for companies in the utility sector? And can jobs be created?

We can learn a lot from Denmark. As I discovered on a recent visit, the Danes have made extraordinary progress in reducing their energy usage and switching to renewable energy, primarily wind power. And the powerful Danish economy has continued to grow.

By 2020, Denmark intends to draw 35% of its energy mix from renewable sources. It wants the energy and transport sectors to be fully transformed by 2050.

It was a government led by Social Democrats that shook up the state power utility in Denmark in 1999. The Danish equivalent of Eskom was replaced by separate production and distribution companies. A bill to achieve something similar in SA, the Independent System and Market Operator Bill, has been put on ice by the African National Congress.

There is a high degree of political consensus in Denmark about the need to adopt green policies, and big business is on board. Despite high taxes and a strong social democratic tradition, it is the private sector that drives growth in the utilities sector. There are 17,000 jobs in the Danish wind sector, which in 2012 had a turnover of R160bn. Green exports hit $5.8bn in the same year, according to Ivan Høj Nielsen of the House of Green, Denmark’s green industry showcase. "Green business is good business," he says.

By way of example, one of Denmark’s water technology companies, pump manufacturer Grundfos, had a turnover in 2012 of more than R45bn. Grundfos director Niels Fielsøe Petersen says: "Our biggest growth is in emerging markets and this is reflected in the number of new staff that we have been hiring overseas." SA is part of the region that is growing fastest — "in excess of 25%". The firm’s Bedfordview office employs 110 people.

One of the most interesting aspects of the Danish green growth scenario is how this immensely rich country is providing green — and profitable — solutions in much poorer countries. A think-tank in northern Denmark called access²innovation pools expertise and helps companies find ways to commercialise solutions to social problems.

When the Worldwide Fund for Nature noted that parts of a forested area in the Kasese area of Uganda were being depleted for firewood, Danish company System Teknik built a solar mini-grid to power the village.

Jacob Ravn, the head of the secretariat of access²innovation, is upbeat. "I know that if you invest one Danish krone you will get a return of three kroner."

Back in SA, the CEO of Accelerate the Cape, Chris Whelan, has put his finger on exactly this aspect of sustainability. With SA’s biggest challenges being in the fields of energy, water and food, he notes that technical solutions are not enough.

Says Whelan: "If we cannot commercialise our solutions, we run the risk that they are not adopted — design for its own sake is not useful."

These questions are at the centre of Danish thinking on green issues. "Value chains" and the "circular economy" were the buzzwords as our group of African journalists travelled around the country, visiting everything from a 70,000-pig farm producing biogas to a wind turbine-testing centre with a world-record 75m blade.

SA’s Renewable Energy Independent Power Producer Procurement programme has attracted tens of millions of rand in investments, and solar and wind projects are moving quickly to completion. The obvious roadblock to a really green future in SA is a heavy reliance on coal, but some municipalities are introducing green strategies and the National Development Plan has a chapter on the subject.

But tens of thousands of RDP houses are still being built with no gutters, so no run-off water can be saved or used. This is the opposite of joined-up government.

The social need for water is great. Gutter and water tank businesses could provide long-term jobs and there might be a market for excess water.

Denmark has shown that a green approach can create growth and jobs, and solve social problems profitably.

• Young travelled to Denmark to study that country’s Green Growth Strategy as a guest of International Media Support.