Value, Power, and Embeddedness in the South African Wind Turbine Towers Manufacturing Sector: Implications for industrial policy
South African wind turbine manufacturing could enable the country’s renewable energy transition to support industrial development, technological upgrading, decent work, and greater domestic value creation. However, expanding renewable energy capacity does not automatically ensure that South African firms, workers, and communities secure lasting economic and social benefits.
This background paper by James Musonda examines South Africa’s wind turbine tower manufacturing sector through the concepts of value, power, and embeddedness. It explores how production networks operate, which actors control their most valuable activities, and what industrial policies are needed to deepen domestic participation.
South Africa has successfully expanded its renewable energy capacity and created opportunities for local firms in manufacturing, supplier development, installation, and employment. Nevertheless, much of the sector’s higher-value activity remains controlled by multinational original equipment manufacturers. Technology development, product design, engineering, intellectual property, and strategic decision-making are still concentrated within global lead firms.
Public procurement frameworks have also frequently prioritised the lowest price. This gives cheaper imported components an advantage over locally manufactured alternatives and limits the opportunities available to domestic producers. While localisation has expanded participation, it has not fundamentally transformed how value is distributed within the wind energy production network.
The paper argues that conventional measures of success provide an incomplete picture. Indicators such as local content expenditure, electricity generated, carbon emissions avoided, Broad-Based Black Economic Empowerment spending, and “job-years” may record participation without showing whether South African firms have developed productive capabilities or whether workers have secured stable, decent employment. These measures also provide limited insight into technological upgrading, employment duration, gender equity, or the retention of value within the domestic economy.
Power within the sector is unevenly distributed. Multinational manufacturers and large project developers exercise considerable control over technology, markets, suppliers, and production networks. Public institutions shape procurement, regulation, financing, and industrial policy, while financial institutions influence which projects and firms receive support. Trade unions, communities, business associations, civil society organisations, and coal-sector interests also seek to shape the transition, although their priorities and influence differ.
The benefits of localisation further depend on how firms are embedded in global, domestic, territorial, and social networks. Strong local relationships can enable learning, skills development, supplier growth, and technological upgrading. Shallow localisation, however, can reproduce dependence, insecure employment, gender inequality, and limited community benefits.
The paper calls for a more ambitious industrial strategy. This should include predictable procurement pipelines, stronger localisation and B-BBEE policies, investment in technical skills and domestic research and development, and improved coordination across energy and industrial institutions. Skills development should target host communities, while domestic and regional production linkages should be strengthened.
Industrial policy must ultimately measure more than expenditure or installed capacity. It should assess whether South Africa is retaining value, building productive capabilities, creating secure employment, advancing gender equity, and developing a wind manufacturing industry able to support an inclusive and sustainable energy transition.
About the project
This publication is an output of Advancing a Just Energy Transition: Localisation, Decent Work, and Sustainable Livelihoods, a multi-country research project examining the energy sectors of Ghana, Kenya, and South Africa in the context of global decarbonisation. The project investigates how localisation, decent work, gender equity, SMME participation, and sustainable livelihoods can be embedded in renewable energy production networks to strengthen local manufacturing and avoid reproducing unequal global economic patterns.