Sector Overview: Energy

The Light At The End of The Tunnel Could Come From Renewable Energy.
Is South Africa Ready?

by Sinazo Mkoko

It was in November 2021 when the South African government announced that President Cryil Ramaphosa had joined other leaders in announcing a historic partnership with the governments of France, Germany, the United Kingdom and the United States, as well as the European Union, to support a just transition to a low carbon economy and a climate resilient society in South Africa.

Through the Political Declaration issued to establish this partnership, it was stated that partner countries will mobilise an initial $8.5-billion over the next three to five years through a range of instruments, including grants and concessional finance, to support the implementation of the revised NDC through a just transition to a low carbon and climate resilient economy.

President Ramaphosa stated: “Climate change is an existential challenge that confronts us all, and South Africa is committed to playing its part in reducing global emissions. The partnership that we have established today is a watershed moment not only for our own just transition, but for the world as a whole. It is proof that we can take ambitious climate action while increasing our energy security, creating jobs and harnessing new opportunities for investment, with support from developed economies.”

The Declaration added that at the heart of this partnership was the importance of a just transition, which includes support for workers and communities affected by the transition away from coal and enables the creation of quality green jobs. “For the transition to be just, decarbonisation must be implemented in a manner that promotes and sustains employment, livelihoods and economic inclusion for historically marginalised communities and sectors of our society. A joint task force will be established to take forward the partnership over the coming months.”

The Political Declaration on the energy transition in South Africa included recognising that South Africa requires a transition that is just, especially as there are several important sectors of its economy that may otherwise be negatively affected, including mining, energy, manufacturing and transport and the need to establish an ambitious long-term partnership to support South Africa’s pathway to low emissions and climate resilient development, to accelerate the just transition and the decarbonisation of the electricity system, and to develop new economic opportunities such as green hydrogen and electric vehicles amongst other interventions to support South Africa’s shift towards a low carbon future.

In June 2022 eskom announced that the power utility had planned to lease land in the Mpumalanga province to renewable energy producers to feed production into the grid. Former Eskom Chief executive Officer, Andrè de Ruyter, said that they had selected 18 companies to lease land for the development of renewable energy projects.

The current bids cover about 4 000 hectares (ha) out of the total 36 000 ha available under the programme, according to the power utility. “This shows what can be achieved with reduced red tape and the impact of the liberalisation of the energy sector. This additional capacity will be added to the grid without any cost to the taxpayer,” - Andrè de ruyter.

The Climate Business Initiative (CBI) reported in Climate Pathways and a Just Transition for South Africa report that decarbonising South Africa’s energy supply requires an unprecedented rollout of renewables. The CBI emphasised how renewable energy is critical to drive a 60% reduction of emissions in the country.

Sources: Energy | The Presidency | NBI SA Gov | World Bank | Just Share