For a country that could be one of the world’s fastest-growing economic hubs, South Africa’s economic growth has slumped because of our energy issues. As a young South African, I am worried about the future. It has been more than two (2) months since President Ramaphosa made an urgent speech to address the country’s deepening energy (and economic) crises, yet since then, load-shedding has gotten worse and electricity prices continue to increase to unaffordable heights, with economically marginalised communities already having to choose between buying food other necessities or electricity. And sadly, in a blow to the country’s just energy transition efforts, it seems we will not likely see any significant RE generation capacity added to the grid any time soon, since many of the proposed bids in REIPPP BW 5 have failed to reach financial close (due to changes in input costs.)
While we are seeing some movement toward the just transition, through the work of the Presidential Climate Change Commission, the change is not happening fast enough. The State – through its various departments – should be at the forefront of pursuing the energy transition, which is our best chance to resolve the energy crisis, while also addressing climate change. This means supporting more energy projects that focus on clean technologies, by removing the cap/limits on the RE allocation in the IRP. This is the expected change we want to see including a clear allocation of embedded generation and subsidization for communities to install solar panels. Additionally, finance solutions should be provided for renewable energy across the value chain. Funds for this can come from the JETP or Carbon Tax Fund. The development of energy infrastructure must be a result of increasing productivity and economic activity for job opportunities in facilitating the Just Energy Transition.
Prioritising the improvement of South Africa’s energy supply is key to unlocking further economic growth and social development. Therefore, the President’s plans to ramp-up renewable energy and storage must be more robust. In addition to the positive environmental and social spin-offs, which are in line with a just transition, this can arguably lead to successfully addressing the energy crisis.
However, I am concerned about the President’s talk of a single point of entry for all energy project applications, to ensure coordination of approval processes across government. While cutting back on red tape, to speed up renewable energy procurement, is good news, I believe that relaxing local content rules sets a worrying precedent. While it may bring new energy online quickly, what impacts might be expected from a scaled-back regulatory environment? And what are the consequences for our communities, in terms of the potential for local ownership? It is critical that we ensure that local content is strengthened over time, as this is where a lot of the job creation and economic empowerment should come from.
While lifting license requirements for embedded generation will result in increased renewable energy uptake, without more progressive policies, to ensure that more renewable generation projects are socially owned, these opportunities will likely be dominated by the private sector. If you consider feed-in tariffs, for instance, which could be a good economic opportunity for those grassroots communities who are most in need, but since they are less able to afford solar panels, this will be a benefit almost exclusively available to the middle and upper classes.
However, I am curious to see how this will all work, especially considering that over the next year, Eskom plans to increase the budget for critical maintenance of its failing and old equipment, when it should be extending and updating the grid to include microgrids that allow decentralised electricity solutions to come online, as the power sector globally is shifting toward decentralisation.
Another point of concern is government’s push for gas (as part of a just transition), with the President and the Department of Mineral Resources and Energy (DMRE) speaking quite positively about it. However, my concern is that this may lock communities into expensive, air polluting, and climate change-causing gas. However, the silver lining is that gas procurement will only be necessary for later years, from around 2030, buying us time to explore other innovative technologies.
While promises are all good, the question is, will these really be delivered? It has now been two months, since the President created the National Energy Crisis committee – chaired by the Director-General (DG) in the Presidency, with DGs from all relevant departments – but the blackouts are worse than ever. As a young South African, I am so disappointed with Eskom, the DMRE, and others that have failed before, on so many fronts. Can you blame me for being sceptical? I’m not so sure that we should expect a sea change here, not unless the President somehow manages to get his people working together effectively, which seems like a long shot.
In our communities, the energy crisis is all anyone talks about. People want to know exactly how the government plans to ensure the successful facilitation of the Just Energy Transition, so that it benefits the social, environmental, and economic futures of all South Africans. Will we see genuine implementation of the plans to ensure that it effectively deals with South Africa’s energy crisis? And how will these be implemented? If South Africa hopes to have a successful energy transition, the people on the ground must know where they fit in, and government must ensure that it is in fact socially inclusive and leaves no one behind.
Bongani ka Mthembu is a member of Grassroots for Climate Action, a community-driven initiative that aims to amplify community voices on South Africa’s ‘just transition’.