Renewables in South Africa: The Need for a Developmental Case

What is the possibility of a similar ‘Energy Transition’ occurring in South Africa? In contrast to the developed and highly industrialised Germany, South Africa is a developing country, struggling with high levels of poverty and inequality. Its energy landscape is dominated by coal, and it needs to meet an anticipated fourfold increase in electricity demand within two decades. Renewables currently contribute less than 1% to total electricity production, and are targeted to rise to only 9% by 2030. Perhaps most significantly, there are no clear signs of the government moving beyond a rhetorical support for substantial renewable energy in its energy and economic policies. Conversely, plans for a new fleet of nuclear power stations to meet the rising electricity demand are due for sign off by the end of this year.

There are a number of ingredients, which, from a South African perspective appear key to having enabled the writing of the Energiewende into policy in Germany. First, environmental issues are voting issues in the country; its citizens are engaged in the issue of how their energy is provided. Further, many Germans are willing and able to pay the current premium tariff to support renewables. Subsequently, the Energiewende enjoys support across the political spectrum, thereby ensuring its survival through election cycles. Second, there is a plausible economic case for the Energiewende’s implementation. The country has an advanced manufacturing base, capable of responding to a major stimulus for rapid renewable energy technology innovation and diffusion, thereby creating jobs and dominating this growing sector internationally. Thirdly, aside from lignite coal, Germany imports most of its fossil fuels which strengthens the economic case for domestic renewables.

At face value, South Africa does not yet enjoy any of these key ingredients, and therefore is unlikely to commit to an Energy Transition in the near future. However, considering them does provide insights as to what might bring such a commitment forward. Because development trumps environment as a policy and political priority in South Africa, the requisite political and citizen support for an Energy Transition would need to be achieved by framing it primarily as a developmental one. The combination of electricity tariffs rising in the baseline, opportunities for rural areas through energy decentralisation and the cost and corruption risks of nuclear could form the basis of a compelling developmental case. A plausible economic case for the country is also necessary. This is likely to be renewable technology specific, potentially involving leveraging the country’s dominant industrial position in Southern Africa to specialise in the adaptation and installation of low-tech, energy poverty alleviating renewable technologies en mass in the continent. South Africa also has an abundant solar regime, a resource which Germany succeeded without, which enhances the case for solar energy generation. Put together, these factors may contribute sufficiently to competitive advantage for the country to occupy a leadership space in this niche.

Until the development and economic cases are convincingly made, it appears unlikely that South African political leaders will entertain, let alone promote, such an ambitious plan as that of the German Energiewende. Right now, a transition to renewables departs substantially from the existing institutional, policy and regulatory reality of the South African energy sector. However, the German experience tells us that if political leadership can be achieved, and citizens engaged, the possibility of a similar Energy Transition happening in South Africa may not seem as remote.