Prospects for renewable energy in South Africa: mobilizing the private sector

Abstract

The challenge of transforming entire economies is enormous; even more so if a country is as fossil fuel based and emission intensive as South Africa. However, in an increasingly carbon constrained world and already now facing climate change impacts South Africa has to reduce greenhouse gas emissions intensity soon and decidedly. The South African electricity sector is a vital part of the economy and at the same time contributes most to the emissions problem. Several policy papers have been drafted and published by the South African government to enhance energy efficiency and promote renewable energy. However, they fail to show large-scale effects. This reveals a gap between policy planning and actual implementation. The paper discusses the potentials and possible shortcomings of the existing policy schemes and identifies the main factors leading to the implementation gap. It furthermore proposes measures to enhance implementation. The major social barrier identified in the paper is the inherent power constellation of the South African energy sector, which is dominated by few para-statal enterprises. Their core competencies are fossil-fuel technology based, so they have no incentives to foster renewable energies. This power constellation crucially affects the energy innovation system, biasing research as well as education towards fossil-fuel technologies. The structure of the energy sector furthermore prejudices relevant policy making, reduces the incentives of effective clean energy policy implementation and thus leads to a situation of ‘carbon lockin’. Another barrier is based in the economics of renewable energy technologies, i.e. their cost and risk structures. As most renewable energies are more expensive than conventional technologies, they offer no incentives for policy makers to support rapid deployment. Despite the necessity to deploy these technologies, their cost structure collides with the policy goal of cheap electricity provision and electrification of the poor parts of the South African population.