South Africa has been setting a positive example for its approach to ensuring a just energy transition. Not only is South Africa embracing renewable energy projects, but it is also wisely pursuing several proactive measures to generate the necessary funding.
One such approach is the Renewable Energy Independent Power Producer Procurement Program (REIPPPP), which focused on incentivizing private-sector investment in biomass, wind, and small hydro.
The government operated the program between 2011 and 2015 to address energy poverty and extend access to clean electricity. This effort gave South Africa over 6,000 megawatts (MW) of renewable generation capacity.Due to its success, the program was re-launched as part of the country’s 2019 integrated resource plan. The REIPPPP is fostering a just energy transition complete with job creation and economic transformation. By harnessing significant private sector expertise and channelling investment, the program is fostering grid-connected renewable energy at competitive prices.
We at the African Energy Chamber continue to be impressed with the success of the REIPPPP. In the Eastern Cape province, for example, the program has created more than 18,000 jobs and set up 16 wind farms and one solar energy farm. Perhaps more importantly, the province also experiences less load shedding (scheduled power outages) as a result of these efforts.
$99 Billion Is a Huge Goal
According to the chamber’s new report, “The State of South African Energy,” a just energy transition will require almost $99 billion (1.8 trillion rands) over the next five years. And South Africa has moved significantly closer to that target, thanks to the $8.5 billion (131 billion rands) pledge from the multinational International Partners Group (IPG), $33 billion (131 billion rands) from the private sector, and $10 billion (184 billion rands) from the public sector.
Other Measures to Consider
We commend South Africa for its proactive measures to embrace renewables. Now, it will be important to be diligent about keeping the momentum going.
As we reported in “The State of South African Energy,” the Electricity Regulatory Act of 2021 led to 6 GW of renewable generation capacity through private sector projects by bumping up the licensing threshold from 1 MW to 100 MW. This is forward progress. However, we noted that an even higher threshold would have fostered greater investment in large utility projects. For example, the government should consider signing multi-decade land lease agreements with independent power producers to generate even greater renewable capacity.
Green Energy That’s Beneficial for South Africa
As we’ve seen, the South African government is making strides in adopting policies to aid a just energy transition from coal to renewables.
The result of these new policies is that the nation is starting to see the benefits of solar PV and onshore wind energy as a replacement for coal. In fact, as we reported in “The State of South African Energy,” coal power generation is on track to decrease from 210 terawatt hours (TWh) in 2021 to 73 TWh in 2050. At the same time, we expect carbon intensity to drop from 829.38 kg CO₂e/MWh to 250 kg CO₂e/MWh as renewables continue increasing.