RALEIGH, North Carolina — In 2015, the United Nations adopted the 2030 Agenda for Sustainable Development, which consists of 17 Sustainable Development Goals (SDGs) for member nations to work together to achieve by 2030. Recognizing that access to electricity is necessary to alleviate extreme poverty, SDG 7 calls for ensuring “access to affordable, reliable, sustainable and modern energy for all.” South Africa is one particular country where SDG 7 must stand as a top priority, with 18.7% of people enduring extreme poverty in 2014 and about 15% of people living without access to electricity in 2019. However, even among those who do have access to electricity, reliability and affordability issues weaken their access. The country hopes that renewable energy technologies (RETs), namely, solar and wind, can play a key role in overcoming these hurdles to electricity access. Renewable energy in South Africa has the potential to transform a nation plagued with blackouts.
From an Abundance of Power to Rolling Blackouts
Eskom, South Africa’s state utility company, enjoyed a hefty reserve margin (power capacity in excess of demand) during the 1980s and 1990s. This reserve margin peaked from 1991-1993 when it reached nearly 40%. While a reserve margin is always favorable over electricity deficits, operating and maintaining fewer plants closer to maximum capacity is more cost-effective. For this reason, South Africa started decommissioning some plants in the second half of the 1990s.
The resulting savings from reducing plant operational costs allowed Eskom to accelerate its effort to provide universal access to electricity. From 2001 to 2011, the household penetration of electricity increased from 61% to 83%. This stood as welcomed progress in a country desperately needing to increase social equity. However, mismanagement of power capacity resulted in demand outstripping supply in late 2007, leading to severe blackouts well into 2008. Circumstances would return to normal for some time, but purposefully induced rolling blackouts returned in 2013, becoming a regular occurrence since then. This “load shedding” is very disruptive to the South African economy and to peoples’ lives in general.
The Turning Point for Renewable Energy
The hard reality in 2007 that Eskom’s power generating capacity had failed to keep pace with the country’s energy needs, ultimately proved to be a boon for the adoption of RETs in the country. By that point, RETs were becoming increasingly more affordable and calls for environmental protection became more salient; leaders started to think RETs could and should play a more significant role in South Africa’s energy mix.
Renewable energy in South Africa only made up 0.63% of the country’s electricity production in 2008. By 2020, this percentage had risen to 6.25% while 88.6% of electricity still came from fossil-fuel sources, namely coal. By 2030, South Africa hopes to reduce coal use to “less than 60%” of its energy mix and boost renewables to 25%.
The Upsides of Renewable Energy
South Africa has large coal reserves that make the ongoing reliance on coal a tempting proposition. Nevertheless, renewable energy in South Africa is on the rise with long-term plans in place because the nation “sees renewables as having a critical role in advancing the transformation of the energy sector and social equity.”
In addition to its environmental benefits, there are several specific upsides to RETs that South Africa recognizes. First is that the lead time to produce renewable energy projects is much shorter than for traditional fossil-fuel-powered plants, which can be beneficial in the short term for decreasing the energy deficit. Second, RETs can be used to supply off-grid power to localized, hard-to-reach areas with underserved communities. Third, the country has an abundance of wind and sunshine that can supply a significant amount of renewable energy.
Ensuring Social Equity Through a Speedy Transition
The 2011 launch of a competitive bidding process, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), helps to advance renewable energy in South Africa. With the program, the government identifies renewable energy projects in stages and then solicits bids from the private sector (both domestic and foreign) to complete the projects. The government attracts many bidders by guaranteeing a minimum amount of income from the projects. The program, which recently completed its fifth round of bidding determinations, has proven very successful.
The REIPPPP helps ensure social equity by aligning with Black Economic Empowerment (BEE) policies, a form of restorative justice for the racial injustices endured during South Africa’s apartheid era. As such, the REIPPPP requires 49% of involved entities to be South African and at least 30% of shareholders should be Black. Furthermore, Black people should constitute at least 25% of workers on the projects and at least 5% of ownership should be held by Black women. The REIPPPP also requires that at least 40% of construction content must come from local sources and local communities must have 2.5% ownership. Additionally, the winning bidders “have committed a total of R 2.7 billion ($177 million) toward Socio-Economic Development and Enterprise and skills development initiatives over the 20-year lifetime of the projects.”
In November 2021, it was announced that South Africa would receive $8.5 billion in developmental aid from the United States, United Kingdom, Germany, France and the EU to speed up the country’s transition from coal to renewable energy. For a nation that yearns for a reliable source of electricity, this push certainly brings hope that South Africa may one day achieve power stability. Greater access to electricity in a more stable and reliable form will improve the lives of South Africans, especially if producing this electricity does not pollute the air they breathe.
– Jeramiah Jordan