Elsevier

Energy Policy

Volume 38, Issue 9, September 2010, Pages 4945-4954
Energy Policy

Renewable energy in South Africa: Potentials, barriers and options for support

https://doi.org/10.1016/j.enpol.2010.03.077Get rights and content

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. First steps have been taken by the South African government to enhance energy efficiency and promote renewable energy, however, they fail to show large-scale effects. This paper seeks to identify the relevant barriers to renewable energy investments and, based on experience from other countries, provide policy recommendations.

The major barrier identified in the paper is based on the economics of renewable energy technologies, i.e. their cost and risk structures, two main factors in investment planning. As a solution, the South African government introduced several renewable energy support measures, such as a feed-in tariff. The paper discusses the potential and possible shortcomings of this and other existing support schemes and identifies complementing measures on a national scale.

Section snippets

The challenge

Climate change is one of this century’s most serious problems. The Fourth Assessment Report of the Intergovernmental Panel on Climate change (IPCC) points to human activity as one of the major causes of global warming. Business as usual may lead to a disastrous transformation of the planet, and recent scientific findings emphasize the growing urgency of reducing greenhouse gas emissions (Meinshausen et al., 2009).

The parties to the climate negotiation process under the UN Framework Convention

South Africa in the face of climate change

Africa is regarded by the United Nations as one of the continents most vulnerable to the impacts of climate change as a consequence of its high dependency on agriculture, the water stress from which it already suffers and its weak adaptive capacity (IPCC, 2007, 435). The likely impacts are numerous, ranging from changes in water availability and extreme weather events to sea level rise and adverse health impacts.

However, the impacts of climate change differ in the various African regions. In

South Africa’s contribution to climate change

South Africa is already being affected by global climate change, and the impacts will intensify in the coming decades. However, it is also a contributor to global greenhouse gas emissions. In 2005, it was responsible for about 1.1 per cent of global emissions and about 40 per cent of emissions in sub-Saharan Africa (WRI, 2009). At an average of 9 tonnes CO2e per person in 2005, the per capita emission rate almost equalled the average per capita emissions of 10.7 tonnes in the European Union.

Structure of the South African electricity sector

The sector is dominated by Eskom, a state-owned enterprise. Eskom not only produces almost all of South African electricity (95 per cent), but also owns and operates the national transmission system. Only about 2 per cent of South African electricity is produced by private companies.

The primary energy source used in electricity production is coal (86 per cent), followed by nuclear energy (5 per cent) and various other sources, including renewable energies such as hydro power (see Fig. 2). The

Promoting private-sector involvement in renewable energy

While rising electricity prices will improve the competitive position of renewable energy technologies in the future, these technologies will still need considerable support if they are to be deployed on a commercial, large-scale basis. This support is needed as soon as possible, since investment cycles are comparatively long in the energy sector. Investments in fossil-fuel-powered stations undertaken today lock these technologies in for decades to come. The South African government has

Conclusions

South Africa is well endowed with renewable energy resources, especially solar energy. Tapping into this resource would help to meet both the emissions and the energy supply challenge. In addition, the deployment of renewable energy will reduce air pollution and so contribute to health improvements. Renewable energy technologies may also increase electricity access in remote areas since they are suitable for small-scale, off-grid solutions. By facilitating income generation and health care,

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