Displaying items by tag: Renewable energy

This policy brief opens the door for a deeper understanding of South Africa’s tale of three transitions. First, the electricity transition, characterised by a shift to more decentralised, modular and renewable energy-based systems, is discussed with a focus on the necessary steps to transition the power system sustainability and inclusively. Second, the connected but broader coal transition is unpacked, bringing forward the importance of dedicated interventions in support of a just transition in the value chain, especially in the coalfields of Mpumalanga. Third, the need to pursue an all-of-society and all-of-economy transformation towards climate-resilient and low-carbon models of development is put forward, emphasising the multi-scalar, multi-context, multi-geography nature of climate and transition impacts. Last, the conclusion formulates the necessity of concurrent and mutually-reinforcing but dedicated responses for each of the ‘three transitions’. 

In the face of rising electricity costs, persistent power outages (loadshedding), and the emergence of domestic and international carbon taxes, there has never been a better time for businesses in South Africa to adopt renewable energy (RE) to realise significant savings on their electricity bills, lower their tax liability, secure a reliable supply of electricity, and reduce their carbon footprint.

This study focuses on an assessment of RE adoption pathways without a “loadshedding lens”. In particular, it focuses on the commercial viability of different RE adoption pathways and mechanisms (off-site versus on-site, power purchase agreement versus self-owned) by quantifying the savings businesses can achieve on their utility bills and their carbon tax liability by decarbonising their energy source. Furthermore, the study focuses on medium-sized manufacturing firms with a moderate energy profile, and on solar PV generation as it is unlikely that wind can be deployed on-site by most businesses in an urban setting. It  explores the key pathways available to businesses for adopting PV; describes the core assumptions used in the model to generate the results for each adoption pathway; presents results and observations for three different sizes of installed RE capacity, with and without battery energy storage systems, for a representative firm in Cape Town and Ekurhuleni; and summarises key findings and draws policy conclusions.

As South Africa responds to COVID-19 and aims to stimulate the economy post lockdown through an infrastructure-led package, an opportunity exists to address many of the electricity-related challenges in the country by unlocking the potential of renewable energy technologies. This policy brief looks at the benefits of including renewable energy in the country’s stimulus package and considers possible avenues to do so.

Download a copy or read the policy brief online.

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2018

In this edition

GDP growth: South Africa’s GDP grew by an estimated 0.3% in the fourth quarter of 2018, after expanding 0.6% in the third quarter. For the year, the GDP grew 0.8%. Manufacturing and agriculture continue to grow, but construction and mining struggled. Read more.

Employment: The economy as a whole generated 360 000 jobs in the year to the fourth quarter of 2018, mostly in the informal sector and domestic work. Employment in manufacturing, mining and agriculture remained essentially flat, while construction reportedly created 90 000 mostly informal jobs over the year. Read more.

International trade: South Africa’s balance of trade strengthened in the fourth quarter, mainly due to a fall in imports while exports increased. The economy typically runs surpluses during periods of slow growth, as seen in the past three years. Read more. 

Investment and profitability: The decline in public investment, which has contributed to slower GDP growth since 2015, continued in 2018. In contrast, private investment picked up somewhat, although it remained below levels achieved before the commodity boom ended in 2012. Read more. 

Foreign direct investment projects: Eighteen new projects were added to the TIPS Foreign Direct Investment (FDI) Tracker in the past quarter. Some of these projects were announced during the Investment Conference held in October 2018 while others date back before it. Read more. 

Briefing note: The 2019 budget and industrialisation: The 2019 Budget faced tough choices. In the end, National Treasury prioritised core social services, infrastructure, and rescuing Eskom while avoiding an excessive increase in the national debt. The trade-off is a squeeze on industrial policy programmes, which will see cuts in real terms. Read the briefing note online: The 2019 budget and industrialisation.

Briefing note: Unlocking the potential of renewable energy for public sector and communities:  Historically, South Africa's electricity mix has relied heavily on cheap and readily accessible coal, with the country's electricity being provided through Eskom's vertically-integrated model. In 2011, the country opened up space in the electricity generation sector for private sector participation, through the Renewable Energy Independent Power Producer Procurement Programme. While this introduced renewable energy technologies into South Africa, the approach effectively locked renewable energy in the private sector, excluding Eskom, municipalities and consumers from renewable energy generation.Read the briefing note online: Unlocking the potential of renewable energy.

Session 1: Renewable energy and inclusive growth

The growth of renewable energy technologies is re-shaping energy systems across the globe. In South Africa, which relies on coal-fired power plants for 90% of electricity generation, this trend suggests a critical shift in dynamics, generating numerous risks and opportunities at all levels of the value chain.

This is particularly the case for South Africa’s municipalities. The re-definition of South Africa’s electricity systems indeed commands the need to better understand the business models available to municipalities to maximise benefits arising from this transformation while mitigating risks and balancing trade-offs. Business models are understood as maps, frameworks and plans that structure how investments are designed, implemented, managed, and financed. Business models are constructed in response to an opportunity (that arises or is foreseen) in such a way that the business (i.e. the municipality) extracts maximum value from this opportunity.

This Discussion Paper reviews possible business models for South African municipalities to seize arising opportunities and minimise potential risks associated with the introduction of renewable energy technologies in the domestic electricity system. It proposes a typology of available business models for municipalities to seize emerging opportunities arising from renewable energy technologies. Three overarching roles, spilt into seven business models, are considered for municipalities: building electricity generation capacity; procuring electricity; and playing a facilitation function. Based on a three-pronged methodological framework taking into account the drivers of the business models; their techno-economic potential; and their ability to manage risks (regulatory, financial and socio-political); this report reviews each business model, highlighting their strengths and weaknesses.

This paper was commission by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and prepared for the South African-German Energy Partnership.

It was co-authored by Trade & Industrial Policy Strategies (TIPS), the Centre for Renewable and Sustainable Energy Studies (CRSES) at Stellenbosch University and World Wide Fund for Nature South Africa (WWF-SA).