By Mark Swilling, Nthabiseng Mohlakoana, Merin Jacob, Ndamulelo Mararakanye, Bernard Bekker and HJ Vermeulen
The publication of the list of preferred bidders for the Risk Mitigation IPP Procurement Programme (RMIPPPP), the subsequent opening of Bid Window 5 by the Department of Mineral Resources and Energy (DMRE) and the recent presidential announcement about the new 100MW limit for self-generated licence-exempt renewables has focused attention on the accelerated construction of renewable energy generation in South Africa.
This brings the procurement of renewable energy from Bid Window 1 to Bid Window 5 to a total of 9GW, with a further potential procurement of 1.8GW from the RMIPPPP. Although this may not be as much as civil society groups, industry associations, research organisations and even Eskom may have wanted, the total of 10.8GW renewable energy, ie 24% of capacity currently installed in South Africa, does suggest that South Africa may well be catching up with the rest of the world that is transitioning fast into a renewables-based energy future.
The establishment of the Presidential Climate Change Coordinating Commission (P4C), with a clear mandate inherited from the National Planning Commission’s Just Transition Scenarios, will inevitably lead to the government confirming the globally accepted “Net Zero by 2050” target that was referred to in the Low Emissions Development Strategy approved by the Cabinet in September 2020. The Net Zero target refers to achieving net zero carbon emissions by 2050. This does not mean no carbon emissions, it means that the total output of emissions and total capture of emissions in carbon sinks should equal zero.
It’s an ambition that South Africa’s Nationally Determined Contributions (NDC) being prepared for COP26 later this year will need to fully embrace. The strongest commitment statement to date to the energy transition comes from the Presidential Economic Advisory Council (PEAC): “What used to be a choice is now mandatory. Those countries not adapting to a green transition will find themselves behind and excluded.”
The above developments, together with the recent announcement by the president that the cap on licence-exempt self-generation will be lifted from 1MW to 100MW that could unlock as much as 5GW of additional capacity in the near future, must undoubtedly be celebrated by all stakeholders.
According to the Council for Scientific and Industrial Research (CSIR) an ambitious commitment to building 5GW of renewable energy per annum for decades is urgently required — this equates to the generating capacity of two-and-a-half Koeberg nuclear power stations. This is needed to replace South Africa’s ageing coal-fired power stations and could unlock nearly R500-billion worth of investment over the next 10 years, creating 50,000 jobs per annum in construction and operation of wind and solar plants.
This, in turn, would trigger an upstream industrialisation programme that will catalyse the re-industrialisation of the South African economy that will rapidly drive down unemployment levels. All good news. Expanding and decarbonising the generation capacity through investment in renewable energy, however, represents only one aspect of the transition to a stable and sustainable energy scenario.
Once generated, electricity must be transmitted from distributed generation sites to load centres via the electricity grid. The existing grid, however, is unevenly developed — it is strong in the northeast where the coal deposits are, and weak in the southwest where the best wind and solar resources are located. Is the national grid, therefore, fit for future purpose?
Investments in renewable energy will unlock economic growth, especially in the regions where the plants and grid infrastructure are sited. However, will these benefits be optimally and equitably distributed across the South African landscape? Communities around wind and solar farms are well positioned to benefit developmentally from these projects. But this depends on the capabilities of local governments, local businesses and civil society to take advantage of new inward investment flows. This has implications for the location of projects. It would not be desirable, for example, to put projects into locations where there are high levels of corruption and mismanagement.