There is an old saying: “Never waste a good crisis” — and load-shedding has given us two opportunities to prove its value.
First, the country has demonstrated that we can rapidly deploy new renewable generation and advance the energy transition.
Second, we have seen unprecedented levels of co-operation and engagement between government and business, leading to robust delivery structures and a much greater focus on implementation.
What remains to be seen is whether we can carry these efforts over the finishing line to develop a modern, decarbonised energy system that ends load-shedding for good and provides reliable and affordable power for all South Africans.
While 2023 has heralded progress, we have still not solved our multifaceted energy crisis that requires not only a solution to energy security and load-shedding, but also a detailed system plan and integrated roadmap to our energy transition
The meteoric rise in rooftop solar PV in 2023 has taken it to nearly 5GW of generation across South Africa, which has significantly reduced daytime load-shedding. It also demonstrates the rapid action we can take when we set ourselves to the task. As a result, renewables have come to the fore as part of a sustainable transition.
The private sector-led investment in large-scale wind and solar has been just as impressive, though such sizeable projects take longer to prepare.
These scenarios prove that the level of new generation deployment required for an accelerated energy transition can be achieved with integrated planning and collaborative efforts towards clear, well-defined goals.
A good example of how quickly we have moved is that the Northern Cape’s net-demand is reliably being met throughout the year by 100% clean power from renewables. This demonstrates that, despite what the sceptics say, we have the ability and the resources to exceed expectations when we focus on delivery.
The constructive engagement and collaboration between government and business in 2023 is also something to celebrate. Led by the president and backed by more than 130 CEOs from major South African companies, Business for South Africa and key government ministers are tackling major economic challenges across energy, transport and logistics, as well as crime and corruption.
Under the energy pillar of this partnership, confidence in the Energy Action Plan and the National Energy Crisis Committee have increased and are now seen as drivers of important sector interventions and reforms. The transparent, robust engagement and growing technical support from business have delivered sound results, including measurable progress on power station performance turnaround, critical technical work on grid capacity, and the essential Electricity Regulation Amendment Bill that is following an expedited process through parliament.
While 2023 has heralded progress, we have still not solved our multifaceted energy crisis that requires not only a solution to energy security and load-shedding, but also a detailed system plan and integrated roadmap to our energy transition. The major challenges are the ongoing structural energy deficit, the significant capacity and skills gaps and, critically, that we are falling further behind on our national decarbonisation targets. To this end we must build on the platforms established in 2023, accelerate delivery through 2024 and redefine the focus of our energy efforts.
Historically, our planning narratives, including the Integrated Resource Plan, have been highly focused on setting a target energy mix. This inadvertently chooses technology winners and limits innovation. Unfortunately, it also creates much confusion for the public when technologies such as coal are positioned as mutually exclusive from technologies such as wind and solar. The South African reality is that if we are to avoid a future of load-shedding we will need all these technologies to work, including many more, in an integrated, well-planned and reliable energy system.
When it comes to climate change there is no dispute that we must decarbonise our economy — not doing so has unacceptable economic, environmental and social risks. We have committed to this as a signatory to the UN Framework Convention on Climate Change’s Paris Agreement. We have further committed to contributing to global decarbonisation efforts through our own legislation and nationally determined contributions (NDCs).
The good news is that the world is making rapid progress in decarbonising, with the electricity sector as the front-runner (transport and industrial energy will come later). South Africa’s heavy reliance on coal generation makes us the most emissions intensive global economy, with our electricity sector comprising nearly half of our total emissions.
In absolute terms, our emissions are relatively small, with the majority of global emissions from China, the US and India, all of whom, with the EU and the UK, are well on track to meet and even exceed their emissions reduction targets in the electricity sector, despite being at very different stages of maturity. China and the US, as the biggest global emitters and economies, committed to a further package deal ahead of COP28 to enhance the global response to climate change, which is tipped to favour financial support for developing economies.
We have the opportunity to join other nations in the developed and developing world who are leaders in turning the crisis of climate change into an economic opportunity that will provide energy, jobs and prosperity for present and future generations
With the recent announcement that the UK will join Europe in introducing carbon border taxes in 2026, slowing down our rate of decarbonisation carries significant risks of decreasing trade and economic competitiveness with our biggest trade partners. We can, however, take confidence and lessons from all these economies that the energy transition is achievable.
Our most immediate challenge is recovering energy security to end load-shedding, which in the short term can only be achieved through rapid performance improvements of Eskom’s coal stations. Yet we must also guard against the risk of increased stranded assets and further delays to our decarbonisation pathway due to the extended high emissions generation from coal.
This brings us full circle to the need to accelerate our transition to a future low-emissions energy system that must deliver reliable, efficient and affordable energy services.
To navigate this tricky balance we must resist the temptation to simply rearrange the deck chairs on the Titanic, as the saying goes. Our approach should view our energy transition as a system-wide overhaul that fundamentally changes direction and must include an integrated approach to supply, demand, utilities, grid and markets — all supported by clear policies and regulations.
Above all else, we must view the energy transition as an opportunity to position the country for future growth — not as a threat to South Africa’s economic or social wellbeing. Realising the economic and environmental upside of the energy transition requires decisive action to rapidly shift our centralised and archaic energy structures to a competitive energy market, which all industrial economies have already implemented.
This will unlock the largest capital investment programme in our country’s history, which must be put to work to reinvigorate local manufacturing, create millions of direct and indirect jobs, and to spur innovation and skills development for our youth. This is our opportunity to put South Africa on a higher economic growth trajectory, even as we mitigate the impact of climate change.
2023 has demonstrated that if we act with focus and urgency, we can make significant progress. South Africa has the expertise and the goodwill of local and global partners to ensure that we succeed. We have the opportunity to join other nations in the developed and developing world who are leaders in turning the crisis of climate change into an economic opportunity that will provide energy, jobs and prosperity for present and future generations. Together we can overcome South Africa’s energy crisis.
• Mackay is CEO of the Energy Council of South Africa
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