Crispian Olver, executive director of the Presidential Climate Commission (PCC), says putting climate mitigation and energy in the same ministry may be the way to deal with “policy discords” that are hampering efforts to meet carbon emission targets.
“We have a well-developed climate policy framework but real implementation gaps. We have an excellent green transport strategy but it's simply not being given effect to. We have a white paper on new energy vehicles but we're way behind the curve on moving to EVs, and if we don't get a move on we're likely to lose our auto-manufacturing capacity.”
A report by the PCC released last week says contradictory policies and lack of consensus have contributed to “a huge discrepancy” between South Africa's climate action commitments and what's actually happening.
“There are some real policy discords between energy and climate”, says Olver. Many countries are putting them into the same ministry to bring energy and net-zero policies into “direct articulation” with each other.
“I think it would have been a clever move for us to put climate mitigation and energy together.”
This seems precisely the kind of innovative response to the climate-change challenges facing South Africa that the PCC, formed as an independent entity no less than four years ago, should have been pushing for.
Olver says they haven't “because we stay in our lane”. He has spoken to people in government about it but hasn't made a formal recommendation.
They have made detailed recommendations on the energy transition and the electricity plan based on the fact that it's now cheaper to generate power using a combination of batteries, renewable energy and sun-peaking power capacity.
“Of the different combinations of energy systems including nuclear and coal, renewable and storage is the least expensive of the archetypes for South Africa.”
In spite of the lack of progress highlighted in the PCC report there are some “very real” systemic changes happening in the energy system, he says.
“We are creating a competitive energy market, we are putting transmission into a separate company. The minute you have an open and competitive energy market the market will start selecting for the least-cost alternatives. There's a very close correlation between least cost and least emissions.”
It's important to look at “the positives”, he says. But how easy is this when according to the PCC report renewable capacity in South Africa has been growing by 1GW a year since 2015 when it needs to grow by up to 14GW a year to meet the 2050 net-zero target?
“We've had five years of minister Gwede Mantashe holding back energy reforms. You're now seeing major reforms baked into the system, and you're seeing that in the number of registrations for projects,” Olver says.
We are creating a competitive energy market, we are putting transmission into a separate company. The minute you have an open and competitive energy market the market will start selecting for the least-cost alternatives
He points to a pipeline of 22GW of private sector projects at various stages of development, and huge embedded energy projects being implemented by major industrial and mining companies.
On the downside are Eskom's efforts to limit the access of these private sector projects to the national grid, which shows the old mindset is still alive in some of our most important state-owned enterprises.
“These large SOEs do tend to be a little self-serving and insular. But there are changes that not even Eskom can undo, such as the separation of generation and transmission.
“Even though the Electricity Regulation Amendment Act is not yet signed into law, the transmission company is to all intents and purposes separated. It's got its own balance sheet, its own financials, its own board. That was Eskom's doing.”
But when it comes to a competitive power market Eskom is “not as gung ho about it as we need to see”.
“The whole point about an energy transition is that you've got to roll up your sleeves and embrace it and get on with it and send the right market signals, and get the investment happening at the right scale. Otherwise you don't build a proper local industry for renewables and batteries and the associated infrastructure.”
The most costly, urgently needed and overdue infrastructure is a bigger transmission grid to accommodate the renewable energy needed to meet our emission targets. Eskom is not moving fast enough on this, Olver says.
Their current build rate on transmission lines is less than 10% of what it needs to be to achieve the 14,000km of transmission lines the transmission development plan talks about.
“They seem to be fairly comfortable doing it with their existing financial resources and not innovating with financial structuring. There's no way they can do it off their current balance sheet, so you've got to find ways of innovatively bringing in the private sector at scale with debt and equity.”
Independent power transmission projects are clearly the way to go to achieve the grid rollout South Africa so desperately needs, he says, but he's picking up a lot of resistance to the independent power producer model.
As much of a threat as this attitude is to South Africa's ability to meet its climate change emission targets or pay exorbitant financial penalties, there seems little the PCC can do about it.
The Climate Change Act which President Ramaphosa has just signed into law makes it a permanent statutory body, but its powers are still only advisory.
The fact that this legislation has been more than six years in the making gives some idea of what former environmental affairs director-general Olver and his team are up against.
“There are still very divergent views about the climate transition. Both in government and society at large there are a lot of people who think we should continue using coal for as long as is humanly possible.”
All in all there needs to be “a greater sense of urgency” about delivering on the country's climate-change targets, he says.
“The climate impacts are already accelerating rapidly, so getting our resilience built and making the necessary investments in water and other infrastructure needs to start happening now. We're not investing nearly rapidly enough in building climate resilience.”
The other “worry” is that major trading partners like the EU, UK, Canada and Australia are starting to implement carbon border tariffs.
“If we don't act to decarbonise we're going to find ourselves increasingly shut out of the global trading system, and that is going to affect our economy hugely.”
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