/ 10 February 2023

Ramaphosa: Just Energy Transition will be at a pace South Africa can afford

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South Africa is on the path to a just transition. But does it make sense? (Getty Images)

The energy crisis is an “existential threat” to South Africa’s economy and social fabric, said President Cyril Ramaphosa, but South Africans must be mindful of the risks that climate change poses to its society.

Delivering his State of the Nation address on Thursday, Ramaphosa said extreme weather events in the form of drought, floods and wildfires increasingly pose a risk to the health, well-being and safety of the country’s people. 

“We will continue our just transition to a low carbon economy at a pace our country can afford and in a manner that ensures energy security,” he said, adding this would be done in a way that opens up the possibility of new investments, new industrialisation and creates new jobs.

The president’s speech detailed the country’s climate and just transition plans, but more decisive action is needed, according to environmental groups.

More ‘coherent approach’ needed

Responding to Ramaphosa’s address, conservation organisation WWF issued a statement describing how there is an urgent need for a more coherent approach to energy planning. 

“Beyond electricity, South Africa cannot continue to design its energy system based on ad-hoc responses. Not only has the current national integrated energy plan not been enacted, but it is also woefully out of date,” it said. 

While Ramaphosa’s reforms, such as tax subsidies for rooftop solar households and businesses to feed back into the grid are welcomed, “we must guard against leaving poor communities behind”, WWF said. 

“If middle-to-high-income households are incentivised to defect from the grid, this would effectively put the burden of the cost of grid maintenance and management on low-income households. As we wait to hear more details in the budget speech, we would urge the minister of finance to divert a significant portion of financial support to low-income households.

“Socially-owned renewable options for low-income households should be a key component of the just energy transition.”

Ramaphosa’s announcement of the state of disaster and the creation of a minister of electricity “all point towards an ad hoc response to the energy crisis,” WWF said. “The integration of mineral resources and energy into one department made sense when energy was synonymous with the extraction of coal, but the large potential for cheap alternative energy that has arisen over the past decade has changed that. However, the separation of electricity from the energy portfolio has the potential to further undermine coherent energy planning.”

That gas is still on the table as part of a short-term, quick-fix to the country’s energy crisis is disappointing, it said. 

“The long lead times in gas exploration and exploitation mean that no local gas can be provided within a five-year time period, likely we would still be developing such fields well into the 2030s. Running these gas plants will also inevitably lock us into a fossil fuel future not aligned to our carbon emissions reduction targets, and billions of taxpayer money will have to be forked out to make this archaic technology cost-competitive.”

Good speech is ‘not enough’

Ramaphosa will not inspire more hope in South Africa with a good speech, but with decisive action against the climate crisis, the electricity crisis and the growing unemployment crisis, said Nhlanhla Sibisi, the climate and energy campaigner for Greenpeace Africa, in a statement.

“As before, Greenpeace Africa welcomes new investment into renewable energy. They are the best and most immediate solution to South Africa’s electricity and unemployment crises. The just transition must continue, with coal-impacted communities at its centre, and guided by climate science.

“However, the president’s plans to address energy security include throwing money into the gas industry and at Kusile which would require temporary exemption from the department of environment, forestry and fisheries (DFFE) to enable it to bypass air-pollution control. The DFFE must not allow Eskom to renew its licence to kill in the name of the government’s immense failure to manage this crisis, while Eskom has simultaneously been given the go ahead to raise electricity tariffs by 18.65%.”

Sibisi said the influx of funds dedicated to the energy transition “must be handled with utmost transparency. They must not fall victim to graft and shady deals by corrupt officials. We simply cannot afford it”.

Just energy transition investment plan (JET-IP)

The presidential climate commission (PCC) is guiding just transition and “building a new model for inclusive and collective decision making”, incorporating the individuals, workers and communities that will be most affected by the transition, Ramaphosa said.

“Through the just energy transition investment plan (JET-IP), R1.5 trillion will be invested in our economy over the next five years in new frontiers such as renewable energy, green hydrogen and electric vehicles. Several new sectors are emerging in the economy, such as major green hydrogen, electric vehicles and fuel cells,” he said.

A number of projects are underway including the development of a new facility by Sasol at Boegoebaai in the Northern Cape, the Prieska Power Reserve in the Free State and the Hydrogen Valley initiative in Limpopo, Gauteng and KwaZulu-Natal.

The Northern Cape had already attracted more than R100 billion in investments in renewable energy projects, said Ramaphosa. “These and other massive investments in renewable energy will create jobs and stimulate local economies not only in the Northern Cape, but also in the Eastern Cape, Western Cape and Mpumalanga, turning even the most arid desert into a giant energy source. Above all, our just transition will prioritise workers and communities in vulnerable industries to ensure that no one is left behind.”

Meeting climate needs

Joanne Yawitch, a commissioner at the PCC, said the the R1.5 trillion JET-IP sets out South Africa’s needs and financing options between 2023 and 2027 to decarbonise the economy at the rate that would be needed to meet the targets set out in its Nationally Determined Contribution (NDC), countries plans to mitigate emissions and deal with climate change. 

“In submitting an ambitious updated NDC to the United Nations Framework Convention on Climate Change in 2021, South Africa raised the question of how its climate action could be supported by the international community in keeping with the Paris Agreement,” said Yawitch, who was addressing a youth consultation on the integrated energy transition dialogue the commission held this week.”

Achieving the JET-IP outcomes is dependent on the type of financial support that South Africa can secure from the international community to complement domestic resources.  

“At COP26 in 2021, a Just Energy Transition Partnership was forged with France, Germany, the UK, the EU and the US, forming the International Partners Group (IPG), in which the IPG undertook to mobilise $8.5 billion over five years to support South Africa’s just energy transition.”

The initial IPG offer of US$8.5 billion, is “a catalytic contribution” towards addressing the JET- IP priorities, Yawitch said. 

“The plan [JET-IP] does not deal with the whole of the climate issue, it does not deal with adaptation and doesn’t even deal with all the mitigation sectors. It deals with important ones though, it deals with electricity and energy; it deals with electric vehicles and mobility and it deals with green hydrogen,” she said.

“There’s much more work we need to do as a country to develop a comprehensive climate plan and a comprehensive investment plan, but it certainly deals with some of the sectors that are the biggest contributors to our greenhouse gas emissions. If we could implement or deal with them, it would take us quite a long way in this country.”