/ 17 August 2023

Balancing ambition and implementation in SAs energy policy

Energy (1)
Power play: Ambition and implementation need to be weighed against each other as South Africa seeks a just energy transition. Picture: Getty Images

In South Africa, there’s a saying: “Great policies but poor implementation.” This highlights the struggle between policy ambitions and their realisation. 

Rooted in the 1998 Energy Policy White Paper, the nation’s energy policies have aimed to address disparities in access and to expand access to a majority excluded from electricity during apartheid. These policies have produced crucial strategies, such as the Integrated Resource Plan (IRP) and the Renewable Energy Independent Power Producers Programme (REIPPP).

South Africa is facing strong demands for an energy transition; the challenge lies in aligning policies and making them work effectively. 

It is worth exploring the country’s power evolution, its policy intricacies, and the ongoing pursuit of a resilient energy future.

The evolution of policies 

The 1998 white paper aimed to rectify the economic, social and power imbalances which were inherited from apartheid. It also identified energy access as a crucial economic growth and development driver. Consequently, it aimed to accomplish the following goals:

• Enhancing access to affordable energy services;

• Strengthening energy governance;

• Managing energy-related environmental and health impacts;

• Fostering energy security through diversified resources and 

• Promoting economic development.

To attain these objectives, it emphasised integrated energy planning as a tool, acknowledging energy’s role in achieving these objectives and highlighting policy’s role in enabling efficient consumption and use. 

Through integrated energy planning, the 1998 white paper warned that electricity demand would exceed generation capacity by 2007. 

Integrated energy planning was also used to develop a roadmap for South Africa’s future electricity generation, which would later take the form of the IRP.

In 2003, the White Paper on Renewable Energy Policy (hereafter referred to as the 2003 white paper) was introduced, which defined renewable energy and identified its role in promoting energy security and reducing emissions. 

The 2003 white paper committed to a goal of 10 000 megawatts of renewable energy generation by 2030 and set out strategies for its achievement, including:

• The development of a regulatory framework to govern renewable energy;

• The introduction of a feed-in tariff to encourage investment in renewable energy projects and

• The provision of technical and financial support for the developing renewable energy sector.

These strategies informed the regulatory guidelines surrounding the Renewable Energy Feed-in Tariff. This programme obligated Eskom to purchase electricity from specific renewable energy generators feeding into the grid at a predetermined price. 

REIPPP succeeded it in 2011, introducing a competitive auction process whereby private companies bid to develop new renewable electricity generation and the government entered into contracts with these companies to supply the grid. 

This demonstrated the positive evolution of policy mechanisms and the role that the private sector could play in the transition. Moreover, REIPPP supported the implementation of the IRP 2010 to 2030’s target of 17 800MW of renewable electricity generation and the IRP 2022 to 2030’s planned procurement target of 22 9000MW.

REIPPP has achieved moderate success but has also encountered challenges in effective implementation. The success of REIPPP is exemplified by 85 out of the 92 bid window 1 to 4 projects being operational. This is significant, considering the total allocated capacity between bid windows 1 to 4 of 6 308.86MW for these 92 projects. 

However, the six-year gap between bid windows 4 and 5, the failure of certain projects to achieve financial closure and bid window 6’s allocation of only 860MW out of the planned 5 200MW all highlight the recent challenges faced during implementation. REIPPP faces severe challenges due to potential policy uncertainty and grid integration challenges.

Looking ahead, the South African Renewable Energy Masterplan highlights the country’s commitment to accelerating the transition to renewable energy sources and diversifying energy supply. 

The plan incorporates lessons from previous policies and aims to streamline the further development of renewables, enhance grid infrastructure and stimulate job creation in the energy sector.

The current realities

The 1998 white paper underscores the importance of adapting policies to meet changing circumstances. While successor policies, regulations and plans have continued to attempt to fill the gaps, the dynamic nature of the energy landscape demands ongoing policy alignment.

The imperative of securing the just energy transition adds another layer of complexity to this alignment process. As the nation strives to transition towards renewable energy sources, the need for increased harmonisation between and across energy plans and policies becomes paramount.

The introduction of independent power producers (IPPs) as potential energy-mix contributors introduces challenges alongside promises. 

Critics of IPPs raise concerns that its profit-oriented nature undermines equitable access to electricity, particularly for marginalised communities. 

Addressing these concerns requires innovative strategies to ensure that the benefits of renewables are accessible to all without exacerbating energy inequalities. Moreover, IPP projects bid through the official bid windows and connected to the grid are unlikely to negatively impact energy access in the long term. 

Last, improved grid infrastructure is a critical enabler of these plans. The challenge presented by a lack of infrastructure is demonstrated in the failure of REIPPP bid window 6 to meet its generation goal. 

Aligning policies, regulations and plans with the development of interconnected microgrids could support and enhance rural electrification.

Where to from here?

Policy alignment and resilience must be strengthened as South Africa navigates the energy transition, loadshedding, future REIPPP bid windows and the increased pressures for decarbonisation. 

The interplay of social, economic and geopolitical factors requires the development of energy policies and plans capable of adapting to changing circumstances and capitalising on opportunities.

First, it must be noted that achieving a just energy transition that ensures equitable benefit as the adoption of renewable energy increases requires nuanced and effective strategies. Future policies, frameworks and plans should be carefully designed to mitigate the consequences of the transition.

Second, regular policy reviews, assessments and updates are essential to maintaining alignment, exploiting unforeseen opportunities and addressing emerging challenges. The introduction of a fixed timeframe for updates to the IRP presents a significant opportunity for policy review. 

In addition, policy review should be a collaborative effort involving the various stakeholders: government bodies, energy regulators, private sector stakeholders and civil society.

Third, policies should focus on developing a diversified energy mix that meets the needs of the various sectors of the economy. This can be done through integrated planning that considers the needs of different economic sectors and the development of regulations, frameworks and plans based on this.

Finally, developing clear regulatory frameworks and enabling long-term predictability and private-sector participation can support achieving policy goals. Moreover, it will be critical to avoid delays in implementation as demonstrated by the gap between bid windows 4 and 5.

South Africa stands at a critical juncture in its energy journey, where policies have laid the groundwork for a resilient and sustainable future, yet the implementation challenges persist. The maxim “great policies, but poor implementation” serves as a poignant reminder of the intricate balance required to turn ambitious energy visions into tangible realities.

Vincent Obisie-Orlu is a researcher in the natural resource governance programme at Good Governance Africa.

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.