The Just Energy Transition is a shift to lower carbon technologies and resources, while ensuring that society, jobs and livelihoods will not be harmed. (CFOTO/Future Publishing via Getty Images)
In the past couple of years, South Africa has made progress in the evolution towards a cleaner and greener energy future. Among other things, the country has entered into investment agreements with several foreign entities, established Eskom’s Just Energy Transition Office that focuses on achieving “Net Zero” carbon emissions by 2050, developed just energy transition policy and frameworks and appointed an electricity minister.
The Just Energy Transition is a shift to lower carbon technologies and resources, while ensuring that society, jobs and livelihoods will not be harmed. As it stands, 77% of South Africa’s greenhouse gas emissions are from energy — either electricity, heat or transport used by industry and households — with 86% of South Africa’s electricity coming from coal-fired power stations.
In light of the effects of climate change and degrading power supply (load-shedding), the Just Energy Transition is important for the country’s growth and sustainability by ensuring energy supply at household and business level. Other benefits of moving towards lower carbon technologies is the positive effect on air quality and water usage, the potential to create new jobs, economic growth and a greater preservation of biodiversity.
But, given the urgency for the Just Energy Transition to happen, it is questionable whether the public procurement process will be inclusive of youth and women. Public procurement is a crucial instrument of government to advance gender equality and youth unemployment, and to exploit the potential of women and youth as significant mainstream economic actors. The Just Energy Transition is an opportunity for the government to create an inclusive public procurement process that empowers women and youth to enter into green sectors and provide essential services to the advance of a green economy.
Although the government has set a target of 40% of public procurement for women-owned and managed businesses, the new changes to the broad-based black (BEE) economic empowerment laws has brought questions whether that will be possible. In January, Finance Minister Enoch Godongwana repealed specific regulations within the Preferential Procurement Regulations 2017, making it unnecessary for state-owned entities to rely solely on BEE-compliant companies during procurement procedures. The new regulations empower state organs to determine their own preferential procurement policies.
Entities such as Eskom could exclude businesses led by youth and women that may bid to provide products or services for Just Energy Transition work. They will compete with large businesses that are predominantly owned by white men.
The biggest challenge faced by youth and women who own businesses is the systemic exclusion at financial and institutional level. Youth and women are still perceived as incapable of successfully leading business ventures despite proven capacity. Another challenge is poor skills, knowledge and capacity to take on entrepreneurship because of limited opportunities and resources.
There are many youths and women who are not in green industries but efforts should be made to include them.
The government will require services relating to customer management in terms of energy supply, managing rehabilitation liabilities, conducting studies of socio-economic effects of plant shutdown on employees and communities.
Public procurement needs may include services to repurpose ageing infrastructure, increasing the availability of renewable energy and gas, energy storage services and provision of innovative technology like smart grids or micro grid options. In the area of the transition, the government will need to procure services such as managing revenue streams for Eskom, establishing a regulatory environment for independent power producers, management services to transform and integrate the new transmission, distribution, generation modal in Eskom and governing private sector financing partnerships.
Government needs to create a supportive environment for youth and women-led business development. First, it needs to provide technical business capacity, interest-free funding, mentorship and targeted support. Second, it should ensure that state-owned entities’ rules increase opportunities for black women, youth, people with disabilities, small and medium enterprises and suppliers from rural or low income areas. Third, it should be compulsory to subcontract at least 30% of large tenders to businesses owned by youths and women.
The government should see this transition as an opportunity for the economic empowerment of youth and women, especially in light of South Africa’s high unemployment rate and the wide gender economic gap. Procurement officials should focus on long-term supplier relationships, and local economic development that favours emerging youth and women local suppliers to achieve sustainable and inclusive public procurement for the Just Energy Transition.