Page 28 - Vol 33 Issue 34 2021

Renewable energy should power South Africa’s future economic growth
energy Commentary

Renewable energy should power South

Africa’s future economic growth

Patrick Grant McLennan

outh Africa’s immense potential for a Green Economy and renewable energy – particularly solar, wind and
Shydro energy – can help secure the country’s energy supply, boost foreign direct investment and improve our
credit rating. Fostering a Green Economy also means creating employment opportunities and helping the country
meet its future climate commitments, writes Patrick Grant McLennan.

Energy – renewable or non-renewable – is a Yet despite the significant opportunity, South
substantial part of the global economy. As Africa’s Integrated Resource Plan continues to
the global population grows and new energy- prioritise the ongoing use of coal in the future
intensive industries emerge, we need to think – not surprising given that the mining sector
about meeting these needs in a more sustainable, is a substantial employer. Additionally, as
holistic, and affordable way. ongoing media reports have outlined, many in
To put it into perspective, doubling the share senior positions (both public and private) have
of renewables in the global energy within the benefited (for years) from over-inflated tender
next decade would see the global GDP increase deals, and are unwilling to release their clutches
by around 1.1% or $1.3 trillion, according to The from the parastatal just yet. This is despite debt
International Renewable Energy Agency (IRENA). investigations amounting to R411 billion (and
The rapidly decreasing cost of renewable questionable tenders to the tune of R178 billion).
energy production, alongside more favourable Even the National Treasury admits that Eskom
policies for solar and onshore wind generation is the largest threat to our country’s future
have made a strong business case for alternative economic development.
energy sources in South Africa, especially in Though reality cannot be denied. The IRENA
light of the beneficial long-term impact of report goes on to say: “In South Africa, over the last
sustainable energy in terms of climate change, 20 years, underlying coal production costs have
human welfare, and future global green trading risen significantly, rendering coal increasingly
agreements. uncompetitive against other fuel sources. At the
South Africa has immense potential to same time, the deployment costs of renewable
expand into renewable energy production energy have decreased by over 50% for both
when compared with other regions. The country solar PV and onshore wind since 2011.”
boasts some of the most sustained sunlight in If Eskom were to source, and subsequently,
the world and an abundance of water along supply a steady flow of renewable energy via
its 2 800-kilometre coastline. The Planning and Independent Power Producers (IPPs) as part
prospects for the renewable power: Eastern and of the Renewable Energy Independent Power
Southern Africa report, published by IRENA in April, Producer Procurement Programme (REIPPPP),
found that South Africa’s largest wind zone, an area this would create more investment certainty
of 792 km in the southern region the country, within the private sector, including from coveted
2
has projected 5 808 GWh of wind energy by foreign investors.
2030. This represents a significant investment The dire state of energy in South Africa hits
opportunity to diversify the power infrastructure closer to home than just the revolving door
of the country and the region. of coal tenders. Nowhere is this more evident
Diversifying the country’s energy mix to supply than seeing the value of the rand. The rand is
consistent power will provide opportunities infamously one of the world’s most politicised
for the public and private sector to catapult currencies, and has devalued substantially in the
beyond current projections, while creating new last decade. Each time South Africa is hit with
job opportunities, even if the renewable energy another series of blackouts (or “load shedding”)
supply is largely deployed using Eskom’s existing or the government makes yet another faux pas,
infrastructure and municipal power grid. the rand takes a hit. This translates to rating

28 | AFRICAN POWER Mining & Oil Review Vol33 Issue 34 2021