By The economy of South Africa is highly reliant on fossil fuel; this poses an economic challenge for the country as the world changes rapidly and is making strides to decarbonise in response to climate change.
During the inaugural Just Energy Transition (JET) Municipal Conference in Johannesburg on Monday, 26 August 2024, it was highlighted that municipalities play a pivotal role in ensuring a just transition to green, renewable climate friendly energy as 165 municipalities are electricity service providers.
During his key note address, the President of South Africa H.E Cyril Ramaphosa said the country needs to align itself with global trends, a shift from fossil fuel to clean energy. He said the country is carbon intensive as industry is highly reliant on fossil fuel.
“Electricity generated from fossil fuels accounts for most of South Africa’s carbon emissions. Because industry is still mainly reliant on power produced by Eskom’s coal-fired power stations, our entire economy is carbon-intensive.
As the world changes, our reliance on fossil fuels to industrialise poses a significant risk. It poses threats to our economy, society and environment if we do not drive the energy transition in ways that are appropriate to national and local circumstances,” said Cyril Ramaphosa.
Ramaphosa said South Africa is lacking behind as most of its trade partners are taking measures to achieve a net zero within a certain period of time; this affects the country’s ability to compete on the global stage as it has implications for South African goods and products entering the global markets.
The shift in the global economy also forces South Africa to make adjustments. Though the country is mainly reliant on fossil fuel, Ramaphosa said the country will have to align itself to the changes or the country will become irrelevant.
“Just as we continue to oppose unilateral and coercive carbon adjustment measures by developed economies, we realise the need to reduce our reliance on carbon intensive energy production. We see the need to diversify our energy sources to grow our economy.
There are great prospects ahead if the country takes advantage of the global energy transition to support economic growth, development and employment creation. As a signatory to the Paris Agreement, South Africa is committed to contributing its fair share to the global climate change effort,” he said.
The President told the Mayors and municipal delegates from across the country present at the conference that the country has an Integrated Resources Plan that outlines a viable energy mix to be rolled out over the medium and long term.
He said they have a successful Renewable Energy Independent Power Producer Procurement Programme which has attracted over R209 billion in investment and added much-needed capacity to our electricity grid.
“The regulatory changes we introduced in 2021 to increase the licensing threshold for generation projects has resulted in a pipeline of over 130 confirmed projects. This amounts to approximately 22 500 MW of capacity with an estimated investment value of R390 billion,” said Ramaphosa.
President Cyril Ramaphosa told the conference that municipalities play an integral part in decarbonising the energy sector as they own almost half of the energy distribution grid and facilitate universal access to electricity.
“Municipalities therefore need to be in the driving seat when it comes to providing clean, affordable energy to communities, businesses and industry. One of the aims of this conference is to unlock the institutional arrangements required to drive the decarbonisation effort.
The Just Energy Transition Implementation Plan approved by Cabinet last year includes a dedicated municipal portfolio roadmap,” remarked Cyril Ramaphosa.
He highlighted three areas of focus the first being the provision of access to affordable clean electricity. He said municipalities are now able to purchase power directly from independent power producers and establish their own power-producing entities.
The second area of focus is the issue of sustainable financing for electricity infrastructure.
“The municipal grid system needs to be upgraded, modernised and extended. The energy generation of the future requires systems that are fundamentally different in terms of design, capability and operation.
Smart metering will have to accommodate the increased penetration of renewable energy at different scales. It will need to facilitate wheeling and feed-in by small-scale embedded generation. Massive investment is needed to ensure optimal grid control, safety and energy storage. This investment will need to draw on both public and private sources of capital,” said the President.
The third area of focus is to strengthen the capacity of municipalities to manage the transition.
“This requires extensive training and up-skilling. New systems will be required to identify human resource, technical capacity and other needs within municipalities, and plan and budget accordingly. Municipalities will need to adopt best practice when it comes to the design and implementation of programmes and projects,” said Ramaphosa.
