The current grants allocated to South Africa – totalling $8.5 billion (R162 billion) – will not be enough to fund the country’s just energy transition investment plan (JET IP).
This emerged when the Presidential Climate Commission (PCC) yesterday released two reports on SA’s JET IP, following extensive stakeholder engagements within the first three months of this year with communities, labour, civil society, faith-based groups, business and other groups.
The first report covers stakeholder perspectives on the plan, while the second is an appraisal of the JET IP, with the PCC’s recommendations.
The JET IP was released last year and sets out government’s plans for SA’s priorities of investment, as it transitions towards a low-carbon economy.
The reports come as the country continues to experience crippling power cuts, with embattled power utility Eskom struggling to keep the lights on.
The blackouts have largely been blamed on Eskom failing to maintain its ageing coal-fired power plants, among a host of other issues, including corruption.
Amid the power shortages, SA has gradually been shifting from fossil fuels to renewable energy sources, with some coal-fired power stations being decommissioned.
Dr Crispian Olver, executive director of the PCC, explained that during consultations, skills development came into sharp focus from participants.
Olver said the country must focus on ramping up renewable energy projects and getting those onto the grid quickly, while also focusing on other sources of energy, including battery storage and gas.
“In light of the current energy crisis, the focus is to get as much public and private investment in renewables and battery storage onto the grid [as possible].
“We fully support the measures that have been taken to scale-up imbedded generation. There is a huge exponential rise now in investment taking place in renewable energy – that’s a positive trajectory.
“We reckon that you need to be doing renewables at about 6GW to 8GW per annum – a significant increase from where we’re at. But we’re starting to see that kind of scale of rollout now.”
Turning to the financing of the JET IP, Olver said the current grants allocated to SA will not be adequate to fund the programme.
To complete the JET programme, SA needs about $99 billion (R1.9 trillion), according to reports.
In November, SA’s JET IP was endorsed by the International Partners Group, which includes UK, US, Germany, France and the EU.
The countries initially pledged $8.5 billion to aid the country’s shift from coal, and also plan to make available an additional R10 billion.
“Everyone is united in considering these to be inadequate. But our recommendation is not to hold up implementation while we try and argue for more grants. We must…bank what we’ve got, move forward with implementation and continue to fight for more,” Olver said.
“We also note that the JET IP needs to be closely integrated into government’s overall fiscal policy and we make the recommendation that National Treasury needs to undertake fiscal review, integrate the JET IP into the Medium-Term Expenditure Framework (MTEF) and more broadly, in fact, we’d like to see the whole just transition integrated into the MTEF.”
Olver added another critical aspect to the JET IP is the expansion and upgrading of the electricity grid.
“Grid capacity is a major constraint to scaling up the energy transition and that is the view across the board. Government, business, labour and civil society all back a strong focus on upgrading and expanding the grid.
“We note the Eskom transmission development plan, which talks about 8 500km of transmission lines needed by 2031. We fully support that and what we want to say is that in addition to government’s reforms, and moves to set up the State-owned transmission company, the JET IP needs to clearly indicate how this grid expansion is going to be financed.”
Share