South Africa Leads the Charge in Nations Transitioning to Renewable Energy Plans

South Africa’s journey towards decarbonisation via the Just Energy Transition Partnership (JETP) has been described as one of the major achievements of the 2021 United Nations Climate Change Conference, more commonly referred to as COP26. The government announced a major U.S.$8.2 billion deal with the UK, the U.S., Germany, France and the European Union. The climate-finance agreement aims to invest in renewable energy and move away from coal for South Africa over the next three to five years. COP27 will be held from November 6 to 18, 2022 in Sharm El Sheikh, Egypt where implementation of the JETP investment plan – identifying the projects and activities required to achieve a just transition – is expected to be discussed at the conference.

According to Climate Leaders, these annual United Nations Climate Change Conferences conferences are held in the framework of the United Nations Framework Convention on Climate Change (UNFCCC). They serve as the formal meeting of the UNFCCC parties (Conference of the Parties, COP) to assess progress in dealing with climate change, and beginning in the mid-1990s, to negotiate the Kyoto Protocol to establish legally binding obligations for developed countries to reduce their greenhouse gas emissions.

South Africa’s announcement comes at a time when 77% of the nation’s greenhouse (GH) gas emissions are from energy production, according to the Presidential Climate Commission. Additionally, South Africa is listed as the 13th-largest emitter of GH gasses, according to the Global Carbon Atlas and relies on coal to produce 70% of its electricity generation.

The JETP has become an example for other countries to follow with Senegal, Indonesia, Vietnam and India announcing JETP plans of their own. However, questions remain on how smaller nations such as islands in the Caribbean, Indian Ocean and Pacific – specifically developing economies – may secure similar collaborations.

The Carnegie Endowment for International Peace Africa Program and the African Climate Foundation held a panel discussion this week on the JETP including how its implementation in South Africa may be applied to other nations on the continent and the changing role of the international community in mobilising climate finance.

The state of South Africa’s energy crisis

In July 2022, President Cyril Ramaphosa announced a set of actions to respond to South Africa’s years-long energy emergency. “The crisis that we are facing requires that we should take bold, courageous and decisive action to close the electricity gap,” he said in a televised address to the nation.

Rolling, scheduled blackouts, otherwise known as “load shedding”, have become a mainstay for South Africa for more than 15 years. The crisis has been exacerbated by the poorly maintained infrastructure of coal-fired power stations across the nation which frequently require maintenance. Based on the current trajectory, South Africa requires R1.2 trillion by 2030 to ensure enough generation capacity to meet demand, Eskom chief executive officer Andre de Ruyters said in Business Tech. Further, the embattled national power utility is saddled with over U.S.$400 billion debt.

As a result, South Africa has started making inroads towards establishing greater investment in renewable energy. The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was created in light of the JET to urgently address the country’s energy needs and deficit by adding more megawatts to the grid through renewable energy sources.

“The JET framework underscores, combating climate change is not only an environmental imperative, but an economic one as well. This framework is an evidence-based document and a victory for evidence-based policymaking. The publication of this framework must now serve as a call to action to each of us to embrace the opportunities presented by a low-carbon, inclusive, climate resilient economy and society,” President Cyril Ramaphosa said.

Sustainable development, economic growth not mutually exclusive?

Speaking at the “South Africa’s Just Energy Transition Partnership: A Model for Climate Financing for Africa?” discussion, Rudi Dicks – head of the Project Management Office in the Presidency of the Republic of South Africa – gave insight into how the JETP was devised along with how it fits into the nation’s overall economic strategy.

“The objectives of JETP align with South Africa’s broader economic strategy,” Dicks said, adding that sustainable economic growth and development is viewed holistically with tackling climate change, particularly by targeting the goals set in the United Nations Framework Convention on Climate Change (UNFCCC). According to the United Nations, the UNFCCC established an international environmental treaty to combat “dangerous human interference with the climate system”, in part by stabilizing GH gas concentrations in the atmosphere. It was signed by 154 states at the 1992 United Nations Conference on Environment and Development held in Rio de Janeiro.

Dicks went on to say that while decarbonisation was a primary aim of the JETP, the necessity of a diversified economy was also essential to better facilitate the creation of sustainable power generation. “Anything you do in electricity around sustainability would immediately cut across the entire economy but we also felt they were important sectors of our economy given that we are a relatively diversified economy,” he said.

Dicks also clarified how the JETP partnership funds would be allocated. “The way the U.S.$8.5 billion will be dispersed and spent is on the basis that we’ve agreed to develop an investment plan for sustainable growth, so we’re in the process of finalizing an investment plan on the basis of the JETP that could be a blueprint for South Africa.” Dicks added that the unveiling of a potential investment plan would be made at the next COP conference, saying that it would first require governmental approval. “It has to be improved by ministers, it has to be approved by Cabinet, as you know. Of course we’ve entered into a lot of consultation with different stakeholders around this so it is a process that you’d have to follow to ensure that again we take everybody along and everybody is happy with it,” he said.

A ‘different context’ for Senegal’s JETP

The headway made by South Africa in its JETP plans led to Indonesia and Senegal to pursue similar climate goals. Fatou Thiam Sow is the Planning and Studies Unit lead at the Ministry of Oil and Energy in Senegal. Heading a team composed of statisticians, economists, and planners, as well as sectoral focal points, she is responsible for coordinating the development of energy policy as well as the Energy Information System which publishes analytical reports on the energy sector.

According to Sow, a JETP for Senegal would require the inclusion of socioeconomic development opportunities in the energy sector along with priority access to universal access to affordable and reliable energy for households and businesses. “Also it will include our engagement related to climate and to climate change,” she said.

In this regard, Sow said that Senegal could more easily adopt a JETP since the nation’s economy has less reliance on natural resources, even in light of the discovery of oil and gas made in 2014. “A JETP must be an opportunity to also develop the economy and to develop new businesses for our people. Without this, the energy transition won’t be a success.”

Sow said that Senegal’s JETP must, like South Africa’s, be one that simultaneously facilitates a switch to renewable energy while also ensuring economic growth and opportunity. While Senegal is a low contributor to GHG emissions, Sow said the nation’s JETP is also one that focuses on energy security. “The context of the crisis we have has shown us that energy security is important … Energy security is very important. The South African experience is very useful for us. The context is different but the challenges are the same.”

Indonesia – Past vs Future

A JETP between Indonesia and the Group of Seven (G7) nations was drafted with the intent to support energy policy reforms by decarbonising the nation’s energy system and increasing energy efficiency, according to Trend Asia. According to Edo Mahendra, special advisor to the Coordinating Minister for Maritime and Investment Affairs of the Republic of Indonesia, Indonesia is roughly one year behind South Africa’s JETP process.

“The philosophy of the Just Energy Transition for Indonesia is that it should be part of our decarbonisation efforts,” Mahendra said. Research by Carbon Brief found Indonesia to be the fourth-highest producer of GH emissions in 2015. Additionally, and in similar fashion to South Africa’s government who claimed to have no plans to move away from coal use despite the JETP, Indonesia’s government has taken contradictory steps amid their own JETP commitments, attempting to construct at least 13.5 GW of new coal-fired power plants in various stages.

According to Mahendra, Indonesia still aims to transition to a low-carbon economy and decarbonise while adhering to the essential “puzzle piece” of a Just Energy Transition. Mahendra also gave insight into what kind of Energy Transition Indonesia hopes to achieve. He cited energy security and affordability as being non-negotiable. “If it’s not affordable, it’s not just,” he said. Mahendra added that traditional economic growth is something only enjoyed by a select number of countries since it is energy-intensive, an aspect that developing nations struggle to overcome.