Interview: Riding the green wave

13 September 2011

Currently, about 75% of ‘formal’ households in South Africa have access to electricity, up from 30% in 1994. Capacity.org spoke recently with South Africa’s energy minister, Elizabeth Dipuo Peters who was attending an African ministerial conference organised by the International Renewable Energy Agency (IRENA) meeting in Abu Dhabi. Minister Peters explained that South Africa’s success in meeting its energy needs is the result of its integrated approach to human development in which access to energy is viewed as a fundamental right and catalyst for achieving broader social, economic and political goals. On possible lessons for other African countries, she underlined that a country cannot develop in a vacuum and highlighted the role of regional and international initiatives in building Africa’s capacity to ‘ride the green wave’.

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Minister Peters, could you please describe for us the current status of energy access in South Africa and how the country envisions its energy future?

At the dawn of democracy, in early 1994, access to energy in South Africa was roughly 30%. Despite this, the apartheid government spoke of a power surplus, which was used to attract investors to establish smelters and other production facilities. Since the smelters created very few jobs and most of the power was exported, the incoming government realised that a new energy policy was needed that would benefit the people as a whole. We introduced an access policy called ‘ Free Basic Electricity Access’ and its related implementation programme, the Integrated National Electrification Programme. The goal was to expand access to electricity and other energy services to the broader community of South Africa, especially the predominantly (black) African population that had been marginalised under apartheid. The programme set 2014 as the deadline for reaching universal access to sustainable energy services for formal households.

In 2007, the government took a step further in realising this vision when it identified the need for a low carbon trajectory as a core component of our energy policy. Since then, we have enacted a regulatory framework to encourage Independent Power Producers and private enterprises to produce about 30% of the new power generation. To create a level playing field in a situation where the state utility holds a monopoly, we have also set up the Independent Systems and Market Operator to buy power from all producers at competitive prices. We also introduced a number of related measures including the Renewable Energy White Paper and the Renewable Energy Feed In Tariff; the National Environment Management Act and the Long Term Mitigation Scenarios. South Africa through President Zuma is also committed to the Copenhagen Accord.

Providing overall guidance for these initiatives is the Integrated Resource Plan (IRP) of South Africa (or Energy Mix Policy) which sets out the strategy for making use of all available resources. Our aim is to double our current capacity from about 42,000 MW to 85,000 MW.

The IRP’s goal is that 42% of this total capacity should come from renewable energy, with Wind and PV contributing 8400 MW and 1000 MW respectively over the next 20 years. Nuclear accounts for 9600 MW or 23%, while a further 15% will come from coal, with strong emphasis on clean coal. We are looking especially at underground coal gasification and carbon capture and storage technologies. All fossil fuel based plants going forward must be CCS (carbon capture and storage) ready.

These are very clear policy choices, but how do you break this down further into more specific programmes that have a real impact in terms of people’s lives?

Our starting point was a realistic assessment of the options available to us. Because South Africa is a water scarce country, our water availability and conservation goals informed our ability to develop that policy. We then approached specialised organisations that could help us translate these goals into tangible programmes. To give a few examples, UNDP helped us establish the South African Wind Energy Association and we also signed a Memorandum of Understanding with the Clinton Climate Initiative to do a feasibility study on the potential for solar. We have identified the ideal spot for a solar farm that would generate about 5000 MW over a period of 10 years.

We are also looking for technology partners to help us ensure that these new initiatives help to stimulate the local economy right from the outset. We want to make sure that we can grow our local industries because our energy policy is also informed by the need for security of supply by industry as well as household consumption. As we speak we are in the process of setting up the South African Renewable Energy Initiative, which is an instrument that will enable us to tackle issues of localisation as we try to scale up energy production from renewables to almost 20 GW of our production.

At the household level, we also have to make sure that our energy policy contributes to the “ Better life for All” theme, which takes a holistic approach to health and economic empowerment. We focus in particular on how to improve the lives of women by reducing their household chores while also contributing to poverty eradication. With access to reliable power women can start home industries and small enterprises.

But we also realise that when South Africa has interconnectivity it will not be good for our neighbours not to be able to tap into that. That is why there was need for us to invest in grid interconnectivity for the Southern African region as part of our energy mix plan.

In short, these are the principal elements that inform our energy policy: ability to grow the economy, low carbon, water consumption, affordability for the state as well as the end consumer, as well as regional integration.

That’s a very useful summary because it encapsulates so many of the issues that African ministers of energy discussed at the IRENA high-level consultations. Currently, not all of South Africa’s neighbours have the institutional capacities or economic resources to implement such integrated policies. Do you see an additional role for South Africa as a capacity builder in the broader region?

African energy ministries have access to quite a lot of platforms for exchange and technical cooperation. Some examples are the Conference of Energy Ministers of Africa, or the African Union’s Commission on Infrastructure, which facilitates collaborative approaches for tackling energy issues. Many private financing institutions as well as multilateral bodies like the African Development Bank and the World Bank are regularly invited to these fora so they can understand the challenges we are dealing with and tell us the criteria for receiving loans and how to involve the private sector.

As a country, we are actively using these platforms to share South Africa’s expertise and outline our national resources and priorities. For example we are currently carrying out a regional wind mapping exercise with the support of Denmark and an energy efficiency monitoring system with the support of the Swiss Development Cooperation.

South–South cooperation is also an important tool in capacity development. We are involved in the Africa–South America (ASA) agreement where we are learning lessons on biofuels from Brazil. Within the India, Brazil and South Africa (IBSA) Economic bloc, we have signed a Solar Cooperation Agreement allowing us to share policies, technology and expertise.

But even capacity building needs to be targeted. We need to look at the whole range of institutions on the continent and explore ways in which they can specialise, instead of duplicating resources. For example, we took a joint decision with Lesotho to build and start manufacturing of compact fluorescent bulbs in Lesotho to stimulate their economic development. We are also working with Mozambique to utilise its hydro and gas potential for power generation.

Based on South Africa’s experience, what are some of the critical measures that countries need to put in place so they can fully benefit from all these support instruments?

They must first know what their resource base is. You start with what you have and analyse how the available resources can be used to generate power in a sustainable way. The next step is to put in place the right mix of policies and regulations to stimulate energy production. An important element in this is ensuring that your regulators are capable and independent. Once these enabling conditions are in place, you can develop an integrated resource plan that sets out what resources you have and who can help you develop these further.

But a successful energy policy is not just about producing energy. It must also be affordable. So the government must also look carefully at how it can use subsidies in the public interest, while not compromising the returns of investors.

Needless to say, we can also expect challenges. In South Africa our energy policy is informed by our New Growth Path, which aims to create 5 million jobs in the next 10 years. As the purchasing power of the population rises, demand will grow because people expect their living conditions to improve. Once they switch on power, they will also want an electric kettle, an iron, something that they didn’t have. So people will have access to energy but no money to pay for it, which could lead to an energy revolution. Governments could be toppled because ordinary people cannot access to electricity or liquid fuels. We know of African countries that have allowed their primary energy natural resources to be exported without investing in developing energy access. I rest my case.

What would your message be to the international community meeting in Busan? How can they coordinate their efforts better to tackle these challenges?

International partners must be sensitive to the political dynamics, laws and regulations and development challenges of the country they want to support. It is important that you help a person to help himself and to become self-reliant. They should not come with predetermined packages of technical support as this ends up benefitting mostly the donor country. The resources they provide should help catalyse development in the partner country.

My colleague [Minister Ogunlade Davidson] from Sierra Leone spoke at the IRENA meeting of the ‘ lack of’ mentality in many African countries. The fact that one recognises his or her lack is capacity in itself, so we should build on that. But we must also recognise that many of Africa’s natural resources have become a curse and have not benefitted its people. South Africa produces gold and diamonds, yet a local person in Kimberley cannot afford a diamond ring. We cannot allow our natural elements like sun and wind to become another curse.

So I’m happy that the Director-General of UNIDO [one of the speakers at the IRENA meeting] described renewable energy as the next opportunity for Africa and stressed that Africa cannot allow itself to be left out of this green wave. We should ride this wave and make sure that it produces benefits for the people of the continent of Africa.

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Minister Dipuo Peters was interviewed by Wangu Mwangi, Web Editor, Capacity.org
Photo credit: Diego Noguera, IISD Reporting Services
 

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