Tag: energy security

South Africa is transitioning from fossil fuels toward renewable energy. The government aims to add at least 19 GW of renewable capacity by 2030. By 2050, the country targets as much as 190 GW. These targets are critical for climate resilience and energy security. Yet, the social design of this transition is dangerously overlooked.

Africa is making slow, steady progress towards energy security, which will only be enhanced through collaboration. Energy access is undeniably one of the most crucial components of modern day living. Reliable energy supply ensures that economies are growing by supporting critical industries like mining, manufacturing, agriculture, healthcare and education, while improving the lives of billions of people.

Let's face it: South Africa's power grid is not winning any awards for reliability. Our data centres are feeling the heat - and not in a good way. These digital powerhouses not only keep our online world spinning but are also fuelling the recent Artificial Intelligence (AI) revolution - yet their ever-expanding capabilities hinge on one critical requirement: an uninterrupted power supply.

With an economic growth forecast of only 1.6% over the next three years for South Africa, businesses are facing a tough trading environment, exacerbated by the impact of geopolitical tensions, disruptive new technologies, persistent weather catastrophe threats and failing public infrastructure and services.

Today, many power industry stakeholders are faced with mounting requirements for improved grid reliability, resilience, and distribution efficiency. It’s a challenge which requires power service providers to rethink their infrastructure, particularly making the most of smart grid philosophies in their deployments.

South Africa’s total energy capacity of 54.6 GW (excluding imports) should theoretically be sufficient for energy security and spare generating capacity, but it is not - as evidenced by record-level load shedding in 2022 and 2023. This was highlighted in the recently released Africa Energy Review 2023 report by PwC, which noted that the country is trying to remedy the situation by transitioning away from coal-generated power to renewables and gas – and even (to many experts’ dismay) nuclear.

We are pleased to share our second South Africa Economic Outlook report for 2023. In the wake of Budget 2023 and announced incentives for investment in solar power generation, this edition focuses on green incentives and their role in encouraging local businesses to invest in renewable electricity generation.

Last year, South African businesses were spared from Eskom’s proposed 32% tariff hike, which would have come into effect from 1 April 2023, with energy regulator National Energy Regulator (NERSA) postponing its decision on this for the next two financial years.

South Africa’s franchise sector has shown tremendous resilience, first withstanding the heaviest effects from economic lens of the COVID-19 pandemic, secondly, looking at how global economies, suffered from the knock-on effect of the Russian war in the Ukraine.

One unexpected consequence of the war in Ukraine is to boost the case for renewable energy. The simple fact that the crisis has pushed fossil fuel energy prices higher has certainly highlighted the economic arguments. From the point of view of energy security and resiliency too, the crisis seems to accelerate further the timeline of adoption.