Current Crisis Provides Opportunity to Accelerate South Africa’s Energy Transition

This month the World Economic Forum (WEF) published its 2020 Energy Transition Index (ETI): from crisis to rebound that flagged the risks posed by the Covid-19 crisis on the energy system transition of countries to a clean and sustainable energy future.

The Index benchmarked 115 countries on their current energy system performance and their readiness for transition to secure, sustainable, affordable, and inclusive energy systems. South Africa ranked 106th with a transition readiness of 38%.

Every crisis calls for decisive leadership to ensure that it doesn’t derail governments, corporations and institutions in delivering on their mandates and mission. In the current Covid-19 pandemic, the WEF report highlights opportunities for us to accelerate our energy transition.

“As countries act to control the economic and social consequences of COVID‑19, the situation today could provide an opportunity to leapfrog into the energy transition. Applying economic stimulus to areas such as energy infrastructure modernization, research and development, and human capital development can deliver long‑term sustainable economic growth, while also achieving step change in the energy transition.”

I was encouraged to see that our Minister of Environment, Forestry and Fisheries, Barbara Creecy recently dismissed appeals against plans for a 140 MW Juno Wind Farm on the West Coast. Also, our Minister of Mineral Resources, Gwede Mantashe published new draft regulations that will allow municipalities to procure their own power. The regulations will permit municipalities in good standing to apply to the Minister to establish new generation capacity.

These are encouraging developments, but we need to speed up the momentum and grasp the nettle of this crisis. This moment provides unique impetus for restructuring of our economy and can be seized to expedite greater collaboration for public, private sector partnerships in South Africa’s energy systems.

The time is coming when foreign direct investment will no longer favour coal-intensive economies like ours. This future reality looms as global pressure for environmental, social and governance (ESG) criteria continue to gain ground.

Our economy’s future depends on our ability to secure affordable, clean energy. We owe it to our children to build energy systems that will launch them into a prosperous future as part of a global community which supports environmentally responsible economies.

*Greg Nott is the Head of the Africa Practice at Norton Rose Fulbright and specialises in Energy projects and deals.