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Diversifying South Africa's renewable energy mix through policy

Thesis (MPhil)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: South Africa is one of the most energy-intensive economies in the world, with around 90 per
cent of its electricity generated using coal as a primary resource. As such, the South African
energy system remains on a highly unsustainable path, and the potential for long-term growth
and prosperity of the economy is thwarted. The alternative to conventional energy, renewable
energy, has unfortunately been relatively slow to take off in the South Africa market. This is
disappointing considering the country’s wealth of natural resources required for renewable
energy generation.
The potential of renewable energy to contribute to the South African energy mix is thus
significant. The transition to a green economy, and subsequently a more sustainable energy
future, is therefore achievable and realistic. However, national policies aimed at promoting
the deployment of renewable energy have been thwarted by inconsistencies, lack of
coordination, and proved relatively ineffective at increasing the country’s renewable energy
capacity to its full potential. The recent policy changes from a feed-in tariff to a competitive
tender approach dented investor confidence in the South African renewable energy industry
significantly. Nevertheless, renewable energy policy in South Africa is still in its infancy, and
valuable lessons are still to be learnt and incorporated into future policies going forward.
A critical analysis of the current policy identifies the need for amendment to the structure of
the policy landscape. The current policy strongly favours larger, more established and mature
renewable technologies, whilst completely neglecting smaller and less mature ones. This not
only results in a highly undiversified renewable energy mix, which has considerable
negatives in itself, but also reduces the ability of the policy to capture a host of significant
opportunities and advantages associated with small-scale renewable energy projects. The
importance of diversifying South Africa’s renewable energy mix was therefore ones of the
principal stances of this study, and intervention that ensured diversification within the
industry was therefore vital.
This study fundamentally designs and proposes a revised policy system that makes use of
both competitive tenders and feed-in tariffs within the policy framework. In essence, this
would allow for greater diversification within the renewable energy industry. The
competitive tender component should be used for larger, more established technologies and projects, while the feed-in tariff should be used to drastically stimulate investment in smaller
technologies and projects. By making use of a dual-mechanism system, the benefits
associated with small-scale renewable energy projects can be realized without any
noteworthy opportunity costs foregone. These benefits include diversification of the
renewable energy mix; stimulation of smaller technologies; increased job creation; and
stabilisation of supply volatility.
This study recommends that the current renewable energy policy in South Africa be
reassessed for both its relevancy within the South African context as well as its ability to
effectively promote the deployment of alternative energy technologies. In an ever-changing
and globalising world, where exogenous influences on national policies are stronger than
ever, it becomes necessary and of utmost importance that policies are evaluated constantly in
order to ensure their effectiveness is at optimal level. / AFRIKAANSE OPSOMMING: Die Suid-Afrikaanse ekonomie is een van die energie-intensiefstes ter wêreld, met steenkool
as hoofbron vir sowat 90 persent van die land se kragopwekking. Die Suid-Afrikaanse
energiestelsel as sulks bly dus op 'n onstabiele pad, en die potensiaal vir langdurige
ekonomiese groei en welvaart word geknel. As teenvoeter vir konvensionele krag het
hernubare energie steeds stadig veld gewen in die plaaslike mark – wat teleurstellend is as die
land se rykdom aan natuurlike bronne vir hernubare energie-opwekking in ag geneem word.
Hernubare energie het dus 'n aansienlike potensiaal om tot die Suid-Afrikaanse energiemengsel
by te dra. Die oorgang na 'n groen ekonomie, en gevolglik na 'n volhoubaarder
energie-toekoms, is daarom bereikbaar en realisties. Nasionale beleide oor hoe die uitrol van
hernubare energie bevorder word, is egter tot dusver gestrem deur ongereeldhede en 'n gebrek
aan koördinasie, en was gevolglik relatief ondoeltreffend om die land se hernubare
energiekapasiteit ten volle te verhoog. Die onlangse beleidsveranderinge vanaf 'n
toevoertarief na 'n mededingende tenderbenadering het beleggersvertroue aansienlik
geskaad. Suid-Afrika se hernubare energiebeleid is nietemin nog in sy kinderskoene, met
kosbare lesse wat geleer kan word en vir die pad vorentoe in toekomsplanne ingewerk kan
word.
'n Kritiese ontleding van die huidige beleid wys hoe nodig 'n aangepaste struktuur vir die
beleidsraamwerk is. Die huidige beleid begunstig groter, meer gevestigde en ontwikkelde
tegnologieë terwyl kleiner en minder ontwikkeldes heeltemal afgeskeep word. Dit het tot
gevolg nie net 'n hoogs ongediversifiseerde mengsel van hernubare energie nie, wat op sigself
'n aantal nadele inhou, maar boonop verminder dit die beleid se vermoë om vele
betekenisvolle geleenthede en voordele aan te gryp wat gepaard gaan met kleinskaalse
projekte vir hernubare energie. Dat die diversifisering van Suid-Afrika se hernubare
energiesamestelling belangrik is, was dus een van dié studie se hoofbenaderings, asook dat
ingryping ter wille van diversifisering binne die bedryf onontbeerlik is.
Hierdie studie bied 'n ingrypende ontwerp en voorstel vir 'n hersiene beleidstelsel, met
mededingende tenders asook toevoertariewe binne die beleidsraamwerk. Dit sal in wese
ruimte laat vir groter diversifikasie binne die hernubare energiebedryf. Die mededingende
tendergedeelte behoort vir groter, meer gevestigde tegnologieë en projekte gebruik te word,
terwyl die toevoertariewe kan dien om belegging in kleiner tegnologieë en projekte te stimuleer. Deur 'n stelsel van tweeledige meganismes kan die voordele van kleinskaalse
hernubare energieprojekte realiseer sonder die inboet van noemenswaardige
geleentheidskoste. Dié voordele sluit in, om enkeles te noem, die diversifikasie van die
hernubare energie-toneel; die stimuleer van kleiner tegnologieë met gepaardgaande groter
werkskepping; en toenemende plaaslike produkvervaardiging.
Met dié studie word aanbeveel dat Suid-Afrika se huidige beleid oor hernubare energie
heroorweeg word, rakende die relevansie daarvan binne die landskonteks asook die beleid se
vermoë om die ontplooiing van alternatiewe energietegnologieë doeltreffend te bevorder. In
'n voortdurend veranderende en globaliserende wêreld, met buite-invloede op nasionale
beleidsrigtings sterker as ooit, word dit noodsaaklik en uiters belangrik dat beleide
voortdurend heroorweeg word om die doeltreffendheid daarvan op die gunstigste vlak te
verseker.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/96742
Date04 1900
CreatorsValenti, Devan
ContributorsBrent, Alan, Stellenbosch University. Faculty of Economic and Management Sciences. School of Public Leadership.
PublisherStellenbosch : Stellenbosch University
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageUnknown
TypeThesis
Formatxviii, 161 pages
RightsStellenbosch University

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