Look to the sun: A home-grown solar industry key to a just energy transition

Achieving environmental sustainability through an accelerated decarbonisation agenda continues to gain momentum. But the plans that will ensure a just energy transition is achieved are stagnant. However, the reduction of carbon emissions is squarely on the agenda as climate mitigation measures are progressing, although climate adaptation lags behind in South Africa.

The recent 2020 Energy Transition Index (ETI) issued by the World Economic Forum ranked South Africa 110 out of 115 countries that are implementing an energy transition. Sweden, Switzerland, Finland, Denmark, Norway and Austria are the top six countries that lead the ETI. 

This means that a solid plan is needed in South Africa to diminish the prospects for an unjust energy transition. If this plan is not developed timeously, we are likely to see a fair share of losers in the country’s energy transition. 

Currently, the South African coal sector creates 93,000 direct employment and 170,000 indirect work opportunities with earnings of almost $1.67-billion. But the coal sector’s economic contribution is not environmentally sustainable, and as such all the coal power stations that would close would result in a decreased economic contribution.

It is critically important to note that the coal power stations are closing as they have reached their end of life. The decommissioned coal power stations would mainly be replaced by a combination of renewable energy technologies and gas power plants. Out of the 11,017 megawatts of coal power plants that would close by 2030, only 1,500MW of coal power stations would be built.

These planned coal power stations are likely to face financing challenges. Globally, banks are under pressure to stop financing fossil fuel investments. This means that if the fossil fuel financing boycott gains support, we might not see many new coal power stations funded.

With this knowledge, there are major questions we need to ask: first, how will South Africa achieve a just energy transition? Second, are we likely to find ourselves in an unjust energy transition? Third, what can South Africa do to avoid an unjust energy transition?

From the energy perspective, South Africa is currently confronted with an energy crisis that continues to negatively affect prospects for economic growth while climate change vulnerability is also increased. The country’s adopted energy policy aims to navigate energy generation towards a low-carbon economy.

However, if this is not carefully managed, it is likely to have increased losers, which would mean that the energy transition is unjust. From the economic trade-off standpoint, the economy can reach equilibrium – for example, increased sustainable energy technologies in our power system are likely to reduce the health impacts associated with air quality problems that are a direct cost for the government. This means that South Africa needs to enable new economic activities for coal phase-out regions.

As such, a recent journal article I co-authored, which evaluated the economic impacts of utility scale solar photovoltaic (PV) localisation in South Africa, demonstrates that an enhanced localisation can play a major role in increasing the economic impact that could be derived from solar PV adoption.

Moreover, another study recently published by the South African Photovoltaic Industry Association shows that the solar energy industry would continue to increase employment opportunities from both small-scale embedded generation and utility scale projects. This is an example of how a just energy transition could be achieved.

South Africa cannot only be users of sustainable technologies; it needs to localise technologies that would be used in our power system. A study conducted in Steve Tshwete local municipality (coal region) shows that only 14.3% of businesses in that area have participated in the solar PV sector.

The skills transfer needs to be prioritised as one of the major pillars for a just energy transition to ensure that the coal phasing-out regions increase their regional participation in the solar energy sector. DM