Klima-, Energi- og Forsyningsudvalget 2024-25
KEF Alm.del Bilag 190
Offentligt
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Some reflections
on state of climate
transition in SA
Crispian Olver
Deputy Chair
Presidential Climate Commission
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Three inter-related transitions
•
High vulnerability to
climate change
•
Low-productivity,
carbon-intensive
economy
•
Weak public sector &
poor implementation
•
Extreme levels of
inequality & poverty
•
Decreasing per capita
income
•
Active civil society and
strong social base for
Just Transition
Source: WB SA CCDR 2022
South Africa 2024
Decarbonisation
Adaptation
resilience
Just transition
•
Economy & society
resilient to climate risks
•
Net-zero economy
•
Growing investment to
GDP ratio & competitive
economy
•
Effective & enabling
state
•
Dramatically reduced
levels of inequality,
unemployment &
poverty
•
Social inclusion and
just transition
South Africa 2050
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Political context
•
Ten-party Government of
National Unity established
after 2024 elections
•
GNU Statement of Intent
does not explicitly mention
climate change but signals
broad policy continuity
•
GNU includes pro-business
DA which supports
accelerated energy
transition
•
New technocratic Minister
for Electricity & Energy
supports more diverse
energy mix
 KEF, Alm.del - 2024-25 - Bilag 190: Materiale fra Klima-, Energi- og Forsyningsudvalgets studiebesøg til Sydafrika i uge 10 2025
Opening of Parliament Address by President,
18 July 2024
•
“Over the next five years, we will seize the enormous opportunity in
renewable
energy
for inclusive growth.
•
South Africa has some of the
best solar and wind resources
in the world.
•
As we undertake a just transition towards renewable energy, South Africa must
create a
green manufacturing sector
centred on the export of green hydrogen
and associated products, electric vehicles and renewable energy components.
•
We have seen, for example, how the Northern Cape has already attracted
billions of rands of investment in renewable energy projects.
•
Work is underway to set up a Special Economic Zone in Boegoebaai to drive
investment in
green hydrogen energy
projects.
•
We already have a huge pipeline of renewable energy projects, representing
over 22,500 MW of new generating capacity, estimated to be worth around
R400 billion in new private investment. Investments such as these will create
many jobs.”
 KEF, Alm.del - 2024-25 - Bilag 190: Materiale fra Klima-, Energi- og Forsyningsudvalgets studiebesøg til Sydafrika i uge 10 2025
Opening of Parliament Address by President,
18 July 2024 (cont.)
•
“Just this week, we saw the largest-ever
private energy project
connect to the grid near Lichtenburg in the North West, with over
390,000 solar panels that will add 256 MW to the grid.
•
We will see more of these projects taking shape across our country
in the months and years to come. As these investments reach
fruition
more jobs will be created.
•
Our
Just Energy Transition Investment Plan
sets out a clear path
to invest more than R1.5 trillion in a just transition, including
support for workers and communities in Mpumalanga and other
coal-producing regions.
•
South Africa is undergoing a
renewable energy revolution
that is
expected to be the most significant driver of growth and job
creation in the next decade and beyond.”
 KEF, Alm.del - 2024-25 - Bilag 190: Materiale fra Klima-, Energi- og Forsyningsudvalgets studiebesøg til Sydafrika i uge 10 2025
ANC lekgotla statement on energy security &
infrastructure development
–
Jan 2025
“Commitment to Energy Security and Infrastructure Development.
•
One of the key resolutions … is the urgent need to accelerate energy
security, starting with the stabilisation
of Eskom …
•
The ANC has committed to a bold plan to address the energy
availability, including expediting the rollout of renewable energy as part
of a just energy transition.
•
Eskom’s challenges are being resolved and will contribute to economic
recovery, industrialisation, and job creation.
•
We welcome the work being done with local government and ESKOM to
resolve the challenges of debt and load reductions.”
 KEF, Alm.del - 2024-25 - Bilag 190: Materiale fra Klima-, Energi- og Forsyningsudvalgets studiebesøg til Sydafrika i uge 10 2025
SONA February 2025
•
We have built meaningful partnerships between government and
business, labour, civil society and other social partners to drive growth
and development.
•
we will work with our municipalities to establish professionally
managed, ringfenced utilities for water and electricity services to
ensure that there is adequate investment and maintenance.
•
We are engaging local and international financial institutions and
investors to unlock R 100 billion in infrastructure financing. A project
preparation bid window has been launched to fast track investment
readiness. This includes revised regulations for public private
partnerships, which will unlock private sector expertise and funds.
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SONA February 2025
•
The measures we have implemented through the Energy Action Plan
have reduced the severity and frequency of load shedding, with more
than 300 days without load shedding since March 2024. While the
return of load shedding for two days last week was a reminder that our
energy supply is still constrained, we remain on a positive trajectory.
We now need to put the risk of load shedding behind us once and for all
by completing the reform of our energy system to ensure long-term
energy security. The Electricity Regulation Amendment Act, which
came into effect on the 1st of January, marks the beginning of a new
era. This year, we will put in place the building blocks of a competitive
electricity market. Over time, this will allow multiple electricity
generation entities to emerge and compete. We will mobilise private
sector investment in our transmission network to connect more
renewable energy to the grid.
 KEF, Alm.del - 2024-25 - Bilag 190: Materiale fra Klima-, Energi- og Forsyningsudvalgets studiebesøg til Sydafrika i uge 10 2025
SONA February 2025
•
As we reform our energy system, we are continuing to build
successful multilateral partnerships in the global effort to halt the
devastating impact of climate change. Our Just Energy Transition
is gaining momentum. Over 13 billion US dollars have been
pledged by the international community and significant private
capital is being invested locally. We are determined to meet our
carbon reduction commitments, and will do so at a pace and
scale that our country can afford.
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Approach to the draft MTDP: Three Strategic Priority Areas
▪
The draft MTDP 2024-29 proposes
three strategic
priorities
which are: i) Inclusive growth & job creation; ii)
Reduce poverty and tackle the high cost of living; iii) Build
a capable, ethical & developmental state.
▪
Inclusive growth and job creation will be viewed as an
Apex priority.
All spheres of government, clusters and
sectors will prioritise relevant economic interventions.
Strategic Priority
1: Inclusive
growth and job
creation
▪
The
three strategic priorities are interrelated and
interlinked.
▪
A capable state plays a key role (direct and indirect)
within the economy through regulation, network
industries and by creating an enabling environment, and
that law and order are maintained.
▪
The social wage is a key instrument for poverty reduction
and is a safety net for the vulnerable. It also ensures that
we have a skilled and healthy workforce, enabling
infrastructure and basic services.
Strategic Priority
2: Reduce
poverty and
tackle the high
cost of living
Strategic Priority
3: A capable,
ethical and
developmental
state
Medium Term Development Plan
Statement of Intent
National Development Plan
10
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Achieve more rapid, inclusive and sustainable economic growth and job creation
Outcome: Increased infrastructure investment and job creation
Invest in infrastructure development in key sectors of energy, communications, water and transport infrastructure, and focus on underserviced areas.
Simplifying the regulations on public-private partnerships to enable greater investment in both social and economic infrastructure development.
Maintenance of public infrastructure through dedicated programmes and establish systems to support this.
Outcome: Energy security and a just energy transition
Continue to implement the Energy Action Plan and achieve long-term energy security.
Expedite the rollout of the Transmission Development Plan and focus on expanding and strengthening the transmission network.
Implement the Just Energy Transition Investment Plan (JET-IP)
and ensure that South Africa’s transition to a low-carbon
economy supports
communities and workers in Mpumalanga and other affected areas.
Set up the special economic zone in Boegoebaai to drive investment in green hydrogen energy projects.
Outcome: Supportive and sustainable economic policy environment
Ensure that macroeconomic policy and a sustainable fiscal trajectory in support of growth and employment.
Development an integrated economic strategy that aligns fiscal policy, monetary policy, competition policy, industrial policy, innovation policy and
trade policy.
Outcome: Increased investment, trade and tourism
Prioritise the implementation of the African Continental Free Trade Area to increase our exports to the rest of the continent.
Strengthen economic diplomacy with our largest trading partners and potential trading partners.
Outcome: Science, technology and innovation for growth
Grow and transform SA’s science, technology and innovation capabilities, human resources and research infrastructure.
Invest in digital identity and payments, expand access to affordable broadband, and increase training for young people in digital skills.
11
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JETP funding pledges so far ($m, true JETP marked green)
Source: Krutham Dec 2024
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Some GNU legislative achievements
Climate Change Act 2024
•
Creates vertical and horizontal
climate governance
•
Establishes PCC as permanent
statutory body
•
Empowers Minister DFFE to
prescribe emissions trajectory
and set sectoral targets
•
Establishes cross-government
adaptation planning system
Electricity Regulation Amendment
Act 2024
•
Unbundles Eskom & establishes
NTCSA
•
Creates competitive electricity
market with multi-market model
•
Strengthens NERSA’s role in
licensing and regulating fair &
efficient market
•
Encourages private sector
participation to improve energy
supply
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Presidential Climate Commission
•
Set up by President in 2020 as an independent multi-stakeholder advisory
body
•
Has since undertaken research, consulted widely and made
recommendations on:
•
•
•
•
•
•
•
•
NDC 2021
Just Transition Framework 2022
KZN Floods 2022
JET Investment plan 2023
Electricity plan 2023
Komati decommissioning process 2023
Just Transition Financing Mechanism 2024
State of Climate Action 2024
•
Inclusive approach has allowed consensus on contentious issues
•
PCC mandate and functions now given statutory power
 KEF, Alm.del - 2024-25 - Bilag 190: Materiale fra Klima-, Energi- og Forsyningsudvalgets studiebesøg til Sydafrika i uge 10 2025
Energy regulations nearing completion
•
Last year Minister Electricity & Energy reopened consultations on draft
IRP, expected to be finalized Q1 2025.
•
Wheeling framework public hearings completed, NERSA expected to
finalise Q1 2025.
•
Curtailment and net-billing rules to be finalized Q1 2025. Curtailment
will unlock 2,680MW in the Western Cape and 790MW in the Eastern
Cape.
•
Energy one-stop shop launched in July 2023, full implementation
expected in Q1 2025
•
SA Renewable Energy Master Plan inexplicably delayed but due to be
finalized in Q1 2025
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Transmission
•
NTCSA board announced in early 2024,
began trading in July and officially
commenced operations in October.
•
Market code and market operator
licence required before launch of
market and system operator on 1 April
2026, to be finalized Q1 2025 and Q3
2025 respectively.
•
Eskom TDP estimates 14,000 km of
transmission lines required / 10 yrs, but
build rate is less than 10% of target
•
NT & DoEE launched RFI for
Independent Transmission Project (ITP)
in Dec 2024. First completed ITP
unlikely before 2028.
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Load shedding history and forecast
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Power generation capacity registered with NERSA under
licensing exemption conditions
Source: Montmasson-Clair
based on NERSA data 2024
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When it comes to new generation, private installations of solar PV have
kept us in the game
•
Approx. 10GW of RE
procured across
multiple bid
windows since
2011, but only 6GW
installed
•
Stop-start nature of
REIPPP and
constraints due to
grid access have
been disappointing
•
Private sector
generation has
passed the 10GW
mark
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Private sector cumulative generation
•
Over 10GW of
private sector
generation added
•
Approx 4GW of
mining and other
industrial
capacity coming
online in 2025
•
Another 1-1.5GW
of roof top solar.
Source: Krutham Jan 2024 based on NERSA data
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SA imports of solar panels, lithium-ion batteries and
inverters in US $ billion
•
At peak, SA
procured approx.
5GW of solar panels
in 2023 (vs. 1,3GW
in 2022.
•
Together with
batteries &
inverters, = $3,8b in
2023, double the
value in 2022
•
Over ten years, total
value of imports =
$10b
Source: Montmasson-Clair based on SARS data 2024
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There are positive indicators that we can reach the recommendations made
on renewable installations, with wind contributing at least 2-3 GW a year
The Transmission Development
Plan is planning for about 45
GW of installed VRE Capacity by
2032.
The July 2024 South African
Renewable Energy Grid Survey
shows enough interest from
developers to meet even the
most ambitious capacity
models.
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Summary of progress on climate transition
Mitigation
•
DFFE preparing
updated NDC and
sectoral targets
•
2
nd
phase of carbon
tax to be announced
in budget speech
•
NDoT reviewing green
transport strategy
• SA’s Article 6
Framework should be
completed in Q1
Adaptation
•
National Adaptation
Strategy adopted in
2017
•
Only a third of actions
in NCCAS are actively
being implemented
•
PCC has completed
review of disaster
management system
and design of Climate
Change Response
Fund
Just transition
•
Just Transition
Framework adopted in
2022
•
PCC published plan
for jobs in
Mpumalanga
•
NBI is leading work on
skills for transition
•
Industrial
development strategy
for RE (SAREM) close
to finalisation