Introduction
The Minister of Energy, Ms. Tina Joemat-Pettersson accompanied President Jacob Zuma to the 2016 World Energy Forum (WEF) in Davos, Switzerland from 20-23 January 2016.
Whilst the theme of the 2016 WEF is “Mastering the Fourth Industrial Revolution” the South African team had set out our key messages under the theme “South Africa is open for business” with a clear set of objectives for the Davos visit:
- To raise the level of foreign investment in our country; and
- To further expand the footprint of our companies on the continent and globally.
The department of Energy plays a critical role in ensuring that energy continues to play a facilitative role in attracting investment into the productive sectors of the economy. The need to relay the message that South Africa is open for business is underscored by the concerns around recent power shortages, and to rebuild the confidence about secure power supply.
Deliberations
The Department of Energy indicated that the National Development Plan provides the framework of our developmental aspirations in the period up to 2050, including defining the objectives for the energy sector. These objectives include energy security, reduction in the cost of electricity, reduction in emissions and water consumption, increasing access to modern energy carriers, improving energy efficiency and diversification of our primary energy sources.
South Africa has therefore planned for an energy mix which includes coal, nuclear, gas, hydro and other renewable energies like solar and wind. Furthermore, a strong emphasis has been placed on regional integration, to exploit the synergies for complementary energy sources in the Southern African Development Community (or SADC) that align with our energy objectives. In this regard, South Africa will be pursuing interconnection with the SADC countries including Botswana, Lesotho, Zambia, Mozambique, Namibia and Democratic Republic of the Congo.
The department indicated that in the short term, a number of initiatives have been introduced to increase our power supply capacity. These include the connection of over 2000 Mega Watts of renewable energy power plants. An additional 6 000 Mega Watts of wind, solar photovoltaic and concentrating solar (or CSP), plus 1000 Mega Watts of coal power plants are under development. In 2015 South Africa commissioned a 300 MWatt peaking power plant and an additional 700 MW plant will become operational by March 2016.
The department also emphasised the need to create investor confidence through strong private-public partnerships and clear regulatory frameworks. The Renewable Energy Independent Power Procurement Programme (or RE IPP Programme) has been very successful in attracting foreign direct investment. South Africa has introduced one of the most successful renewable energy programmes in the world, with a further 11 000 MW of projects in the pipeline up to 2030. Investor confidence in the programme is borne out by each bidding round of the RE IPP Programme being substantially over-subscribed despite strong price competition.
The department indicated that more private sector investment is expected under the 2 500 MW coal-to-power programme which is currently under evaluation by the Department of Energy’s IPP Office and 3 100 MW of gas-to-power through Independent Power Producers programme, which will be launched by quarter 2 (July-September) of 2016. The gas-to-power programme also provides an opportunity for water desalination to address the drought and water constraints in the country.
The department also participated on a panel debate about Fossil Fuel Futures. In this regard, the Minister confirmed that South Africa will continue to exploit fossil fuels in a responsible manner. Currently it balances the South African energy requirements and South Africa is committed to honour the decisions that were made at COP 15, including:
- the emission profile of our energy mix is planned to peak, and then plateau (around 2020) and decline (around 2030) given the clean energy initiatives we have introduced
- energy efficiency improvements in electricity end-usage will play a big role in reducing our emissions and reducing dependency on fossil fuels
The Department of Energy further indicated that energy efficiency is also key element of our energy mix and that a tax incentive scheme has been introduced in support of energy efficiency interventions.
In conclusion, South Africa’s energy sector is vital in providing the energy security to support economic growth and to assist in meeting our developmental needs.
