Energy and Electricity

Powering Growth and Development: Energy and Electricity Policy Position 2022

As the world returns to a level of normalcy post the Covid-19 pandemic, it is chilling to consider that we may not be doing enough to avert or mitigate another looming crisis. Scientists warn that climate change and climate-related crises, an absence of significant reforms, threaten to alter weather patterns and to disturb the balance of nature. This could result in the loss of multiple species, and the destruction of crops and livestock leading to widespread poverty and displaced populations.

The use of fossil fuels in energy production is the primary contributor to global warming and climate change since burning fossil fuels releases large amounts of gas which traps heat in the atmosphere. The Paris Agreement, an international treaty on climate change, seeks to bind countries to commit to keep global warming below 2°C and ideally below 1.5 °C. If this to be achieved then every country will need to play its part. It is generally understood that the peaking of emissions will take longer for developing countries, and thus each country’s contribution should take into account their unique emissions profile, climate risks, resource needs, national priorities, capabilities, and responsibilities.

South Africa’s commitments have grown more ambitious but are still not adequate to meet its fair share contribution, considering its position as the top emitter on the African continent, and 15th in the world. South Africa’s position improves significantly, however, if emissions are viewed on a per capita basis. Nonetheless South Africa should do its best to chart a sustainable path for future energy production and consumption. Contrary to naysayers who view this as an elite agenda, poor communities often bear the brunt of polluted air and water, sick livestock and poor harvests. They will be among the key beneficiaries of clean energy, especially if South Africa can ensure a just transition.

The use of fossil fuels in energy production is the primary contributor to global warming and climate change since burning fossil fuels releases large amounts of gas which traps heat in the atmosphere.

The idea of a just transition has become very politically loaded and will mean different things to different organisations around the world. For us a ‘just transition’ towards lower-carbon technologies requires reducing the risks faced by people who might be most adversely affected. It includes workers, poor communities, and small businesses. A just transition would focus on maximising new opportunities and ensuring that as few as possible are left behind.

Our focus is on ensuring South Africa follows the least costly path which will secure reliable and sustainable energy and electricity. This will be achieved by wind and solar photovoltaic systems (PVs), complemented by flexible generation with gas-to-power and battery storage. This may indicate the best option to provide reliable electricity at the lowest cost. We take a cautious position on natural gas, and advocate instead for local or regional production of renewable, green hydrogen, green ammonia, and other green hydrogen- based derivatives, both for export and for local use.

With respect to nuclear we support the extension of Koeberg’s lifespan. However, we propose setting aside ambitions for new nuclear power generation plants in South Africa in the short and medium term, and instead to adopt a watching brief with regards to global developments in the international nuclear power sector. Especially in respect of the commercialisation of small modular nuclear reactors (SMRs), new generation large nuclear reactors, and nuclear fusion technologies.

South Africa should focus on smaller, micro-grid and off-grid hydroelectric power opportunities and withdraw from the Grand Inga project.

In light of policy commitments to achieve net-zero carbon emissions by 2050, we would ensure that exploration and prospecting for new oil and gas is managed according to strict environmental regulations and monitored accordingly. We strongly support the decarbonisation of the transportation sector away from oil, diesel, petroleum, kerosene, and coal- and gas-based liquid fuels. This requires a gradual move away from internal combustion engines to fuel-cell and battery powered electric vehicles, and the local production of renewable, hydrogen- based power fuels for cars, trucks, busses, and trains. In this regard we propose removing restrictive tariffs and to zero rate electric vehicles.

Furthermore, to continuously explore cost-effective green synthetic fuels (or e-fuels) as an alternative to traditional fossil fuels to fuel ships and aircraft.

Overall, a critical requirement is the orderly unbundling and restructuring of Eskom with the result being a diversified, competitive generation sector including several independent generation companies. In addition, a rationalised electricity distribution industry built around former Eskom and municipal electricity distributors, comprising a significantly reduced number of financially viable and sustainable Regional Electricity Distributors (REDs). As well as a competitive retail electricity sector comprising a diverse range of private-sector retail entities with experience in wholesale procurement, innovative repackaging, marketing and resale in a variety of retail offerings to meet the needs of different domestic and commercial customers and market segments.

The remaining Transmission entity of Eskom should become the future Eskom – this being a national, state- owned, independent transmission system and electricity market operator (ITSMO), responsible for power planning, procurement, contracting, grid system and electricity market operation.

South Africa’s political leadership, particularly the Minister of Mineral Resources and Energy has sent out confused messaging, on South Africa’s energy and electricity policy direction and its commitments to sustainability. The DA intends to be the party in South Africa tackling the issue of least cost, reliable, and sustainable energy and electricity with the clarity and seriousness it deserves in order to preserve a prosperous future for current generations, and those to come.

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