The energy conundrum.

Author:Williams, Stephen
Position:New African Markets: ENERGY - Energy security in South Africa

South Africa, Africa's most industrialised country, is grappling with a serious energy shortfall. Complicating the energy issue further are political and environmental concerns about possible solutions--coal and nuclear--against the backdrop of the country's high levels of greenhouse gas emissions. Stephen Williams unravels the complex picture from the 7th African Energy Indaba in Johannesburg.

The annual African Energy Indaba attracts delegates from across the continent. Held every February, with over 100 expert speakers, it bills itself as Africa's premier energy event. But while the conference certainly has a pan-African flavour, much of the discussion revolves around the host country South Africa's troubled energy landscape.

South Africa's citizens and businesses have been warned by the electricity parastatal, Eskom, to expect further rolling blackouts and this month an 18% hike in tariffs--even as government provides $2bn in taxpayer's money to bail out the utility company.

The Indaba took place a few days after President Zuma's State of the Nation Address, which detailed some of the country's energy woes. He said, "The country is currently experiencing serious energy constraints, which are an impediment to economic growth and are a major inconvenience to everyone in the country."

South Africa has about 43,000MW of installed electricity-generating capacity but only about 30.000MW is available at any one time because of the backlog in power station maintenance, which is said to be between 20 and 30 months in arrears, and an ageing grid infrastructure.

Zuma's government is looking to renewable energy to help bridge the gap. The government had already procured almost 4,000MW of renewable energy, through the Renewable Energy Independent Power Producer Procurement Programme (REIPPP), from independent power producers who have pledged to invest R140bn ($11.6bn). Of this new energy, 1.500MW comes from 32 projects that are already connected to the grid, with the remaining 2,400MW sourced but not yet completed.

Blessed with excellent solar and wind potential, South Africa is in the top 10 countries in the world for renewable energy investments. The World Bank reported in 2014: "In less than three years, South Africa has signed up more investment for more independent [renewable] power generation than has been achieved across the entire African continent in 20 years."

Indeed, Bloomberg's Climatescope 2014 report says that South Africa accounts for 90% of clean energy...

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