By Jessie Taylor
An advisory body to President Cyril Ramaphosa has released its final recommendations on the country’s just energy transition plans and put forward suggestions on how to prepare local governments and increase skills development.
The Presidential Climate Commission (PCC) recently released its final recommendations on South Africa’s Just Energy Transition Investment Plan (JET-IP). The plan was unveiled by President Ramaphosa in November last year, but the PCC was requested to consult stakeholders and provide feedback on the plan.
The R1.5-trillion JET-IP was unveiled late last year and built on an $8.5-billion pledge from the United Kingdom, the United States of America, Germany, France and the European Union to help South Africa transition to a low-carbon economy.
The plan centres around the decommissioning of coal-fired power stations and developing green sectors to keep South Africa as a competitive trading partner while meeting climate commitments.
South Africa has already received around $300 million in concessional loans, each from Germany and France, but these have not yet been allocated to specific projects as the JET-IP implementation plan is finalised.
Following community consultations in Mpumalanga, Limpopo, and the Northern Cape, where the bulk of the country’s energy is generated, the PCC submitted its final recommendations to President Ramaphosa for government’s consideration.
The PPC’s report called for a transition-capable developmental state to navigate the complexities of transition, with a focus on capacity building at the local government level, funding to support electricity supply investments, integrated development planning, and budgeting processes.
The PCC also recommended the establishment of governance and oversight mechanisms for all transition funding and climate finance. This would allow the government to track international commitments.
Among the PCC’s other recommendations was the creation of an adaptation and resilience investment plan, which would give priority to water and food security, agriculture and tourism.
Dr Crispian Olver, the PCC’s executive director, said the PCC agreed with many stakeholders on the need to “remain prudent on the scale of the country’s foreign and domestic debt, the call for increases in grant and concessional finance, scaling up sustainable social ownership in renewable energy, and a coordinated industrial and financing policy.
Dr Olver explained that skills development came into sharp focus during consultations with stakeholders.
“Stakeholders across the board consider the just transition issues to be inadequately prioritised within the plan. On the positive side, what the plan does do… is to talk very explicitly to a range of just transition interventions in skills development, in economic diversification, and mine rehabilitation,” said Dr Olver.
A focus on renewable energy
He added that the consensus was that greater focus should be placed on skills development, and this part of the plan received some criticism.
“It’s partly because… if you look at the total skills development system, there’s a lot of funding available through the skills development levy and various funding flows to the Sector Education and Training Authorities (SETAs), Higher Education and Technical Vocational Education and Training (TVET) colleges but that’s not captured within the plan,” said Dr Olver.
“We make a number of recommendations around how to enhance those sectors, and it’s important because people are going to critique this plan from the perspective of the Just Transition and whether it lives up to all the requirements that must be factored in.”
According to Dr Olver, another key area of the JET-IP is the expansion and upgrading of the electricity grid.
“Grid capacity is a major constraint to scaling up the energy transition and that is the view across the board. Government, business, labour, civil society all back a strong focus on upgrading and expanding the grid,” he said.
“We note the Eskom transmission development plan, which talks about 8 500km of transmission lines needed by 2031. We fully support that and what we want to say is that in addition to government’s reforms, and moves to set up the State-owned transmission company, the JET IP needs to clearly indicate how this grid expansion is going to be financed.
The PCC said the country must remain focused on ramping up renewable energy projects and connecting them to the grid. It recommends that 50 to 60 gigawatts (GW) of renewable energy capacity be included in the country’s energy mix by 203.
The country needs to add 6GW to 8GW of renewables per year, Olver stressed, but this is currently being addressed by a 5GW bid window, to be launched soon, along with requests for proposals for 1.2GW of battery storage and 3GW of gas.
While the grants will kickstart South Africa’s energy transition, they will not be enough to fund the just energy transition in its entirety, said Olver.
“Everyone is united in considering these to be inadequate. But our recommendation is not to hold up implementation while we try and argue for more grants. We must… bank what we’ve got, move forward with implementation and continue to fight for more,” he said.
“We also note that the JET IP needs to be closely integrated into government’s overall fiscal policy and we make the recommendation that National Treasury needs to undertake fiscal review, integrate the JET IP into the Medium Term Expenditure Framework (MTEF) and more broadly, in fact, we’d like to see the whole Just Transition integrated into the MTEF.”
Find out more details about the JET-IP in the 6th edition of ESG: The Future of Sustainability