SA's renewable energy programme: the hits and misses

South Africa’s 12-year-old Renewable Energy Independent Power Producer Procurement Programme offers insights for countries moving to cleaner power sources, say researchers.

There are many unknowns about how societies will manage the climate transition. And the associated energy transition from fossil fuel-based energy to renewable energy.

The climate transition will require significant levels of investment - estimated at US$1 trillion (R18,5 trillion) a year in developing markets, excluding China. This raises important questions about the mix of public and private sector investments; whether to subsidise private sector investment; how to regulate private ownership; and how to make affordable energy available to all citizens.

The speed of technological change and the uncertainty about future policies makes it hard to answer these questions. But countries that have put their toe in the water offer clues. South Africa is one of them. It developed a process for renewable energy procurement 12 years ago.

The Renewable Energy Independent Power Producer Procurement Programme is still considered a pathbreaker. Many have seen it as a blueprint because of its success in attracting investment by independent power producers.

Without investments under the programme, the country's electricity supply problems and power cuts would have been much worse.

The experience of the last 12 years therefore provides valuable insights about policy for the future. In a recent paper we reviewed the programme. We identified barriers and blind spots that have hindered South Africa from ramping up renewable energy generation at scale and speed.

We also found that the stop-start nature of the programme held back local production of new renewable technologies. And low risks for private investors did not trigger the required acceleration in the energy transition. This was related to the slow pace of government processes and the private sector's inability to meet certain developmental obligations.