The socio-economic energy challenge

  • by African Times
  • 1 year ago
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South Africa desperately needs economic growth to redress past inequalities and the energy sector should play a cardinal role in this, writes David Mahlobo.

ACCESS to Energy has long been recognized as a key element to sustainable economic development, and can be considered as key to a triple helix model that brings together economic growth, human development and environmental stability.

This is a fact that was highlighted in the latest report of the International Energy Agency “Energy Access Outlook 2017” released on 19 October 2017. In 2015 a total of 193 countries across the globe adopted “access to sustainable and modern energy for all” as part of the United Nations Sustainable Development Goals by 2030.

Access to sustainable and modern energy is also directly linked to gender equality, poverty reduction and the improvements in health and climate change.

However, according to the Energy Access Outlook 2017, the number of people without access to electricity was still 1.1 billion in 2016.

In Sub Sahara Africa the electrification rate is still at a low 43 %. In this regard, South Africa is no exception.

Although the national electrification rate in South Africa increased from 66 % in 2000 to 86 % in 2016, a total number of 8 million people in South Africa are still without electricity and 135 million people in Southern Africa are without electricity. When access to clean cooking water is considered, 10 million people are still without access while five million people in South Africa still rely on biomass for cooking purposes.

Furthermore, the rate of urbanization will bring new challenges to energy policy makers. In this regard, the urban population increased from 19.15 million in 1990 to 30.86 million in 2010, and the United Nations predict that the urban population in South Africa will grow to 38.20 million in 2030, or 69.8 % of the population will be urbanized by 2030 in South Africa. This will pose new socio economic challenges towards providing affordable electricity to poor communities in urban areas.

Together with the rapid rate of urbanization the International Energy Agency in the Energy Access Outlook 2017 report indicate that the provision of electricity and clean cooking water for all would require an additional $ 786 billion in cumulative investment up to 2030. This is equal to $ 31 billion per year additional.

According to this report, Sub Sahara Africa will account for the largest share of additional investment.

In this context, South Africa will be no exception. South Africa desperately needs Economic Growth to redress past inequalities and the Energy Sector should play a cardinal role in this. Without a focus on the energy sector, South Africa will fall behind world trends in this regard.

The Energy Access Outlook 2017 projects that South Africa will be able to decrease the number of people without electricity from eight million to one million in 2030 with a “new policy scenario”. This in essence will need a new progressive approach towards energy in South Africa, with substantial investment in Energy Infrastructure.

Against the background of rapid urbanization and the ever increasing needs towards energy demand in the context of poverty alleviation, the affordability of electricity will be of utmost importance. In this regard, the Department of Energy indicated previously that “Energy is essential to most human activities and is critical to the social and economic development of an economy”.

Furthermore, the Department of Energy states that “the key objectives is to ensure energy security, which in essence is about ensuring availability of energy resources and access to energy services, in an affordable and sustainable manner while minimizing the associated negative impacts of its use”.

However, the potential threats to energy security including scarce and depleting energy resources, geopolitical instability, inadequate energy infrastructure, and more recently natural disasters may impact on the initiatives to decrease the number of people without electricity to one million by 2030 as predicted in the Energy Access Outlook 2017 Report.

The implication of this is that to ensure continued security of energy supply, it is essential that a coordinated and integrated approach to energy planning is prioritized. The focus of energy policy in South Africa, therefore, should focus on affordability from a socio economic perspective as well as an Economic Growth perspective.

In this regard, socio economic targets should be prioritized. However, to do this substantial investment in Energy in South Africa will be necessary.

This should be balanced against fiscal consolidation without compromising Socio-economic targets. In this context, the National Integrated Energy Plan (IEP) as envisaged in the White Paper on Energy Policy of 1998 should focus on Socio Economic Targets as well as Energy Security. This will need a balancing act with fiscal constraints in mind to develop a sustainable balanced energy landscape with socio economic targets in mind.

Electrification is one of the biggest success of the ANC government since 1994. In 1990 only 35% of South African citizen had access to electricity. The majority of those without access to electricity before 1994 were black people due to Apartheid policies with regard to service delivery. As of March 2017, the access to electricity has been improved to 87% due to the success of the Integrated National Electrification Programme (INEP) led by the Department of Energy (DOE).

Whilst the national focus has been the build programme for power generation like Medupi and Kusile Power Stations, access to basic services to previously unserved communities is one of the constitutional obligations of the democratic government. To these communities, who are majority black and poor, the meaning of democracy and freedom is defined by access to basic services.

The provision of electricity to communities has a multiplier effect to access of basic services like education, health and employment. It is with this in mind that the National Development Plan (NDP) is targeting universal access to electricity by 2025. Universal access has been defined as the connection of 97% households in South Africa.

Despite the impressive progress towards universal access, challenges remain in eradicating energy poverty in South Africa.

Many communities in rural areas and informal settlements remain without access to electricity or cannot afford the cost of energy. The eradication of energy poverty to these vulnerable communities is now the critical focus of this Government.

The eradication of energy poverty in South Africa will require a multi-pronged strategy by Government and all relevant stakeholders in mobilizing various technologies and funding options. The electrification of about 90% of households through grid connection and the rest with high-quality non-grid solar home systems or other possible technologies based on cost effective options will be required in order to address current and future backlogs.

The Department of Energy will be spending R20 billion towards universal access and the eradication of energy poverty in South Africa. These funds will be allocated to Eskom and municipalities as the key implementing agents of the Integrated National Electrification Programme.

David Mahlobo is the Minister of Energy

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