The latest South African National Energy Association (SANEA) Risk Report showed pressing challenges within South Africa's energy sector, stressing the need for immediate and strategic responses.
The sixth iteration of the report provided a comprehensive analysis, offering decision-makers crucial insights to navigate the increasingly complex energy landscape.
The Risk Report aims to anticipate emerging risks and develop strategies to either mitigate them or leverage arising opportunities. The 2024 edition, building upon insights from the 2023 report, reflects significant shifts and ongoing uncertainties in the sector. Key points from the report include:
Policy Uncertainty
While the revised Integrated Resource Plan (IRP) offers some clarity for the electricity sector, the final version must be released promptly to support strategic planning. Potential political changes could further influence the energy policy landscape.
Localisation and Industrialisation
The lack of incentives and planning for localisation and industrialisation is adversely affecting national competitiveness and socio economic growth.
Siloed Efforts
The fragmented approach to policy development and skills provisioning results in a sub-optimal energy ecosystem, undermining national resilience and competitiveness. Accelerating integration efforts is crucial.
Implementation Capability
The slow progress in strengthening the transmission grid, rolling out the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), and enhancing infrastructure highlights significant implementation challenges. Corruption and parochial decision-making exacerbate these issues.
Leadership and Collaboration
The energy sector suffers from inconsistent leadership and duplicated efforts. Radical collaboration and less parochial decision-making are necessary to harness collective efforts for national benefit.
Energy Governance
Existing governance frameworks are insufficient to support the sector's rapid evolution, necessitating urgent reforms.
Development of Gas and Green Hydrogen
Decisions regarding the role of gas in South Africa's energy mix are urgently needed, as the window for its development is closing. Green hydrogen, although nascent, requires an integrated strategy to ensure future benefits for the country.
The SANEA Energy Experts group, responsible for the report, reviewed and adjusted key uncertainties from previous years and conducted a member survey to enrich their insights. They identified major shifts in the environmental context and confirmed the validity of the systems diagram and disruption constellations refreshed in the last report.
Chief among their conclusions is that policy uncertainty, implementation delays, and governance issues continue to hamper progress, negatively impacting the South African economy. The experts emphasised the need for quick action in areas such as skills development, grid enhancement to support renewables, integrated policy implementation, and political stability.
In her foreword, Mpho Mookapele, CEO of the Energy and Water SETA, said that “South Africa has a huge challenge ahead of us and with the many players in the space as well as the time-frames over which we need to manage this it will take a new type of mindset.”
“The mindset must be one of taking a holistic approach to make sure there are no unintended consequences together with innovation to find new ways to manage the uncertainty. We need to be proactive but also encourage radical collaboration as we cannot afford to not work together and to hear all voices,” Mookapele concluded.
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