Renewable energy in South Africa: Potentials, barriers and options for support

The challenge of transforming entire economies is enormous; even more so if a country is as fossil fuel based and emission intensive as South Africa. However, in an increasingly carbon constrained world and already now facing climate change impacts South Africa has to reduce greenhouse gas emissions intensity soon and decidedly. The South African electricity sector is a vital part of the economy and at the same time contributes most to the emissions problem. First steps have been taken by the South African government to enhance energy efficiency and promote renewable energy, however, they fail to show large-scale effects. This paper seeks to identify the relevant barriers to renewable energy investments and, based on experience from other countries, provide policy recommendations.The major barrier identified in the paper is based on the economics of renewable energy technologies, i.e. their cost and risk structures, two main factors in investment planning. As a solution, the South African government introduced several renewable energy support measures, such as a feed-in tariff. The paper discusses the potential and possible shortcomings of this and other existing support schemes and identifies complementing measures on a national scale.