BEYOND DEPENDENCY:

AN OPTIMAL POLICY FRAMEWORK FOR RENEWABLE AND NUCLEAR

ENERGY DEVELOPMENT IN SOUTH AFRICA.

A Thesis

Presented to

The Graduate School of Global Studies

Doshsisha University

In Partial Fulfillment

Of the requirement for the Degree

Master of Arts in

Global Society Studies.

By

Katleho Matsoso

(3I 15 0353)

July/2017

TABLE OF CONTENTS:

Abstract……………………………………………………………………………………i

List of Abbreviations……………………………………………………………….……..ii

List of Tables, Charts and Figures…………………………………………………..…….v

CHAPTER 1: INTRODUCTION

1.1 Background………….………………………………………………………………….1

1.2 Aims and Objectives.…………………………………………….......................………4

1.3 Methodology……….……………………………………..……………….……………5

1.4 Structural Outline….………………………………………………………..…………..6

1.5 Literature Review ………………………………………………………………………8

CHAPTER 2: SOUTH AFRICA’S ENERGY DILEMMA IN A NUTSHELL

2.1 Dependency on coal………………………………………………………..…………..13

2.2 Constitutional background……………….……………….……………………..……..18

2.3 Government strategies………………………………………………………………….20

2.4 Eskom’s electricity predicament …………………………………………….…….…..28

CHAPTER 3: COMPOSITION OF SOUTH AFRICA’S ENERGY MIX

3.1 Non-Renewable energy sources………………………………………...………...........31

3.2 Renewable energy sources……………………………………………………………..37

CHAPTER 4: A TALE OF TWO NATIONS

4.1 Pioneers of innovative energy sustainability…………………..………….….….…......41

4.2 Case study: Netherlands ……………………………………………………….………42

4.3 Case study: Japan…...………………………………………………….…….…..…….46

CHAPTER 5: CONCLUSION: THE WAY FORWARD

5.1 Lessons learned………………………………………………………………………...48

5.2 Energy policy recommendations……………………………………………….........…49

BIBLIOGRAPHY……………………………………………………...…………...…...…50

Abstract

The objective of this thesis is to explain the cause of the recurrent power failures in South

Africa, as well as its effect on the country from an economic, social and environmental

perspective. By doing so, the various forms of South Africa’s current energy mix can be

defined, analyzed and can then be determined as to which energy source/s require attention.

Empirical research will be conducted on the Netherlands and Japan in order to determine the

course of action they pursued in order to attain reliable energy development, reduce their

carbon emissions, but more so taking into account the other underlying factors such as cost,

time, energy security, institutions and climate change. Thus, primary and secondary sources

will be used to present the problem, possible solutions/s and together with white policy papers

to draft a proposal for renewable and/ or nuclear energy development as a long-term

resolution toward an optimal energy mix through a recommendation for a policy framework.

Keywords: South Africa, development, energy, coal

LIST OF ABBREVIATIONS

AfDB African Development Bank

ANC African National Congress

ACM Authority for Consumers and Markets

CHS Commission for Human Security

CSP concentrated solar power

DEA Department of Environmental Affairs

DME Department of Minerals and Energy

DoE Department of Energy

DPE Department of Public Enterprises

Dept. Department

DSM Demand Side Management

est. estimate

GEAR Growth, Employment and Redistribution Strategy

GDP Gross Domestic Product

GHG Greenhouse gas

GW gigawatt

IDM Integrated Demand Management

IEA International Energy Agency

IPCC Intergovernmental Panel on Climate Change

IPP Independent Power Producer

IRP Integrated Resource Plan

LNG liquified natural gas

MEC Minerals-Energy Complex

Mt Megatonne

MW megawatt

MDGs Millennium Development Goals

Mtoe Million tonnes of oil equivalent

NECSA South African Nuclear Energy Corporation

NERSA National Energy Regulator of South Africa

NNR National Nuclear Regulator

OCGT Open Cycle Gas Turbine

R Rands

REIPPPP Renewable Energy Independent Power Producer Procurement

Programme

RDP Reconstruction and Development Programme

R&D Research and Development

SADC Southern African Development Community

SDGs Sustainable Development Goals

SDM Supply Side Management

SOCs state owned companies

TPES total primary energy supply

TSO transmission system operator

WB World Bank

WRI World Resources Institute

WWF World Wind Fund for Nature

LIST OF TABLES, CHARTS AND FIGURES

List of Tables

Table 2.1: Sectoral Composition of the South African economy

Table 2.2: Major coal producers

Table 2.3: Major coal exporters

Table 2.4: The Regulatory bodies

Table 2.5: Advisory electricity power levels

Table 3.1: Functions of various power stations

Table 3.2: Eskom power station mix

Table 3.3: Properties of different types of conventional power stations

Table 4.1: Factors behind green electricity market success

List of Charts

Chart 3.1: South Africa’s total primary energy consumption, 2015

Chart 3.2: Planned new renewable generation mix 2030

Chart 4.1: Netherlands total primary energy consumption, 2014

Chart 4.2: Japans total primary energy consumption, 2015

List of Figures

Figure 3.1: World map of water stress by countries

Figure 4.1: Map of the Netherlands specifying location

Figure 4.2: Wind turbines

Figure 4.3: Wind turbine

Figure 4.4: Map of Japan specifying location

Beyond Dependency: An Optimal Policy Framework for Renewable and

Nuclear Energy Development in South Africa.

Katleho Matsoso

CHAPTER 1

INTRODUCTION

1.1 Background

From September 6th to 8th of 2000, the United Nations General Assembly adopted a

resolution titled, “United Nations Millennium Declaration” (General Assembly resolution

55/2, 2000). The prime objective of this binding document was to eradicate various problems

affecting developed, but more importantly developing countries. The framework was

structured into eight Millennium Development Goal’s (MDGs), namely: poverty, education,

gender equality, child mortality, maternal health, diseases, the environment and global

partnership, with each having a specific target/s and the intention to drastically reduce or

completely eradicate them during a 15-year (2000 - 2015) period (Galatsidas & Sheehy,

2015). Despite varying results in regard to each Goal that was set, there were a few which

were achieved and although the rest reached as far as half, they still fell short of the two thirds

target previously set.

As of September 25, 2015, the Sustainable Development Goals (SDGs) were adopted

and only came into effect from January 1, 2016 with functions more elaborate to that of the

MDGs and spanning a 15-year (2016-2030) period (un.org). However, although it is not

binding, the agenda for this particular framework was designed to expand from the previous

goals which were too narrow and thus increasing them to 17 Goals with a vast array of targets

that would make them as inclusive and as universal as possible (Thomson, 2016).

Considering that governments, private sector and civil society are responsible for the

progression of the 17 Goals, there are two in particular which are very much interconnected

and a topic of discussion on various platforms, which are; Goals 7) affordable and clean

energy, as well as 13) climate action. These goals have been envisaged as;

“ ...to promote broader energy access and increased use of renewable

energy, including through enhanced international cooperation and

expanded infrastructure and technology for clean energy.”

“…presents the single biggest threat to development, and its widespread,

unprecedented effects disproportionately burden the poorest and the most

vulnerable. Urgent action is needed not only to combat climate change and

its impacts, but also to build resilience in responding to climate-related

hazards and natural disasters” (un.org).

Energy generation and climate change have gradually come to be considered as two

themes which, for a while now, have been taken for granted. As a result of their

interconnectedness and arguments raised by skeptics on the aforementioned issues, they have

since gained recognition to become the most prevalent topics environmentally, politically,

economically, as well as academically. Articles, journals and even books pertaining to this

particular subject have been written by scholars of various backgrounds in order to identify

barriers, to also raise awareness and provide statistical, empirical and theoretical solutions.

South Africa on the other hand, considering its historical background in addition to

its various social and political issues, is currently experiencing an energy crisis dating as far

back as mid-late 2007. The notion of “load shedding,” defined by Eskom, is the process

whereby the demand for electricity is monitored against the ability to meet supply; in the

event that the power system experiences constraints then the controlled power cuts are

initiated to prevent a complete blackout (eskom.co.za). As a result of this, what needs to be

taken into account is the fact that two basic human rights such as access to energy and a clean

environment are at risk of being undermined if the situation is not addressed. However, it

may seem as though 2007 was not the initial year the problem surfaced, but rather a gradual

circumstance of government’s efforts to suspend an issue that was not regarded as an

immediate problem then. The adoption of the White Paper on Energy Policy (DME, 1998)

was intended to lay a foundation for future energy development in order to address the issue

of accessibility to electricity, future challenges, in addition to continually innovating means

to produce clean, as well as affordable energy. Thus, other documents such as the Integrated

Energy Plan 2003 and the DME Energy Efficiency Strategy 2005 are a few of many strategies

which get their mandate from the White Paper on Energy Policy 1998 in order to provide a

plan of action to establish affordable energy for all through the diversification of energy

sources, drafting and implementation of acts and legislations, as well as the introduction of

programmes and projects (DME, 2003 & 2005).

1.2 Aims and Objectives

This particular study’s objective is to analyze in detail the gravity of the situation in South

Africa, considering the backlash that government, particularly Eskom, has been receiving in

regard to the indefinite electricity crisis. Taking into consideration its historical past and

contextualizing its development in energy generation from then until now, will determine its

impact economically, socially and environmentally. Moreover, it is imperative to carefully

scrutinize the energy parastatal, as well as the various energy sources by examining the

underlying factors such as cost, time, institutions and energy security to name a few. In doing

so, it can then be determined which areas, particularly relating to renewable and nuclear

energy, require attention and investment. In addition to that, the comparison of the different

energy mixes, including a case study of two developed countries, namely the Netherlands

and Japan is intended to compare and contrast their past, present, as well as future prospects

and to finally recommend an optimal energy policy for implementation.

This also raises the questions as to:

1. How can South Africa, in collaboration with the new Sustainable Development Goals

(SDGs), attain sustainable energy development while reducing its reliance on coal by

2030?

2. Furthermore, what measures should South Africa pursue from the lessons learned

from the Netherlands and Japan, regarding their energy security policies; in order to

adopt and implement sound policies?

1.3 Methodology

For this study, quantitative and particularly qualitative methods were used to conduct the

research. The collection and the critical analysis of existing research can be categorized as

being primary and secondary data sources. The use of these two sources consisted of

newspaper articles, press releases, government documents (policies, reports...) and academic

journals which were used to define South Africa’s historical background on energy, in

addition to its recurrent electricity crisis. Moreover, academic journals and books pertaining

to Energy Resources and their Systems were also used to determine the various energy

sources that make up South Africa’s current energy mix, elaborate on where the problems lie

by structurally taking into account variables such as cost, time, institutions and energy

security will be retrieved from Eskom and various regulatory bodies. Furthermore, analysis

of newspaper articles, together with scholarly journals, would provide insight on each

countries background in relation to energy; while the critical analysis and comparison of

governmental policies would present a detailed outlook. Thus, the aforementioned, together

with a combination of other proposals would be used to answer the identified questions as to

which path to optimal energy sustainability South Africa should follow.

1.4 Structural Outline

In order to answer the aforementioned questions, the study has been chronologically

organized into five chapters, namely;

Chapter 1 provides a brief description of the energy crisis that has been affecting the country

for almost a decade now. In addition to that, it provides the aims and objectives which attempt

to address the significance of the study and highlights questions that it intends to answer. The

methodology will determine the approach in which the research was conducted and how it

will be utilized toward underlining the problem, presenting possible solutions and then

determining the best recourse for long-term energy sustainability. The outline provides brief

summaries on what is entailed in each of the chapters, as well as the conclusion.

Chapter 2 briefly gives a background of South Africa, particularly in regard to its geographic,

historical and past on energy generation from 1994 in order to determine the origins of the

cause/s to the energy shortage affecting the country. The legislative frameworks set in place,

together with the institutions that are responsible for their implementation, will be analyzed

for their role in conjunction with the energy crisis.

Chapter 3 is structured into three sections, namely; Non-Renewable energy sources,

Renewable energy sources and a comparison analysis of both. Each of the first two sections

is structured to give the reader a detailed description of South Africa’s current energy mix.

The final section will attempt to focus attention on how each contributes or deduces towards

greenhouse gases, as well as compare and contrast underlying factors such as cost, time

(longevity) and energy security.

Chapter 4 is intended as a base for comparison between two developed countries in regard to

their Non-Renewable and Renewable energy policies considering that they are pioneers in

sustainable energy development. Both the Netherlands and Japan will be used as case studies

due to the aforementioned criteria, in addition to other factors such as their geography,

economies and other demographics. This can be used as a foundation for South Africa to

more or less learn from and adopt certain ideas or policies on market liberalization,

particularly in the energy sector.

Chapter 5 is structured into two sections, namely; Lessons learned and Energy policy

recommendations’. The first section will reflect on the successes or failures by the

Netherlands and Japan as possible short or long-term solutions. Moreover, the second section

will determine the direction in which the South African government, particularly the

Department of Energy and Eskom, should consider on past successes and failures of the

aforementioned countries, thus determining which policy recommendation is feasible. In

conclusion, everything documented will be summarized in order to determine the direction

South Africa must advance in, in order to produce more reliable and sustainable energy

development while drastically diminishing its dependence on coal, as well as reducing its

carbon emissions.

1.5 Literature Review

This paper will demonstrate how energy plays a vital role toward the economy, particularly

in regard to economic growth and development. South Africa is a country that has an

abundance of fossil fuels such as coal and uranium which it benefits not only as commodities

for exports, but more importantly for primary energy generation. In addition to that, its

strategic location also gives it an added advantage in regard to other untapped energy sources.

With Ghosh and Prelas (2009) asserting that energy is the driving force behind most

economies, in South Africa’s case, 95% of energy (electricity) generated nationally comes

from coal. However, as a result of there being a shortage in energy supply to meet demand,

a stagnant economy and the need for more sustainable energy development, South Africa

faces a long-term energy crisis unless alternative sustainable options are invested in soon.

The scope of the review will be limited to published works particularly on energy, energy

sustainability and energy development in South Africa and around the world.

Komor (2004), takes a more pragmatic approach by pointing out that renewable

energy plays an important role in the future of our planet. Apart from providing a detailed

introduction on the problems associated with renewables, the author examines how policies

for renewable energy can be implemented for large scale electricity production. Furthermore,

the author provides how various government efforts have either succeeded or failed and as a

result what measures were taken into account to either improve on or learn from. The author

does so by carefully using jargon free language, as well as technologic, economic and

political terminology on renewable energy cost and performance through various case studies.

Ghosh and Prelas (2009) offer a more comprehensive theoretical approach which

simply defines energy resources and their systems. The authors define and then compare the

difference between Renewables and Non-Renewable sources, thus further applying technical

explanations from scientific and economic stand points. The authors discuss in great detail

the including the type of energy, methods of converting energy, pointing out various

engineering design issues associated with the energy converting system, the efficiency of the

conversion process, the economics, risks and the environmental impact globally.

Diesendorf (2010) argues that although global warming poses a worldwide ecological

threat, the advances in sustainable energy technologies, particularly renewable energies, are

seen as long-term solutions to reductions in non-renewable energy reliance and reductions in

greenhouse gases. The author uses Australia as a case study by using a theoretical approach

to define the problem, covers various sustainable technologies, presenting policies and

strategies on the plan of action. By using Australia as a case study, he reiterates that it is one

of the largest exporters of coal and emitters of greenhouse gases in the world. He argues that

despite being a coal and oil dependent country, Australia could achieve an ecologically

sustainable energy system.

Todaro and Smith (2011) assert that without energy there cannot be any development;

and without development there can be no energy. The authors approach confronts the

problems and challenges of the developing world such as population growth, poverty, as well

as environment and development. They adopt a problem – and policy oriented approach by

considering macro and international topics by addressing them through theoretical and

empirical analysis of data (new measures and statistics), case studies by country and relevant

policies.

Sebitosi and Pillay (2008) assert that “different countries and societies depending on

the prevailing socio-economic environment draft and apply their policy frameworks

differently.” This can either be facilitated through investment cost reduction, public

investment or market facilitation. Prior to 1994, South Africa was internationally isolated

which prompted the government to be self-sufficient in energy generation and thus this

resulted in there being inadequate information (data), lack of human development and slow

development. Even though South Africa had an abundance of sunshine and wind, the

electricity shortfall of 2008 prompted the expansion of coal generating capacity, with the

need for an increase in renewable energy to the energy mix. Problems associated include

political pressure/ interference, no particular guiding framework, outdated legislation, lack

of education on topic/theme and calls for privatization (mixed public/private business model).

Sebitosi (2008) points out that “energy efficiency has become recognized as one of

the most cost-effective ways of meeting the demands of sustainable development.” In order

to do so the Department of Minerals and Energy would have to more or less improve off of

the 1998 Paper on how to improve its energy efficiency by 2015, with the baseline year

beginning from the year 2000. Due to the country being one of the biggest emitters of

greenhouse gases per capita, this posed serious environmental issues, in addition to the need

for further investment in new generating power capacity by 2007 using the business as usual

model. By reviewing the energy policies of Japan (2006) and the United States (2007), South

Africa would have to draft a well-executed policy strategy, together with a rigorous plan of

action which is key to achieving efficient energy gains. Problems associated include; failure

of government and Eskom (public sensitization and information model), Eskom’s

administration, energy generation, as well as their transmission infrastructure. Proposed

solutions include; future decentralization, adoption of low carbon technologies, government

action to energy possibilities, legal instruments alone inadequate, lack in human capacity

(technical skills) and transparency (disclosure of decisions, rates...etc.).

Winkler and Marquand (2009) assert that “climate change mitigation poses

significant challenges for South Africa and its energy development.” Although South Africa

is a middle-income developing country, there are various developmental challenges such as

high levels of inequality and unemployment, together with an energy intensive economy

which in turn contributes towards increased carbon emissions. The authors present the case

for South Africa in an overview of the developmental challenges as a result of post 1994. By

elaborating on the past policy frameworks, the authors make a key finding on the GHG gas

emissions between 1990 and 1994, which can be directly attributed to South Africa’s primary

energy consumption of coal. The authors further states that it is imperative for the South

African government and other key stakeholders to integrate climate change into other policy

domains, develop international and national climate policy and determining energy policies

and their implication for mitigating climate change. And finally, the author emphasizes that

the three key areas include: 1 - energy efficiency (reduce demand or use it more efficiently),

2 - changing the fuel mix (converting to lower- or non-carbon-emitting energy sources) and

3 - structural changes to the economy (lower the energy intensity of the whole economy and

investment to less energy-intensive sectors) as long-term solutions.

Pegels (2010) states that “the challenge of transforming entire economies is

enormous; even more so if a country is a fossil fuel based and emission intensive as South

Africa.” The author acknowledges that according to various reports by the Intergovernmental

Panel on Climate Change (IPCC), World Bank (WB) and World Resources Institute (WRI),

climate change is most likely going to impact the African continent in numerous ways,

particularly water availability. South Africa on the other hand, although a contributor, will

likely experience a deterioration water supply and quality, desertification, decline in

biodiversity, health issues and a decline in agricultural output. The author then goes on to

give a detailed breakdown of the country’s energy mix and that as a result of the power

shortages in 2008, these resulted in detrimental economic impact of roughly USD 253 and

282 million. Furthermore, by defining the electricity problem and a plan of action by the

DME from a demand side management/ supply side management (DSM/SSM) point of view

in the short and long-term, the problems the country may encounter include; electricity

undersupply, financial investment and environmental damage. The author also noted that

there are three barriers in regard to the state of renewable energy in South Africa, namely;

market for RE relatively young, legislation hurdles and unfair competition particularly for

the Independent Power Producers (IPPs). Seeing as there is a huge gap between RE and actual

policy implementation, the author makes 6 detailed bullet points in the form of

recommendations with various approaches from the government, Eskom and inclusivity with

the South African public on crucial decisions.

Baker (2016), points out that in order to understand South Africa’s background in the

energy sphere; one would have to look at the country’s historically unique, yet complex

political economy particularly its electricity policy considering that it involves various

players (sectors) and more importantly the concept of the “minerals-energy complex (MEC)”

(Fine and Rustomjee, 1996). Briefly summed, “it is a highly electricity and carbon-intensive

economy based on the country’s abundant and historically cheap sources of coal.” The author

emphasizes that as a vertically integrated monopoly, Eskom benefiting from the from this

uneven distribution which also contributed towards the lack of electricity for the majority of

South Africa. Moreover, five of the biggest mining companies, namely: Glencore, Anglo-

American, South 32 (demerged from BHP Billiton in 2015), Exxaro and Sasol all benefitted

from deals made with Eskom (Eberhard, 2011). This points out that, apart from South Africa

accounting for a significant share of the world’s mining industry, in 2008 Eskom encountered

an electricity crisis, together with issues such as mismanagement and disorganization of the

utility, inadequate maintenance of the utility’s older power stations and funding issues for

infrastructure. As a result, they have far exceeded their allocated expenditure in addition to

the loans they received from the African Development Bank (AfDB) in 2009 and the World

Bank in 2010, respectively. Furthermore, as a quick fix solution to recoup the millions spent,

Eskom requested an increase in electricity tariffs from NERSA.

The reduction in greenhouse gas emissions through an optimal mix has not only been

addressed on a national scale, but more aggressively on an international level. The Africa

Progress Report 2015 emphasizes that both global poverty and climate change have a

common link, which is energy. Moreover, the report also points out that although “sub-

Saharan Africa is desperately short of electricity, the region’s grid has a power generation

capacity of just 90 gigawatts and half of it is located in one country, South Africa.”

South Africa in this context, finds itself in quite a predicament as energy consumption goes

hand in hand with greenhouse gas emissions and global climate change. While energy

security is the governments top priority, there is also a need to highlight that alternative

energy sources are key not only to a sustainable optimal mix, but beneficial towards

environmental security. This study would attempt to ultimately develop an optimal policy

framework to determine how the inclusion of renewable and nuclear energy on a

decentralized level would assist South Africa in reducing its greenhouse gas emissions, while

achieving sustainable energy security.

CHAPTER 2

SOUTH AFRICA’S ENERGY DILEMMA IN A NUTSHELL

2.1 Dependency on coal

“Energy is the lifeline of the economy for any country” (Ghosh & Prelas, 2009:1). It has a

very comprehensive and important role to play particularly when you consider the economy

(locally and globally), population growth, environmental implications and the depletion of

the energy resources in the process. Energy generation in South Africa, like in many

developing and emerging markets, proves to be a stumbling block as development cannot

advance without sustainable and affordable energy. The lacklustre implementation of and

sluggish infrastructural development of alternative energy generation sources resulted in

periodic rolling blackouts, which have consequentially affected the already stagnant

economy economically, socially and more importantly environmentally.

South Africa is located at the southern tip of the African continent and shares its

borders with six countries; Namibia, Botswana, Zimbabwe, Mozambique, Swaziland and

Lesotho. The country has a population made up of 54, 300, 704 million people (2016 est.),

has a total area that covers up to 1, 219, 090 square kilometers, is strategically subdivided

into 9 provinces with those located inland/in the interior mostly semiarid and those along the

coast having a subtropical climate (cia.gov). As a result of its strategic geographic location,

South Africa has an abundance of arable land and more importantly is well endowed with a

wide range of mineral reserves that include ferrous minerals, non-ferrous minerals and metals,

precious metals and minerals, energy and industrial minerals (cia.gov; dmr.gov). Given its

illustrious history in mining, South Africa’s economy is built on the extractive minerals of

gold, diamonds and coal which contribute in part to a large share of exports with key trading

partners. In addition to mining, other key sectors that contribute towards the Gross Domestic

Product (GDP) include, agriculture, manufacturing, wholesale and retail trade,

communications, transport, electricity, construction, financial services, government services

and other services which complete the composition of the economy (IDC, 2015;5).

Table 2.1: Sectoral composition of the South African economy

Source: Swiss Programme for Research on Global Issues for Development, compiled from SARB data; IDC, compiled from Stats SA data.

With South Africa ranked as one of the world’s 12 highest carbon dioxide emitters,

it also makes it the highest contributor to greenhouse gases (GHG) in Africa with emissions

reaching a total of 579 million tonnes of carbon dioxide emitted in 2010 (Wolpe & Reddy,

2015: 6; DEA, 2013). Due to South Africa having an abundance of together with access to

cheap coal (by international standards), the extremely energy intensive economy relies on

Sector: 1995 2005 2015

Agriculture, forestry & fishing 2,6% 2,7% 2,3%

Mining & quarrying 10,1% 7,6% 8,0%

Manufacturing 19,6% 18,5% 13,0%

Electricity, gas & water 2,6% 2,4% 3,6%

Construction 2,5% 2,8% 4,0%

Wholesale & retail trade, catering & accommodation 13,1% 13,9% 15,0%

Transport, storage and communication 7,5% 10,0% 10,0%

Finance, insurance, real estate & business services 17,4% 21,1% 20,9%

Community, social & personal services 6,4% 6,3% 5,7%

General government 19,1% 14,9% 17,4%

Total 100% 100% 100%

fossil fuels as a primary energy source in order to increase economic, as well as human

development (Wolpe & Reddy, 2015: 6; DEA, 2013). In addition to that, the Department of

Energy (DoE) states that 77% of primary energy comes from coal which is obtained by large,

as well as small-scale producers at 51% (underground method) and 49% (open-cast method)

respectively, with 28% of South Africa’s coal production playing a fundamentally key role

as a crucial export and a major problem altogether.

The International Energy Agency (IEA) and the US Energy Information

Administration (EIA) both published an excerpt, as well as a document titled, “Coal

Information: Key coal trends 2016” and “International Energy Outlook 2016” respectively.

The former goes into detail about coal from a global to a regional (OECD and non-OECD

members) point of view discussing the production, trading and consumption patterns; with

the latter providing a comprehensive overview on Petroleum and other liquid fuels, natural

gas, electricity, as well as building, industrial and the transport sectors energy consumption

through past, current and future projections using policies as indicators. These documents

also present valuable information on the major coal producers and exporters which will be

summarized in the following two tables in order to provide an outlook on where South Africa

ranks in the world.

Table 2.2: Major coal producers (Mt)

2005 2015

PR of China 1 174,8 3 527,2

United States 580,2 812,8

India 162,1 691,3

Australia 206,0 508,7

Indonesia 94,0 469,3

Russian Federation 139,2 349,3

South Africa 137,7 252,1

Germany 53,2 184,7

Poland 69,0 135,8

Kazakhstan 44,2 107,2

Other 282,5 670,5

World 2 942,9 7708,7 Source: BP Statistical Review of World Energy; IEA; *Production includes recovered slurries and production from other sources. (Data for Australia and India are provided on a fiscal basis.)

In Table 2.2, the IEA listed 10 countries that make up the world’s top 10 coal

producers in Megatonnes from 2013 to 2015. With China accounting for roughly about half

of the world’s production, South Africa ranks 7th with a total of 252,2Mt, just behind the

Russian Federation which ranked 6th with a total of 349,3 Mt for the year of 2015. Moreover,

a majority of the producers (except India, Australia and Russia) all saw their production

dropping between 2014 and 2015.

Table 2.3: Major coal exporters (Mt)

2005 2015

Australia 231,3 392,3

Indonesia 108,0 368,4

Russian Federation 75,7 155,1

Colombia 55,8 82,0

South Africa 73,0 77,3

United States 45,1 67,1

PR of China 71,8 36,2

Canada 27,7 30,5

Kazakhstan 16,9 27,4

Poland 20,8 19,9

Other 45,3 55,0

World 749,0 1 311,1 Source: IEA statistics 2006, IEA (Data for Australia are provided on a fiscal basis.)

In Table 2.3, South Africa is regarded as one of the highest coal exporters in the world,

ranking 5th, and accounting for 6% of global exports. In addition to that, in 2014, 69Mt of

coal worth R46,7 billion were exported (chamberofmines.org.za).

South Africa’s path to development has progressively adopted a capital and energy-intensive

approach, driven by resource extraction which is closely linked with other economic

activities and defined by Fine and Rustomjee (1996) as the “Mineral-Energy Complex”

(Winkler & Marquand, 2009: 48). This particular concept is touched on in the Greenpeace

Report of 2012 titled, “The Eskom factor: Power politics and the electricity sector in South

Africa,” as it emphasises that the socio-economic challenges such as inequality,

unemployment and more importantly the lack of access to electricity are in actual fact a by-

product of the MEC during and post-apartheid era (Steele et al, 2012: 5; Baker, 2016: 4).

However, in order to fully understand the gravity of the aforementioned and how they affect

South Africa from an economic, social and environmental view, it is imperative to observe

its energy policy/s and institutions from a historical viewpoint in order to determine the build

up to its current situation which will be discussed in the following section.

2.2 Constitutional background

When considering South Africa’s historical together with its background on energy

policies, there are three different phases to take into account, namely; the first phase was

during the apartheid regime (1948 – 1994), the second phase was after the country’s first

democratic elections (1994 – 2000) and the third phase is from 2000 till this present day

(Winkler et al, 2006: 5). However, for research purposes, the time frame that will be covered

will be from 1994 in order to determine the measures the post-apartheid government took to

address the inequalities inherited, particularly energy generation from the previous

government.

In 1994, South Africa held its first ever non-racial general elections with the African

National Congress (ANC) at the forefront to not only winning the elections by popular vote,

but also bound to make history and become the nation’s first democratically elected

government. Much as this was a monumental achievement for the country, the new

government still had the daunting task of tending to underlying issues such as the lack to

housing, basic services which include water, sanitation and electricity, as well as restriction

to information on energy data which they all inherited from the previous government

(Winkler & Marquand, 2009: 48; Sebatosi & Pillay, 2008: 3313; Winkler et al, 2006: 5). The

governments priority at that point in time was to apply itself to the inequities of apartheid by

proposing a broad policy framework that was intended to address macroeconomic problems

and attempt to provide services and employment for the masses; hence the adoption of the

following programmes, namely: the 1994 Reconstruction and Development Plan (RDP), the

1996 Growth, Employment and Redistribution Strategy (GEAR), the 1994 – 99 National

Electrification Programme (Winkler & Marquand, 2009: 49; Wolpe & Reddy, 2015: 5-6;

ibid). The former was intended to provide housing in addition to providing basic services

such as water and electrification to empower the majority that marginalized during apartheid;

while the latter’s objective was to open the economy to investment and exports primarily for

economic growth and macroeconomic stability to address the creation of employment and

reallocation of resources through the budget (DMR, 1998: 7). However, in order for the

mentioned programmes, strategies or policies to be in effect and for the country to further

develop, the law had to be amended.

With the ratification of Act 108 of 1996, also known as the Constitution of the

Republic of South Africa as the supreme law, the three components consisting of the

Executive (Cabinet), Legislature (Parliament) and Judiciary (Courts) make up the South

African government and are responsible for the for the adoption and implementation of all

proclamations under the provisions of the Constitution. For instance, Winkler et al (2006)

emphasize that over time the key behind South Africa’s development on a social and

economic scale is due to energy production, in spite of the fact that the emissions from coal

combustion such as carbon, sulfur and nitrogen oxides are rather unfavorable toward the

environment. The paradox with this situation is that in order for South Africa to maintain its

hegemonic status in energy generation on the continent, it has to maintain and increase its

energy production to meet its demand; meaning increasing mining for coal extraction and

burning more coal at the expense of the environment. In the Constitution, Chapter 2: Bill of

Rights in section 24 on Environment states that;

“Everyone has the right –

(a) to an environment that is not harmful to their health or wellbeing; and

(b) to have the environment protected, for the benefit of present and future

generations, through reasonable legislative and other measures that –

(i) prevent pollution and ecological degradation;

(ii) promote conservation; and

(iii) secure ecologically sustainable development and use of natural resources

while promoting justifiable economic and social development.”

2.3 Government strategies

As a result of this, the Department of Minerals and Energy drafted a document titled

the “1998 White Paper on the Energy Policy of the Republic of South Africa”, which acquired

its mandate from the from the Constitution (DME, 1998; Sebitosi & Pillay, 2008: 3313;

Winkler et al, 2006: 8-9). The paper was structured in 5 sections, namely: 1) introduction,

2) context and priorities for energy policy, 3) demand sectors, 4) supply sectors and 5) cross

cutting issues. The introduction briefly talks of the necessary steps taken to drafting an

Energy Policy Discussion Document for thorough analysis of the problems and causes, as

well as comments on solutions prior to it its adoption in 1998. The five policy objectives are

entailed as:

1. “Increasing access to affordable energy services - disadvantaged households,

small businesses, small farms and community services.”

2. “Improving energy governance - determining specific roles and functions of

governmental institutions particularly in regard to accountability,

transparency and inclusivity through membership for blacks and women.”

3. “Stimulating economic development - encourage competition within energy

markets.”

4. “Managing energy-related environmental and health impacts – promotion of

access to basic energy services for poor households, in order to ameliorate

the negative health impacts arising from the use of certain fuels.”

5. “Securing supply through diversity – given increased opportunities for

energy trade, particularly within the Southern African region, government

will pursue energy security by encouraging a diversity of both supply sources

and primary energy carriers.” (DME, 1998: 8-9; ibid).

From the demand side, the paper addresses five sectors; households, industry,

commerce and mining, transport, as well as agriculture. Energy services by the previous

government proved to be inadequate for low income households, but from a modern

industrial urban societal view accommodated to the industrial sector and the privileged white

minority. Moreover, the use of fossil fuels such as fuelwood and coal by rural communities

has an environmental impact that contributes toward air pollution which has serious health

consequences. Although energy security may reduce poverty and improve living standards,

government intends initiate this through the appropriation of efficient appliances and fuels,

thermally efficient low-cost housing and energy savings. Little attention was paid toward

energy efficiency by the apartheid government, but the latter noted that greater efficiency

contributed towards financial and environmental benefits with an increase in competition

internationally. Thus, it was noted that greater energy efficiency could save between 10%

and 20% of current consumption. Even though the obstacles that were highlighted include:

inappropriate economic signals, lack of awareness, information and skills, lack of efficient

technologies, high economic return criteria and high capital costs; government is committed

to ensuring the application of greater energy efficiency through innovative technology,

accountable institutions and adequate legislation. Equitable access to affordable public

transport, together with fuel diversity needs to be increased in addition to addressing other

challenges. Other specific sectors such as small holder agriculture, rural schools, clinics,

roads and communication infrastructure require improved energy services and policies.

From the supply side, the paper elaborates on the seven energy sources; nuclear

energy, oil and gas: exploration and production, liquid fuels, gas, coal, renewable sources

and transitional fuels: Low-Smoke Fuels. In order to provide electricity that is low cost and

equitably priced, government will expect greater public participation in decisions on large

public-sector electricity investments, and will require evaluations using integrated resource

planning (IRP) methodologies. The notion of nuclear energy being a possible option in the

future depends on various alternative energy sources environmental and economic merits. In

regard to South Africa’s role on the exploration and production of oil and gas, the

government intends to utilize the principles of “use it and keep it” or “polluter pays.”

However, the paper also emphasizes that minimal intervention in connection with the liquid

fuels industry can: increase international competition and investment, issue adequate

environmental and safety standards, together with sustainable employment by taking into

account black interests. On the other hand, the development of natural gas and coal-bed

methane would require the legislation for the transmission of, storage, distribution and

trading of piped gas as they are attractive options. Although the coal industry would remain

unregulated and its performance monitored, it is still the major source of energy. In turn,

government intends to promote clean technologies and other alternatives primarily to reduce

its environmental impact. Furthermore, it perceives that renewables can provide low cost

energy service to remote areas and also has added benefits from a social and an

environmental point of view. The facilitation of sustainable production, management of solar

power and non-grid electrification systems would be devoted to rural communities. In

addition to that, government would also promote research into low-smoke fuels as an energy

source for rural households.

The cross cutting issues are structured to outline:

• “Integrated energy planning.”

• “Substantial statistics and information.”

• “Considerable energy efficiency promotion.

• “Equilibrium between environment, health and safety objectives.

• “Research and development to be carried out by energy suppliers and

private sector.” • “Human resource development.”

• “Capacity building, education and information dissemination.”

• “Establishment of international energy trade and cooperation.”

• “Aligning fiscal and energy policies through levies, tax differentials and

other options that involve sustainable energy, as well as efficiency.”

After the implementation of the 1998 Energy Paper which laid the foundation for

governments objectives in regard to energy, three papers pertaining to the legislation of and

future expectations of energy development in South Africa from 2003 involve;

DME Integrated Energy Plan 2003: this document was structured as a framework whereby

specific energy policy, development resolutions in addition to how energy supply trade-offs

can be determined according to a project-by-project basis. Moreover, it emphasizes on South

Africa’s reliance on coal as a primary source for energy and the need to diversify its energy

supply (DME, 2003a).

DME White Paper on Renewable Energy 2003: the basis for this document was intended for

the implementation of renewable energy. Furthermore, as a policy objective it intends to

reach a target of 10 000GWh from renewable energy contribution by 2013 (DME, 2003b).

DME Energy Efficiency Strategy 2005: this document was structured as a policy objective

through national targets to determine how South Africa can improve its efficiency on energy

of 12% by 2015 through the utilization of “implantation instruments” (DME, 2005).

Other papers that were published in correlation with the issue of energy in South Africa

include the Biofuels Industrial Strategy 2007, 2008 Energy Act, the Integrated Resource Plan

(IRP) for Electricity 2010 – 2030 and the National Development Plan (NDP) 2011 to name

a few.

However, in order to understand which governmental departments are responsible for

the implementation of a particular policy and the role regulatory bodies or parastatals play

will each be defined accordingly from a top down approach. From 1994 until 2009, the

Departments of Minerals and Energy, as well as the Department of Environmental Affairs

and Tourism were divided in order to have each having its own specialization. These were

then categorized as:

• Department of Minerals and Resources which aims “to promote and regulate the

minerals and mining for transformation, growth, development and ensure that all

South Africans derive sustainable benefit from the country’s mineral wealth,”

(dmr.gov.za)

• Department of Energy which aims to “formulate energy policies, regulatory

frameworks and legislation, and oversee their implementation to ensure energy

security, promotion of environmentally-friendly energy carriers and access to

affordable and reliable energy for all South Africans,” (energy.gov.za)

• Department of Environmental Affairs which aims to “provide leadership in

environmental management, utilisation, conservation and protection of ecological

infrastructure.” (environment.gov.za)

• Department of Tourism which aims to “create conditions for the sustainable growth

and development of tourism in South Africa” (tourism.gov.za).

In addition to the aforementioned departments, there is also the Department of Public

Enterprises (DPE) which “aims to drive investment, productivity and transformation in

the departments portfolio of state owned companies (SOCs), their customers and

suppliers so as to unlock growth, drive industrialization, create jobs and develop skills”

(dpe.gov.za). In Table 2.4 is a detailed list with state owned public companies and

regulatory authorities which in accordance with the Constitution and various mandates

work under or with the departments to ensure that objectives are met.

Table 2.4: The Regulatory bodies

Role players Objectives

National Energy Regulator of South Africa (NERSA)

Regulate the energy industry in accordance with government

laws and policies, standards and international best practices in

support of sustainable and orderly development.

South African Nuclear Energy Corporation (NECSA)

Undertake and promote research and development in the field

of nuclear energy and radiation sciences and technology, to

process source material, special nuclear material and

restricted material, to reprocess and enrich source material

and nuclear material, and to co-operate with any person or

institution in any maters falling within these functions. Necsa

also had to execute institutional responsibilities on behalf of

government, such as decommissioning and waste

management.

National Nuclear Regulator (NNR)

Monitor and enforce regulatory safety standards for the

achievement of safe operating conditions, prevention of

nuclear accidents or mitigation of nuclear accident

consequences, resulting in the protection of workers, public,

property and the environment against the potential harmful

effects of ionizing radiation and radioactive material.

CEF Group Focuses on oil, gas, coal and renewable and clean energy by

contributing to the national security of energy supply through

commercial operations and projects, as well as investing in

developmental projects, all while operating in a highly

competitive and capital-intensive environment with the need

to be a profitable entity through its subsidiaries and associates.

South African National Energy Development Institute (SANEDI)

Functions to direct, monitor and conduct applied energy

research and development, demonstration and deployment as

well to undertake specific measures to promote the uptake of

Green Energy and Energy Efficiency in South Africa.

PetroSA Deals with the exploration and production of oil and natural

gas; participation in, acquisition of, local as well as

international upstream petroleum ventures; production of

synthetic fuels from off shore gas at one of the world’s largest

Gas-to-Liquid (GTL) refineries in Mossel Bay, South Africa;

the development of domestic refining and liquid fuels

logistical infrastructure; the marketing and trading of oil and

petrochemicals.

ESKOM Aims to provide electricity in an efficient and sustainable

manner, including its generation, transmission, and

distribution and sales. Eskom is a critical and strategic

contributor to the South African governments goal of security

of electricity supply in the country as well as economic groth

and prosperity. Source: nersa.org.za, necsa.co.za, nnr.co.za, cefgroup.co.za, sanedi.org.za, petrosa.co.za, eskom.co.za

2.4 Eskom’s electricity predicament

In late 2007, South Africa started experiencing recurring bouts of power failures as a

result of the demand for electricity exceeding that which could only be supplied. According

to “Private Sector Investment in Infrastructure” by Jeffrey Delmon, load shedding is defined

as “... the offtake purchaser experiences an increase in demand so that even fast start

generation and frequency responsive generation cannot compensate, the offtake purchaser

may need to use demand shedding, or load shedding, by switching off demand centres or

decreasing provision as necessary to avoid the failure of other power plants. This would

require extremely rapid response by the project to offtake purchaser requirements and the

ability to modify output accordingly.” The world economic crisis of 2008 further

compounded the energy issue in South Africa with power cuts became more frequent and

with most lasting 2-3 hours/ times a day, which in turn affected the demand side sector,

particularly the mining industry (gold and platinum producers) and leading to sharp increases

in the price for precious metals (M&G, 2008; NY Times, 2008). Moreover, the primary issues

as to why there is load shedding can be attributed to there being a lack of capacity to generate

enough power and the inability to keep many of its plants working (ibid). Additional reasons

that contributed to the situation included poor management and the incompetence of Eskom’s

upper echelons to better handle the situation, although they still received their exorbitantly

high bonuses (Daily Maverick, 2012). Furthermore, other externalities that hindered

stabilizing the supply of electricity include over expenditure, delays to plants completion

such as Medupi and Kusile, as well the most recent pertaining to the 2014 collapse of the

Majuba silo which prohibited the delivery of coal to the plant (ibid). As a result of this,

mining and manufacturing are affected as they take time to restart operations, traffic is

congested, business as well as governmental institutions close and in turn this leads to a loss

in productivity, economic activity and international rating agencies downgrading the country

together with its SOE’s thus affecting the potential for future investment.

Eskom’s solution to curbing the problem at the time involved various supply side

mechanisms. For example, Hilary Joffe, the spokeswoman for Eskom at the time stated that,

“the power system is going to be tight for the next two years and the most effective way of

matching supply and demand is to reduce demand. (ibid)” In order to ease the situation,

Eskom monitors the demand and its ability to supply electricity to the public through the

PowerAlert system, which is a website that shows four different levels before load shedding

commences. These can be structured as;

Table 2.5: Advisory power levels

Green Grid power supply is stable. Efficient electricity use.

Green Grid power supply is limited. Switch off all unnecessary lights.

Yellow Grid power supply is strained. Switch off all unnecessary lights,

geyser and pool pump.

Red Grid power is severely under

pressure

Switch off all unnecessary lights,

geyser, pool pump and all other

appliances.

Black Grid requires power to be reduced, if not through energy saving load

shedding begins. Source: Eskom.co.za, poweralert.co.za

In conjunction with this initiative, Eskom also an Integrated Demand Management (IDM)

division. Their primary role was to ensure short-term security of electricity through multiple

programmes and initiatives with the objective of advising and replacing energy intensive

technologies, systems and processes with energy efficient solutions for business and

residential sectors (eskom.co.za).

However, load shedding continues to still be a hindrance which will continually

hurt the South African economy for the foreseeable future if management and technical

issues are not addressed, together with the long-term investment of other sources of energy.

The Economist published an article titled, “Unplugged – Rolling power cuts are fraying

tempers” which basically summed up that as long as the power cuts continue, the economy

will continually stay stagnant which in turn would be detrimental to both big industry and

small business for the foreseeable future. Moreover, President Jacob Zuma is noted as having

passed the blame of the country’s electricity situation on to apartheid seeing as energy

production was intended for the minority instead of the country as a whole (The Economist,

2015). He goes on to emphasize that since the ANC came to power significant progress has

been made in regard to providing electricity to at least 11 million homes since 1994, thus

highlighting the problem instead of providing viable solutions (ibid).

CHAPTER 3

THE COMPOSITION OF SOUTH AFRICA’S ENERGY MIX

“Sustainable development is a pattern of development that permits future generations to live

at least as well as the current generation, generally requiring at least a minimum

environmental protection” (Todaro & Smith, 2011). South Africa is a country that is well

endowed with multiple forms of energy generation, particularly with more emphasis based

on thermal energy to produce electricity from coal. These various energy sources, readily

available or remaining untapped, can be classified into two categories either as; Non-

Renewable and Renewable Energy Sources.

Non-renewable energy resources

In Energy Resources and Systems, by Ghosh and Prelas, Non-Renewable energy is

defined as, “a resource that is not replaced on a continuous basis or is replaced only very

slowly, but dependent completely on natural process.” These resources, better known as

fossil fuels consist of oil, coal, natural gas and uranium which is primarily used for nuclear

energy generation. All four sources play a major role in the composition of South Africa’s

total primary energy consumption. According to the Deloitte: Oil and gas taxation in South

Africa 2016 report, the country’s total primary energy generation capacity consisted of coal

(71%), oil (23%), natural gas (3%), nuclear (3%) and renewables (1%, primarily from

hydropower) (see Chart 3.1). As a vertically integrated SOE, Eskom deals with generation,

transmission and distribution of electricity to both South Africa and the Southern African

Development Community (SADC). In addition to producing approximately 95% of South

Africa’s electricity from a net max generating capacity of 41.9 GW through a transmission

and distribution network of 373 280 kilometers, Eskom also supplies electricity to industry,

mining, commercial, agricultural and residential customers (IEA, 2014; Matjila, 2014). Of

the 15 coal power stations mentioned, there are some which were recommissioned and

refurbished primarily with the objective of providing energy until Kusile and Medupi’s

construction is complete and ready to be to be connected to the grid and provide a combined

total of 9600 MW of installed capacity (eskom.co.za).

Chart 3.1: South Africa’s total primary energy consumption, 2015

Source: Deloitte: Oil and gas taxation in South Africa (2016)

Moreover, it is also important to take into account the variations of the demand for electricity

particularly during the summer (November to February) and winter (June to August) months

throughout South Africa (van Deventer, 2014: 88). Van Deventer also goes on to demonstrate

how the spikes in winter represent morning and evening times, and colder climates where

heating is in high demand. On the other hand, during summer demand grows gradually from

71%

23%

3% 3%1%

TOTAL PRIMARY ENERGY CONSUMPTION

Coal Oil Natural Gas Nuclear Renewables

the morning until it peaks in the afternoon, when appliances’ such as electric fans and air-

conditioning take precedence as cooling at that point in time is in high demand (ibid).

Diesendorf (2010) asserts that although it is very expensive to store large quantities

of electricity, power stations are required to match this demand as it varies throughout the

day. However, it also important to note that regardless of the design, no single type of power

station can solely supply enough electricity to match demand during the morning, afternoon

and the evening. Table 3.1 is meant to give a representation of what the demand for electricity

in a single day is like during the summer and winter months respectively, which vary on a

yearly basis and consist of various contributions particularly from base-, intermediate- and

peak-load power stations. In Greenhouse Solutions with Sustainable Energy by Mark

Diesendorf, various power stations can be categorized into three levels of output supply with

a brief definition of the properties of the aforementioned as;

Table 3.1: Functions of various power stations

1. “Base-load power stations are designed to run 24 hours a day, seven days per

week, at their rated power. They take all day to start up from cold and, in general,

their output cannot be ramped (changed up or down) quickly enough to handle

sharp peaks. Base-load power stations, especially coal fired, are cheap to operate,

but their capital costs are high.”

2. “Intermediate-load power stations fill the gap in supply between base- and peak-

load. They are more readily ramped than base-load, but less than peak-load. Their

operating costs lie between those of base- and peak-load. Sometimes,

intermediate-load is supplied by older, smaller coal fired stations and sometimes

by gas-fired stations.”

3. “Peak-load power stations are designed to be run for short periods of time each

day to supply the peaks in demand and to handle unpredictable fluctuations in

demand on time scales ranging from a few minutes to several tens of minutes. They

can be started rapidly from cold and their output can be ramped rapidly. Some

peak-load stations are gas turbines, similar to jumbo jet engines, fuelled by gas or

(rarely) by oil. They have high operating costs (mostly fuel), but low capital costs.

Hydro-electricity is also used to provide peak-load power. Because the amount of

water available is limited to that in the dam, the ‘fuel’ of a hydro power station

may also be considered to be expensive.” Source: Diesendorf, M. (2010). Greenhouse solutions with sustainable energy. Sydney NSW 2052: University of New South Wales Press Ltd.

Having briefly summed up the three levels of output supply, Table 3.1 is structured to give a

better understanding of the various power stations which provide South Africa with

electricity not only from coal, but also open cycle gas turbine and nuclear energy. As noted,

the installed capacity for Medupi and Kusile are new build stations which are not fully

functional as yet. However, the first unit (800MW) of Medupi was synchronized in March

2015 (Eskom.co.za).

Table 3.2: Eskom power station mix

Type Name Year (Age*) Installed Capacity

1.

Komati 1961-66 (mothballed 1987; recommissioned 2012)

1000MW

2. Camden 1967 (mothballed 1990; recommissioned between 2005 and 2008)

1600MW

3. Grootvlei 1969 (mothballed 1989/90; recommissioned 2008)

1200MW

4. Hendrina 1970-76 (refurbished between 1995 and 2003)

2000MW

5.

COAL Arnot 1975 (3 units mothballed

1992; recommissioned 1997 and 1998)

2100MW

6. Duvha 1975 3600MW

7. Kriel 1979 3000MW

8. Lethabo 1985 3708MW

9. Matla 1983 3600MW

10. Tutuka 1985 3654MW

11. Kendal 1993 4116MW

12. Majuba 1996 4107MW

13. Matimba 1998 3990MW

14. Kusile Under construction (first unit 2017)

(4800MW) (est.)

15. Medupi Under construction (first unit synchronized March 2015)

800MW (4800MW) (est.)

16. Open Cycle Gas

Turbine (OCGT)

Acacia 1976 171MW

17. Port Rex 171MW

18. Ankerlig 2007-2009 1327MW

19. Gourikwa 2007-2008 740MW

25. Nuclear Koeberg 1984 1800MW

TOTAL (excl. Kusile and Medupi) 42 684MW

Source: Eskom.co.za

Coal-fired base-load power stations, are intended to run continuously at its rated

power although this is not always the case. There have been instances on multiple occasions

according to Eskom whereby a station either unexpectedly breaks down or is deliberately

shutdown for planned maintenance. On the other hand, when demand for electricity on the

grid is very low, a coal-fired power station is most likely to be run at reduced power or shut

down.

Table 3.3: Properties of different types of conventional power stations

Type Fuels Capital cost (annualized)

Operating cost

(mostly fuel)

Ability to ramp output

Capacity factor

Base-load Coal,

nuclear,

gas

High Low Low High

Intermediate-

load

Coal, gas Medium Medium Medium Medium

Peak-load Gas, oil,

hydro

Low

(not hydro)

High High Low

Source: Diesendorf, M. (2010). Greenhouse solutions with sustainable energy. Sydney NSW 2052: University of New South Wales Press Ltd.

Table 3.2 is structured to correlate with Table 3.1 as it defines the type of plant according to

the type of fuel, the capital cost, operating cost, their ability to ramp output, as well as the

capacity factor of each.

Renewable energy sources

Renewable energy sources can be defined as, “any energy resource that is available

naturally on a continuous basis or can be continually generated over a short period of time;

which may be on a daily basis, or over several days, or several years” (Ghosh & Prelas,

2009). These sources, also known as renewables consist of solar, wind, hydropower,

geothermal, ocean (tidal) and biomass energy. Moreover, these sources can either be derived

from the suns radiation directly (thermal, photochemical and photoelectric), indirectly (wind,

hydropower and photosynthetic energy stored in biomass) or naturally from the environment

(geothermal and tidal energy) (ibid; Kreith, 2015: 56-63). South Africa’s renewable energy

industry is still relatively small, but slowly growing. As noted in Chart 3.1, renewables play

a very small role in the total primary energy consumption of South Africa accounting for

roughly 1%. Moreover, a significant share of the energy produced from renewables comes

from hydropower; in spite of the fact that South Africa, like many African countries is a water

stressed state.

Figure 3.1: World map of water stress by countries

Source: wri.org

The White Paper on Renewable Energy (2003) released by the Department of Energy clearly

states that their primary objective was to produce 10 000GWh of energy using renewable

energy sources such as biomass, wind, solar and small-scale hydro by 2013. By achieving

the target, this was expected to:

• “Add about 1. 667MW new renewable energy capacity, with a net impact on GDP as

high as R1. 071- billion a year”;

• “Create additional government revenue of R299-million”;

• “Stimulate additional income that will flow to low-income households by as much as

R128-million, creating just over 20 000 new jobs”; and

• “Contribute to water savings of 16.5-million kiloliters, which translates into a R26.6-

million saving” (DoE, 2003b).

Although this target was not achieved, the Department of Energy is still committed to

generating 18.2GW by 2030 using renewable sources such as;

Wind - 8.4GW

Solar PV - 8.4GW

CSP - 1GW

Other - 0.4GW (ibid).

Furthermore, the Integrated Resource Plan (IRP) for Electricity 2010-2030 plans to further

readjust South Africa’s long-term renewable energy mix by 40,5% in the near future.

Chart 3.2: Planned new renewable generation mix 2030

Source: energy.gov.za

Even though Eskom produces clean energy from the Sere Wind Farm Project which has a

total generating capacity of 100MW, there is still a notable demand for sustainable, clean

energy. Much of the energy that is being produced for mass consumption comes from few

Independent Power Producers (IPPs) whom sell the energy generated to Eskom. However,

the market for IPPs is still relatively small considering the fact that Eskom has a stronghold

on the South African energy market. In order to increase investment from the private sector

to Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was

introduced in order to encourage private investment to further develop South Africa’s

renewable energy sector. In order to determine how South Africa can achieve their long-term

goal of renewable energy sustainability, the following chapter will highlight how the

countries in the following chapter assimilated their respective energy mixes.

18%

5%

40%

37%

Planned new renewable generation mix 2030

Hydro

CSP

Wind

Solar PV

CHAPTER 4

A TALE OF TWO NATIONS

Pioneers of innovative energy sustainability

The world has become so interconnected and interdependent over time that globalization has

gradually come to be recognized as one of the most effective avenues to solving global issues.

This particular phenomenon transcends above and beyond national boundaries by not only

integrating economies and providing beneficial solutions’, but it also plays a role as a catalyst

in compounding complex problems on a global scale. The aforementioned can stem from

contributions such as trade, finance, environmental conservation, technological innovation,

terrorism and migration.

Fossil fuels are the lifeblood of an industrialized society, supplying most of its energy

needs. In recent years, the problems with these fossil fuels-including environmental damage,

unequal global distribution of fossil fuel resources, price instability, and ultimately supply

constraints-have led to a reexamination of their use and a search for alternatives (Komor,

2004: 1). Renewable energy-solar, wind, hydropower, and others-is a promising alternative

to fossil fuels. Considering that renewable energy is relatively clean and widely available,

they also come with limitations as they are intermittent. In this section, two countries will be

used as case studies considering the fact that one is European, one is Asian, they both have

developed economies, IEA and OECD member countries and, that they are both innovators

particularly in the non-renewable and renewables sectors. Furthermore, the issue of climate

change is one that affects each and every country in the world.

Profile:

Country: The Netherlands

Area: 41, 543 square kilometers

Population: 17, 016, 967 million (2016 est.)

Key sectors: Agriculture (1,6%), industry (17,8%), services (70,4%)

Sector theme: Energy

Key project identified: Electricity

Figure 4.1: Map of the Netherlands specifying location

Source: cia.gov

Located west of Europe, the Kingdom of the Netherlands borders the North Sea and

shares its borders with two countries; Belgium and Germany. The country is strategically

subdivided into 12 administrative divisions, also known as “provincies,” with three other

special municipalities coming from the Caribbean namely the islands of Bonaire, Sint

Eustatius, and Saba, respectively (OECD/IEA, 2014: 17). As a result of their [provincies]

strategic geographic location, the climate may vary from being temperate and oceanic, with

them experiencing cool summers and mild winters, while the terrain is made up of mostly

coastal lowland, reclaimed land or polders (new land created from ocean, riverbeds or lake

beds) and hills in the southeast (cia.gov). Given its availability of inexpensive natural gas in

the Groningen region, which so happens to be one of the largest natural gas reserves in

Western Europe, the Netherlands’ has come to establish itself as a key contender in the

European gas market (Komor, 2004: 109).

Apart from the Netherlands historically being a consumer and an exporter of natural

gas, the country is also dependent on oil imports (crude and refined) which reached a high of

46Mtoe in 2012 (Deloitte, 2015). Consequently, the country is considered to be the fifth

largest exporter of natural gas and a net importer of fossil fuels (oil and coal) (IEA, 2016:7).

Moreover, due to its high dependency on fossil fuels and it being a major exporter of natural

gas, the country report on the Netherlands by Deloitte points out by 2025 the country is most

likely to be a net importer of gas. In addition to that, the Netherlands is also regarded to be

one of the most carbon-intensive countries in Europe, with more than 80% of its electricity

generation mixes coming from gas and coal, as well their energy consumption increasing by

21% from 1990-2012 (Deloitte, 2015:108-109). Below in Chart 4.1 is the total primary

energy consumption of Netherlands which shows how dependent they are on fossil fuels,

considering that they import much of their oil and coal with renewables playing a very small

role with a combined share of 0,6%. However, one needs to understand what and how the

Dutch were successful in implementing their “green” electricity boon.

Prior to 1995 when the Dutch green electricity market was about to take off, the

market itself was characterized by a monopolistic and fragmented market construct.

(Agterbosch, 2006:45-47).

Chart 4.1: Netherlands total primary energy consumption, 2014.

Source: iea.org

Gas38%

Oil36%

Coal10%

Biofuels and waste13%

Nuclear1%

Wind0%

Solar0%

Other2%

Total primary energy consumption

Gas Oil Coal Biofuels and waste Nuclear Wind Solar Other

During this time (1989-1995), although the electricity companies were owned and controlled

by provincial and municipal authorities, they were able to generate electricity, connect high

voltage transmission, low voltage distribution and supply to the end users (ibid).

In Renewable Energy Policy, Paul Komor, gives a brief, detailed example as to how

the Dutch green electricity market was a success. The market began in 1995 with a pilot

program run by the Dutch utility PNEM. As a result, this lead to an innovative market

campaign by the World Wind Fund for Nature (WWF) whom restructured the electricity

market by giving residential and non-residential consumers electricity choice. (Komor, 2004:

109). This proved to be successful for a number of reasons, namely; 1) price – green

electricity cost about the same as brown electricity with non-green users having to pay an

“ecotax”, 2) the market being open to multiple providers and consumers having the choice

of choosing which product best suited them, 3) smart marketing in the form of sign-ups,

innovative approaches, as well as there being:

• “Heavy taxes on fossil-based electricity, green electricity is about the same price as

non-green electricity”,

• “The green market opened first, creating a competitive green market in advance of

overall competition”,

• “Dutch companies have used creative marketing techniques to promote green

electricity”,

• “In addition to fossil fuel taxes, the Dutch government has several other aggressive

policies that support renewable electricity” (ibid, Agterbosch, 2006).

In order to elaborate on the aforementioned steps to success, Table 4.1 will delve further into

briefly explaining the necessary steps that government took in order to achieve their goal of

sustainable green energy market.

Table 4.1: Factors behind green electricity market success

Price Due to green electricity products in the Netherlands costing roughly

the same as regular brown electricity, users of non-green electricity

pay a regulating energy tax known as an “ecotax.” This entitles

users to pay per-kilowatt-hour (kWh) according to their

consumption.

Choice Seeing as the market was opening up to multiple providers,

consumers could basically choose a green product that suited their

needs. As a result, this built on building brand awareness and

accommodating unsatisfied customers.

(e.g. – billing dispute, bad article review, “word of mouth”..etc.).

Smart marketing These include attracting sign-ups through innovative approaches

such as raising environmental awareness and the involvement of

various stakeholders.

(e.g. – Publicity campaign “Don’t let the North Pole melt.” On the

other hand, various companies using different methods such as

receiving food gift vouchers, international call vouchers and price

guarantees to users of green electricity.)

Policies • Tax exemptions for those investing in green funds.

• Accelerated depreciation for certain technologies.

• Tax credits for certain technology investments.

• Direct support payments to renewable generators’

• Green certificate trading system. Source: Komor, P. (2004). Renewable Energy Policy. New York: Diebold Institute for Public Policy Studies. iUniverse, Inc.

In the previous table, there is mention of “green certificates.” These accounting tools, also

known as tradeable renewable certificates (TRC’s), green tags or renewable obligation

certificates (ROC’s) are used to account for or monetize the environmental attributes of

renewable-sourced electricity generation. However, these come with various advantages,

namely: 1.) coming with widespread political support with little or no direct political

opposition; 2.) providers prefer them as they provide a new revenue system; 3.) offer

reasonable administrative costs; 4.) is a market mechanism that is economically efficient

(Komor, 2004: 110). From a disadvantage point of view, it points out that it is: 1.)

complicated to understand and implement; 2.) effects on renewables are largely unknown;

3.) unclear relationship with carbon or other pollutant trading, as well as 4.) international

trading raising difficult administrative and policy questions (ibid). As much as the green

market experienced a success in the Netherlands, results varied in other countries such as the

United Kingdom and the United States of America due to moderate-low participation/ sign-

up levels.

The Dutch power generation market is moderately concentrated with four main actors

(NUON/ Vattenfall, Essent/RWE, E.ON and Electrabel/ GDF SUEZ) who hold a significant

market share, managed 55% of installed power capacity in 2013 (Deloitte, 2015: 110;

Agterbosch, 2006: 50-53). Moreover, with the market being fully open to competition since

2004, and 2002 for industry, entry for large European vertically integrated companies (E.ON,

RWE, GDF and Vattenfall) entitled them to purchase assets from former national generation

and distribution companies such as NUON and Essent. As a result, Tennet which is the state

enterprise, is the sole national transmission system operator (TSO), while the distribution

network is operated by 8 distribution companies which are fully independent (provincial or

locally owned) and others which are independently governed, respectively.

Figure 4.1: Wind turbines

Source: Author

With the Netherlands moving away from the use of fossil fuels and looking to

increasing its production of renewables, its energy targets according to the Energy Agreement

for Sustainable Growth aims to have final energy consumption to come from renewable

energies by 14% in 2020 to 16% by 2023 (OECD/IEA, 2014:11). Wind Power is expected

to expand in the long-run, thus contributing to closing the renewable energy gap. In order to

do so there are various policies/ programmes (short- medium- long) which the Dutch

government has implemented and is continually improving in order to achieve their demand,

supply and environmental goals. These consist of:

• Energy Law of 1998

• Clean and Efficient Programme (2007)

• National Renewable Energy Action Plan (2011)

• Environmental Management Act (2013)

• Energy Agreement for Sustainable Growth (2013)

• National Energy Efficiency Action Plan (3rd NEEAP, 2014) (OECD/IEA, 2014: 23-

27).

Figure 4.3: Wind turbine

Source: Author

In order to certify that the aforementioned policies or programmes are properly regulated,

there are government institutions, regulatory authorities and organizations that all work

together for efficient implementation. For example, ministries such as that of Economic

Affairs; Housing Spatial Planning and Environment to name a few are closely involved in

energy and environmental policy. On the other hand, the Netherlands Authority for

Consumers and Markets (ACM) has regulatory powers to supervise electricity, natural gas

and district heating markets; while the organizations primarily deal with research and

development (R&D) (OECD/IEA, 2014: 22-23).

However, although the Netherlands is working towards producing clean, efficient

energy it has also encountered problems particularly in regard to renewables which include;

opposition to new capacity being built (politically), conflict between landowners and

neighbors’ (“visual intrusion” with no compensation) and shortages in renewable supply

leading to importing renewable electricity resulting in questioning as to whether it is

subsidized or not considering its point of origin? (Komor, 2004, 112). Thus, in order to handle

supply constraints, there is a need for further attention to be paid particularly towards policy

on both the supply and demand ends of the various energy markets.

Profile:

Country: Japan

Area: 377, 915 square kilometers

Population: 126, 702, 133 million (2016 est.)

Key sectors: Agriculture (1,2%), industry (27,7%), services (71,1%)

Sector theme: Energy

Key project identified: Electricity

Figure 4.4: Map of Japan specifying location.

Source: cia.gov

Located in Eastern Asia, Japan is a mountainous island chain located between the

North Pacific Ocean and the Sea of Japan, stretching as far as east of the Korean Peninsula.

Although it shares no borders with any other countries, its closest neighbors north-west off

of the Sea of Japan consist of Russia, China as well as North and South Korea. The country

is strategically subdivided into 47 administrative divisions, known as “prefectures,” with the

climate varying from being hot and tropical in the south to cool temperate and cold winters

in the north (cia.gov). As a result of its strategic geographic location, Japan’s terrain is mostly

rugged, with arable land covering a total area of roughly about 13% (cia.gov).

The island nation of Japan heavily relies on fossil fuel imports which contribute

towards a large share of its total energy supply, and as a result has placed energy security

as its primary priority. Consequently, this lead to Japan not only being a pioneer in the field

of energy technology development, but also made them one of the world’s largest

consumers and importers of energy, particularly in the liquified natural gas (LNG) trade (IEA,

2016: 9). In addition to that, the extensive use of nuclear energy throughout the decades

contributed exponentially not only towards Japans energy mix, but also its strong position

as one of the worlds’ leading economies, as well as the fifth largest electricity user (IEA,

2016: 9). Considering how important energy efficiency is for Japan, imports for fossil fuel

supply are seen as key to providing sufficient, efficient energy. However, the question

remains to be answered as to how they are able to achieving energy and environmental

protection. Below in Chart 4.2 is the total primary energy consumption of Japan which

points out how dependent they are on fossil fuels, with renewables in 2005 making up a

3.0% share of total primary energy supply (TPES) and merely increasing to 5.7% of TPES in

2015 (IEA, 2008: 148; IEA, 2016: 119).

Chart 4.2: Japan’s total primary energy consumption, 2015.

Source: iea.org

Apart from oil, coal, and natural gas making up a considerable portion of Japans energy mix,

renewables and nuclear energy make up a small fraction of the country’s TPES. Moreover,

the renewables consist of biofuels and waste (2,6%), hydro (1,7%), geothermal (0,5%), solar

(0,8%) and wind (0,1%) (IEA, 2016: 17). However, one needs to understand why it is that a

developed country such as Japan comprises of such a miniscule nuclear energy supply ratio

compared with other energy sources?

42.90%, 43%

27.50%, 27%

23.30%, 23%

0.60%, 1%5.70%, 6%

TOTAL PRIMARY ENERGY CONSUMPTION

Oil Coal Natural Gas Nuclear Energy Renewables

There are two reasons that point out as to why this may be the case, namely:

• Human security

• The Fukushima disaster.

According to the Commission on Human Security (CHS), the notion of “human

security” in its final report is defined as:

“…to protect the vital core of all human lives in ways that enhance human

freedoms and human fulfillment. Human security means protecting

fundamental freedoms – freedoms that are the essence of life. It means

protecting people from critical (severe) and pervasive (widespread) threats

and situations. It means using processes that build on people’s strengths

and aspirations. It means creating political, social, environmental,

economic, military and cultural systems that together give people the

building blocks of survival, livelihood and dignity.” (un.org).

Moreover, as a people-centered concept, human security threats involve economic, food,

health, environmental, personal, community and political security. Thus, the aforementioned

threats are in one way or another interlinked, with those in Japan, particularly economic and

environmental taking precedence over the others. However, as mentioned before, securing

efficient, sustainable energy is the is the key determinant in assessing the economic

development and the environmental impact.

With the first commercial nuclear power plant operational in 1966; nuclear power was

considered as complementary in regard to its energy mix, while on the other hand it was seen

as an alternative to fossils fuels on the subject of clean air (Bae & Maruyama, 2015: 105). As

a result, from 1966 to 2005, the number of nuclear reactors was on the rise until it reached a

total of 55 nationwide (ibid). These contributed toward security in terms of supply, improving

economic performance and reducing GHG. Although nuclear plants produce electricity

without releasing any GHG, the downside to using it as an energy source is that it produces

radioactive waste which may pose as a serious long-term concern regarding the safety and

environmental aspect of human security.

March 11, 2011 marked a turning point in regard to nuclear power, particularly

toward policy implementation, considering that policymakers were tasked with undertaking

an in-depth review of the current state of affairs and how this would affect the country’s

energy supply. The Great East Japan earthquake, which triggered a tsunami, disabled and

partially if not completely destroyed a majority of the reactors at the Fukushima Daiichi

nuclear power plant. Unlike, the Three Mile Island accident (1979) and the Chernobyl

accident (1986) which resulted from a cooling malfunction and a flawed reactor design, as

well as inadequately trained staff, respectively; the Fukushima disaster was a consequent of

a natural disaster which in turn incapacitated 3 reactors causing their cores to completely

melt, thus producing and releasing high levels of radioactive waste (world-nuclear.org). As

a result, the government ordered the shutdown of all its nuclear reactors, which lead to:

• 30% gap in electricity supply (closed by LNG, coal and oil; in part by renewables and

electricity savings).

• Dependence on fossil fuels rising from 80% - 94% (2010 - 2013).

• Annual carbon dioxide emissions had rising by more than 110 million tonnes (IEA,

2016: 9).

However, prior to the 2011 Fukushima disaster, in 2009 Japan attended the 15th Conference

of Parties (COP 15) in Copenhagen, Denmark, where they pledged to reduce its GHG

emissions by 25% (1990 - 2020), hence, increasing the nuclear power share from 30% - 50%

(ibid).

With Japan having envisioned their long-term energy objectives sidetracked as a

result of the disaster and the temporary closure of their nuclear power plants, their goal of

reducing their GHG emissions in the specified timeframe seemed highly unlikely. This can

be attributed to the significant drop in nuclear energy supply in a short space of time, which

raised concerns among demonstrators regarding their safety and calls for the complete

termination of the of nuclear power generation by 2030 considering that reliance on fossil

fuels is too costly for government in the medium to long-term. On the other hand,

policymakers had the daunting task of reanalyzing their energy policies which comprise of:

• Third Strategic Energy Plan (2010)

• Fourth Strategic Energy Plan (2014)

• Long-term Supply and Demand Outlook to 2030 (2015)

• National Energy and Environment Strategy for Technological Innovation Towards

2050 (2016) (ibid, 22).

Although the Japanese government had intended on implementing the 3rd Strategic Energy

Plan which sought to expand the share of nuclear and renewable resources up to 70% by

2030, the unforeseen events of March 11, 2011 resulted in it being superseded by the 4th Plan

(ibid).

Thus, the aforementioned policies were structured with the objective of;

1. “Smaller role for nuclear energy than the 2010 plan”,

2. “Reductions in demand through energy efficiency, reform, and deregulation of both

the electricity and gas markets”,

3. “Accelerated deployment of innovative technologies in renewable energy, solar and

wind in particular”,

4. “Optimization of the oil refining and distribution industry”,

5. “Promotion of efficient coal-fired power plants”,

6. “Robust investment in advanced energy research and development”,

7. “Creation of a strong safety culture in a smaller nuclear industry.” (ibid, 23-24;

meti.go.jp).

Japan has a well-organized, structured governing body of organizations, regulatory

authorities and various government institutions which are interconnected, if not autonomous,

to work together towards implementing sound programmes and policies. Table 4.2 will

provide a list of the various institution and what each of their functions or specialty is.

Table 4.2: Japan’s Regulatory bodies

Ministry of Economy Trade and

Industry (METI)

“has the overall responsibility for energy policy in

Japan.”

Agency for Natural Resources

and Energy (ANRE)

“in charge of comprehensive energy policies to ensure

strategic energy security, realize an efficient energy

supply and promote environment friendly energy

policies.”

Ministry of the Environment “climate change and air pollution mitigation.”

Ministry of Education, Culture,

Sports, Science and Technology

“certain areas of energy research and development.”

Ministry of Land, Infrastructure,

Transport and Tourism

“energy efficiency.”

Ministry of Foreign Affairs “resource diplomacy.”

Electricity and Gas Market

Surveillance Commission

(EGC)

“monitors the electricity, gas and heat markets.”

“enforces strict regulations to ensure the neutrality of

electricity networks.”

“It can suggest policy recommendations to the minister

regarding rulemaking in the market.”

Japan Fair Trade Commission

(JFTC)

“responsible for monitoring competition in all sectors

of the economy.”

Nuclear Regulation Authority

(NRA)

“independent body in charge of protecting the general

public and the environment through rigorous and

reliable regulation and oversight of nuclear activities.” Source: iea.org

As much as Japan is working towards reducing the GHG emissions by 2030, the

country is still very much dependent on fossil fuels. Although it is continually working

towards further promoting renewable energy, this is not an easy task as their energy policy’s

primary objective is to create sustainable, efficient energy through nuclear development.

However, the current nuclear infrastructure requires thorough inspections and monitoring as

they slowly plan to gradually decrease the use of nuclear energy. Those opposed to nuclear

power have voiced their opinion that nuclear power generation should be abolished by 2030.

This leaves Japan in quite a predicament, as they will have to find other alternatives

and other technological advancements’ in regard to fossil fuels to reduce the GHG emission

targets. Furthermore, careful attention to policy is imperative towards energy development.

CHAPTER 5

Lessons learned

The Netherlands’ and Japan are two countries that share a commonality in energy

dependency on fossil fuels such as natural gas and nuclear power, respectively. Both of the

aforementioned countries, although high GHG emitters, have found or are finding innovative

ways of generating efficient, sustainable energy through sound energy policies.

As much as the majority of energy generation for the Netherlands (natural gas – 38%;

oil – 36%; coal – 10%) and Japan’s (natural gas – 23%; oil – 43%; coal – 28%) coming

from fossil fuels, these countries are working toward reducing their reliance on one or more

of the energy sources mentioned. For example, considering that the Netherlands produces

natural gas, it is investing in renewables (particularly wind) as natural gas is eventually going

to run out.

Similarly, Japan on the other hand is also working towards reducing their reliance on the

importation of oil which has gradually become an expensive commodity. As a result, they

have also resorted to stock piling barrels of oil in the event of an energy crisis, hence, the

Fukushima disaster. Moreover, the eventual phasing out of nuclear energy power and the

transition of renewable energy in the long-run is seen as imperative from various perspectives.

In order for this to be viable, both countries have various institutions’ which regulate,

cooperate, as well as provide research and development which contribute towards a common

purpose. By doing so, they are able to draft and implement energy policies which are

environmentally friendly, economically feasible and socially accepted.

Energy policy recommendations

South Africa has been and will always be an energy intensive country. Looking at the

various sectors that contribute towards the country’s economy, coal like many other fossil

fuels, still have a major role to play in growing the economy and maintaining its hegemonic

status. However, the country does need to reduce its reliance on coal by increasing its energy

mix, particularly in regard to nuclear and more importantly renewables (wind, solar/

concentrated solar power – CSP/ biomass...etc.). Having analyzed case studies of both the

Netherlands and Japan, South Africa has much to learn from both considering their

backgrounds in renewable and nuclear energy development, as well as policy implementation

methods. In order to do so, South Africa must;

Decentralize its energy generating, transmission and distribution systems,

As a result of decentralization, the provinces should be autonomous in regard to operating

infrastructure and generating their own electricity (comparative advantage in regard to

producing electricity from a particular energy source of that region) ,

Nationally liberalize the energy market for various utility companies,

By heavily taxing brown energy (coal, oil…etc.) for non -residential consumers according to

their GHG emissions,

Promote green energy to be a choice for various users, according to their socioeconomic

status,

Adopt and promote policies that provide incentives for both residential and non – residential

users, such as “price guarantees’” as well as “green certificates” similar to those used in the

Netherlands,

Government also needs to implement short, medium and long-term energy policy objective

which should be reviewed every 2, 4 and 8 – year basis, respectively (primarily to determine

whether the objectives on a local, national and an international level are being met and if not,

how they can be attained),

Finally, government (departments) need to constantly communicate with other departments,

agencies, organizations’ and involve the public on decisions involving energy expenditure as

well as policy proposals (transparency).

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