Renewable energy policy in South Africa: policy options for renewable electricity

Investment in renewable energy and energy efficiency is important to reduce the negative economic, social and environmental impacts of energy production and consumption in South Africa. Currently, renewable energy contributes relatively little to primary energy and even less to the consumption of commercial energy. This article examines policy options for promoting renewable electricity. Feed-in tariffs guarantee prices for developers, but lack certainty on the amount of renewable electricity such laws would deliver under local conditions. Portfolio standards set a fixed quantity, which would guarantee diversity of supply. The question is whether the incremental upfront cost to be paid by society may be unacceptably high, compared to future health and environmental benefits. A renewables obligation combines the setting of a target with a tendering process, but may be bureaucratic to administer. Neither setting targets or regulating prices alone, however, will be sufficient. Power purchase agreements, access to the grid and creating markets for green electricity are some supporting activities that should be considered. Given that renewable electricity technologies have to compete with relatively low electricity tariffs, funding will be needed. Possible sources, both locally and internationally, are identified. The extent to which these are utilised will determine the future mix of renewable energy in South Africa.