The missed opportunity to consign blackouts to history
This year’s escalating crisis of load-shedding due to an ageing, failing energy system could have been avoided had adequate new renewable capacity been brought online, suggests a 2022 publication by Meridian Economics. “Empirical evidence demonstrates that an additional 5 GW of renewable capacity would have essentially solved load shedding in 2021 whilst enabling better and more efficient operation of our power system – all at a cost saving to Eskom”, states the report.
Eskom’s own development plans outline the need for more than 5 GW of new renewable capacity to come online every year over the next decade. Not only would such measures resolve the blackouts, but it would also kickstart South Africa’s green industrialisation and decarbonisation ambitions. Moreover, thanks to technological advancements, homegrown renewable generation is significantly lower in cost in comparison to historically ‘cheap’ coal. For example, since 2020, solar power has provided the world’s cheapest electricity in history — and costs have continued to fall ever since.
The economic and social cost of blackouts
Economists have calculated that the blackouts have cost South Africa to the tune of trillions – not billions – over the course of the protracted crisis. These staggering losses will continue until the scourge is solved via investments in renewable generation and transmission capacity. While the just transition towards a clean power system requires significant investments over the coming decades, these costs pale in comparison to the relative socio-economic losses caused by blackouts. At the same time, this low-carbon energy system is more secure, cleaner and will lower bills for households and businesses.
Pan-African Investments and Research Services CEO Iraj Abedian provides further human context for the “preventable” crisis: “The emphasis has to be on socio-human costs and the systemic damages to the fabric of the society; and not merely on financial damage — important as that one is. The failure to focus on societal damage is that it allows the politicians to pretend as if it is all about money and pecuniary damage so that they can say sorry and move on!”
The power of renewables for economic and energy security
Progress might be on the horizon, as the declaration of a state of disaster to address the crisis could allow for the faster rollout of generators and solar panels, highlights Reuters. Special measures could accelerate the uptake of solar in public sector buildings such as hospitals, schools and municipal buildings through a nationalised central tendering process. To facilitate this, the government is considering funding schemes to allow for easier access to solar panels and reducing the time taken to award development.
Furthermore, since 1st March, businesses can now reduce their taxable income by 125 per cent of the cost of an investment into renewables, with no cap in size. The expected acceleration in the rate of rooftop solar installations could make a “massive difference” to clean energy capacity, writes Mark Swilling from Stellenbosch University in the Daily Maverick. “Vietnam did something similar in response to their energy supply crisis, and the result was the installation of 9 GW of new capacity in one year (2020)! We should not underestimate the potential of a ‘Vietnam solution'”, he added.