Business Maverick

OP-ED

A masterplan: South Africa’s renewable energy sector must move at the speed of trust

A solar panel and wind generator at the Greenpeace renewable energy centre on Durban's beachfront during the COP 17/CMP 7 United Nations Climate Change Conference in 2011. By 2030 the eThekwini Metro wants 40% of all energy to come from sources other than Eskom, and by 2050 it aims to be 100% reliant on clean energy sources (Photo: EPA/NIC BOTHMA)

The renewable energy sector is young, diverse and fragmented, with industry structures that are relatively immature. The current industry associations are characterised by technology and territorial competition, and can no longer be seen as representing the broader sector.

The existing renewable energy industry associations in South Africa are somewhat inwardly focused and vie for relevance among a membership base of developers, independent power producers (IPPs), technology providers, original equipment manufacturers (OEMs), equipment suppliers and installers.

However, the traditional boundaries between suppliers and customers of renewable energy are radically changing, as customers and consumers also become generators or producers of electricity within the supply chain. 

Things are moving fast, from the former environment where Eskom was the single buyer of renewable energy from IPPs, towards a diverse, competitive and multifaceted renewable energy sector. 

Eskom, the biggest customer of renewable energy, is today also a generator of renewable energy, and has ambitions to increase its production. 

Similarly, municipalities are also targeting renewable energy generation, as too are mining, industrial, commercial, agricultural and even domestic consumers, with the generation regulations slowly catching up to accommodate these changes.

And so, the very basis and nature of stakeholders making up the renewable energy sector is undergoing major and rapid change. 

No longer can an exclusive group of industry associations, representing developers, technology providers, OEMs, equipment suppliers and IPPs claim to constitute, represent or act as the “voice of the renewable energy sector”. 

Other, more mature and formalised structures within government, government agencies, Eskom, municipal electricity, organised business and labour, energy-intensive users in mines and industry, commercial banks, development finance institutions (DFIs), investment funds, professional associations, civil society and more, have developed alongside the renewable energy industry associations. 

Accordingly, these stakeholders also want to participate in structures representing the new and broader renewable energy sector. This is a normal progression, as traditional electricity customers also become renewable energy producers, and as financial institutions and other key stakeholders start to play a critical role in the sector’s growth, in line with the Integrated Resource Plan for electricity, IRP 2019.

So, when Mineral Resources and Energy Minister Gwede Mantashe noted a need to sit down and engage with a renewable energy sector that could “speak with one voice”, it was not going to be as straightforward as is the case with the Minerals Council South Africa, which has evolved over a period of more than 100 years and is able represent the broader mining sector, with formalised structures in place. 

Nor was it simply going to be a matter of inviting the existing renewable energy industry associations to the department of mineral resources and energy. 

Rightly or wrongly, the minister perceived these associations to be “lobbyists” and renewable energy project salespersons dominated by foreign developers and IPPs controlled by these developers, that were focused on closing the next deal rather than serving the broader renewable energy sector and the national interest.

What was therefore needed, it seems, was an initiative to establish a new, legitimate and inclusive ministerial Renewable Energy Sector Engagement Forum (RESEF) that could engage meaningfully with government representatives on an ongoing basis.

The ultimate intended purpose of the initiative – for which the European Union delegation to South Africa has provided independent technical, administrative and advocacy support, as well as funding in a bid to advance South Africa’s green economy – is to provide a platform and forum of communication to address bottlenecks that may be inhibiting the implementation of government policy and planning commitments in respect of the delivery of renewable energy.

The department also made it clear that the RESEF initiative should be aligned with other department- and DTIC-led initiatives, such as the South African Renewable Energy Masterplan (SAREM). 

SAREM is part of a planning process that seeks to identify specific industrialisation opportunities in the renewable energy value chain, and shares a common set of stakeholders with RESEF.

The first founding meeting of RESEF, held on 16 July 2020, was addressed by minister Mantashe, and there was an overwhelming consensus from about 150 attendees for the establishment of RESEF. 

At the meeting, the minister said the engagement had “exceeded his expectations” and that he was “happy with the representivity” of the meeting. 

The minister subsequently wrote: “It was a good forum. It must be repeated.”

Thereafter, following a call for nominations from the various stakeholder clusters identified, a second founding meeting of RESEF was held on 20 October 2020, at which the attendees overwhelmingly approved and ratified both the forum’s composition, as well as the nominations from the various stakeholder clusters for seats and alternate seats on RESEF. 

These names have since been forwarded to the minister and department of mineral resources and energy, together with a list of suggested key issues to be addressed in further engagements. 

Up to now, unconditional funding for the work of the independent facilitator for the two RESEF founding meetings has come from four renewable energy sector industry associations (SAPVIA, SAWEA, SAIPPA and SAESA), the European Union delegation to South Africa and the British High Commission in South Africa. 

While good progress has been made, there is still significant work ahead that has to be done in order to ensure that RESEF is established, bedded down, becomes functional and operates as intended.

Effective and transparent stakeholder management and communication is critical throughout the process in order to ensure trust between the renewable energy sector stakeholders themselves, as well as a constructive engagement with the minister and his department officials based on mutual respect, goodwill and the acceptance of good faith. 

Initial efforts to establish the right posture, form, process and structure may be considered somewhat slow. 

However, these efforts are necessary to build trust and prepare the way forward for an ongoing engagement on the substantial issues, in a smaller, legitimate and properly constituted forum – RESEF – that enjoys the confidence and support of all participants, and has the effect of expanding the pie: something the South African economy desperately needs.

To borrow some wise words from the SAREM initiative: One needs to “move at the speed of trust”. DM

Chris Yelland, MD of EE Business Intelligence, was the independent facilitator of the first two founding meetings of the Ministerial Renewable Energy Sector Engagement Forum (RESEF). His work in this regard was funded by the European Union Delegation to South Africa, the British High Commission in South Africa, SAPVIA, SAWEA, SAIPPA and SAESA.

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