‘Packaging problem’ leaves green energy billions idle in SA

“We have had a problem with packaging.” 

This is the view of Samantha Graham-Maré — Deputy Minister of Electricity and Energy — who spoke to Daily Maverick on the sidelines of the Global Citizen Reverse Power Panel hosted in Melrose Arch before the G20 Summit. 

While Graham-Maré’s comment about a “packaging problem” specifically related to the nature of funding around the so-called “Just Energy Transition”, it could be extrapolated to some of the challenges that the ministry has faced in its various guises over the past few years. 

Until June 2024, the energy cluster had remained under the stewardship of the Department of Mineral Resources and Energy (DMRE) and Minister Gwede Mantashe, who struggled with a fractious relationship between stakeholders — particularly around the role of renewable energy in South Africa’s energy mix and private sector participation. 

“One of the things that we need to appreciate is that the private sector has stuck with the government through thick and thin,” says Graham-Maré when asked about improved relationships between stakeholders and greater appetite for public-private partnerships. 

She credits Electricity and Energy Minister Dr Kgosientsho Ramokgopa for his role in improved engagements and the expansion of the Renewable Energy Independent Power Producer Procurement Programme as setting a “gold standard” for public-private partnerships — the Government of National Unity (GNU) has also “contributed to a shift in mindset”.

This — she says — is starting to show in the most recent growth and employment data, which shows the critical role that energy security plays. Businesses will invest if they know that they are guaranteed a stable energy supply. 

Nuclear, funding and the opportunity gap 

While there was a high degree of optimism in the presentation from the deputy minister around green jobs and funding, there remain disconnects around the energy roadmap for the country. 

There are limitations around wind energy deployment in South Africa, with a number of projects failing to reach financial close. On top of this, residential roof-top solar players are collapsing with load shedding becoming a distant memory. 

At the same time, the contentious subject of nuclear energy is coming back into the narrative. This is evidenced in the recently released Integrated Resource Plan. 

Pointing to a strategy to look at coal-to-nuclear infrastructure conversions, the deputy minister says they don’t want to be sitting with “stranded assets” and will be looking to nuclear to provide a key part of the base load energy infrastructure. To that end they are bringing the Pebble Bed Modular Reactor out of “care and maintenance” in the coming months. 

The Integrated Resource Plan does, however, guide that the technology is not commercially viable and only expects this to change post 2030. 

The natural next question is how South Africa will fund its energy transition. While 2025 saw Eskom deliver its first annual profit in eight years, the state-owned enterprise was still struggling under nearly R400-billion in debt. 

With government guarantees related to this debt and municipalities constrained by poor collections, South Africa does not have a lot of room to move when it comes to funding a transition to cleaner energy solutions. 

Much has been made about the $12.8-billion Just Energy Transition funding package from developed nations to encourage a transition to lower carbon emissions. 

“We’ve spent almost none of it,” says Graham-Maré explaining that the majority of this funding is debt rather than grant funding. 

“There is lots of funding out there, we have just historically had a problem with our packaging [to funders],” she says. DM