Opinion | SA has pioneered before - now it must show the world it can fix the energy crisis

Opinion | SA has pioneered before – now it must show the world it can fix the energy crisis

South Africa once influenced the world widely with its progressive constitution, which was developed in a country on the brink of civil war. Today, the country has once again entered a turning point, but this time it must ensure that citizens have permanent and affordable access to electricity, he says Bridget Magola.

On 4 December 1996, the Constitution of the Republic of South Africa was approved by the Constitutional Court before it came into force in February 1997. It is widely considered to be one of the most progressive and comprehensive constitutions in the world, and has influenced constitutional development in many countries, Especially in Africa. Given the high regard in which the Constitution is held, it is easy to forget the amount of violence and turmoil that preceded its adoption. During the early 1990s, the country was teetering on the brink of civil war. All along, people who thought there was a better way would collaborate, debate, and come up with a document that would become the cornerstone of the country’s democracy.

Today, the country finds itself at a similar inflection point. But the battle this time is not how to enshrine the rights of citizens, but to ensure that they have access to electricity permanently and at reasonable prices. While it’s easy to get depressed with South Africa’s power problems (especially with loads already unloaded record levels In 2023), there are many people working on the problem.

From the people helping South Africans with rooftop solar panels to the companies building major renewable energy projects and those working to make homes, offices and factories more efficient, they all contribute to making South Africa a greener and energy safer place. If all these initiatives are implemented properly, South Africa may once again see a role model for the world. But in order to achieve this, the right legal framework must be put in place.

Promote economic growth and save lives

Before delving into what this framework might look like, it is worth reminding ourselves of exactly why the South African energy transition is so important.

First of all, shedding loads has clearly had a devastating effect on the economy. With the high phases of scheduled power outages costing the economy upwards billion rand per day And Hundreds of businesses that have closedIt should not be surprising that the economy It grew by a modest 0.4%. In the first three months of 2023.

But even if Eskom has consistently managed to keep the lights on for the past 15 years, there will still be a strong case for moving to new forms of energy. Utility, after all, is the world The most polluting energy company. Over time, this could make it more difficult for South Africa to receive investment, particularly from countries and investment funds with strict environmental standards. And of course the country will still be penalized because of the cross-border carbon taxes that many countries impose on tax goods and services produced using energy from fossil fuels, the dirtiest of which are taxed, reducing our competitiveness. This does not mean anything about a file Almost 80,000 people Some researchers estimate that it could die by 2025 from breathing emissions from Eskom’s coal-fired power plants.

It should be clear, then, that the current moves to expand South Africa’s energy mix will always have been a necessity. The difference is that there is now an unprecedented opportunity to accelerate this transformation. But in order to make a positive impact on the lives of most ordinary South Africans, a comprehensive legal framework is crucial.

Build the right framework

Make no mistake, this framework is going to be really critical. Without it, there is the risk of energy prices spiraling out of control (as has been the case in the UK and Europe since the Russian invasion of Ukraine) and skilled workers adding to the country’s already dire unemployment statistics.

Therefore, this framework should work to ensure that electricity is within the reach of all South Africans by ensuring that the electricity power market remains competitive for both Eskom and private producers. In addition, it should provide legal clarity on how to achieve a just transition, particularly when it comes to ensuring that workers in the traditional space are not left high and dry.

Fortunately, South Africa has a good base to start on that front. From a political and regulatory perspective at least, the country’s Independent Power Producers Program (IPP) with its economic development goals and benchmarks is widely recognized as among the best in the world. If the same thought and application are given to the country’s energy transition legal framework, the world can once again look to South Africa for models to follow just as it did when the constitution was first ratified.

Broad cooperation is required

On the other hand, if companies, institutions, government departments, and government officials only work for their own ends, the country will miss a golden opportunity. Therefore, it is crucial that they realize how important this moment in time is and that the highest priority is given to continued collaboration through the National Energy Crisis Committee (Necom), which was formed last year to address load loss, to achieve the best results. . Given the environmental and energy contexts both locally and globally, we are at a point that can be just as important as signing the constitution. But if that is the case, all players must recognize this moment and play active roles in building a framework that can serve as an inspiring model for the rest of the world.

Bridget Magola, Director: Banking & Finance & Head of Project Finance: Energy & Infrastructure at law firm CMS South Africa & Gavin Noeth, Senior Counsel at law firm CMS South Africa. News24 encourages freedom of speech and the expression of diverse points of view. The opinions of the columnists published in News24 are therefore their own and do not necessarily represent the views of News24.

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