Country Energy Profile: South Africa - Clean Energy Information Portal

Energy Profile South Africa

The Republic of South Africa (also referred to as South Africa, SA or RSA) is a state in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with 2,798 kilometres (1,739 mi) of coastline on the Atlantic and Indian oceans. To the north of the country lie the neighbouring territories of Namibia, Botswana and Zimbabwe; to the east are Mozambique and Swaziland; while Lesotho is an enclave surrounded by South African territory. South Africa is multi-ethnic and has diverse cultures and languages. Eleven official languages are recognised in the constitution. Two of these languages are of European origin: Afrikaans, a language which originated mainly from Dutch that is spoken by the majority of white and Coloured South Africans, and South African English. Though English is commonly used in public and commercial life, it is only the fifth most-spoken home language. All ethnic and language groups have political representation in the country's constitutional democracy comprising a parliamentary republic; unlike most parliamentary republics, the positions ... read more

Source: dbpedia

Policy and Regulation

Source: REEEP Policy Database (contributed by SERN for REEEP)

Energy sources
Reliance
Extend network
Capacity concerns
Renewable energy
Energy efficiency
Ownership
Competition
Energy framework
Energy debates

Energy studies
Role of government
Government agencies
Energy procedure
Energy regulator
Degree of independence
Regulatory framework
Regulatory roles
Energy regulation role
Regulatory barriers

Energy sources

Electricity generation is dominated by the state-owned power company Eskom, which in 2010 produced 96.7% of power used in the country.

Eskom’s total installed electricity capacity (2010): 44,175 MW

According to the South African Energy Department, South Africa needs over 40,000 MW new generation capacity by 2025

Total primary energy supply (2009, source: IEA): 144,041ktoe
Coal and Peat: 68.29%
Crude Oil: 16.93%
Combustible Renewables and Waste: 9.83%
Natural Gas: 2.57%
Nuclear: 2.32%
Hydroelectric: 0.09%
Other Renewables (Geothermal, Solar etc.): 0.04%
Oil Product Exports: 0.03%
Electricity Exports: -0.1%

South Africa uses coal, its major indigenous energy resource, to generate most of its electricity and a significant proportion of its liquid fuels. Because of this, South Africa is the 14th highest emitter of greenhouse gases.

Energy contributes about 15% of South Africa's gross domestic product (GDP). Eskom is one of the world's 10 biggest electricity generators, and is in the top 11 in terms of sales. It generates around 95% of the electricity used in South Africa, as well as exporting power to other African countries. In addition to the functioning generation capacity, a number of previously-mothballed generating facilities are being re-commissioned, including a further 3,800 MW of coal-fired capacity.

ESKOM operates South Africa’s only nuclear power station, Koeberg (1,800 MW), two gas turbine generators (340 MW), six conventional hydroelectric plants (600 MW), and two hydroelectric pumped-storage stations (1,400 MW).

Electricity production was estimated at 258 TWh in 2008, mainly from thermal generation. Renewable energy currently only produces approximately 1% of the electricity generation.

South Africa had proven coal reserves of 48,000 million tonnes. They produce 283 million short tons of coal, while consuming 203 million short tons of coal. It exports approximately 28% of all coal mined.

As of January 1st 2008, South Africa had proved oil reserves of an estimated 15 billion barrels, and according to 2007 estimates produced approximately 199,100 bb/day and consumed approximately 505,000 bb/day.

Natural gas reserves were estimated at 27.16 million cu m in 2007, with 2.9 billion cu m being produced in 2006 and 3.1 billion cu m consumed in 2006.

Reliance

South Africa has traditionally been a net exporter of energy, with total energy exports of 1,186,647 TJ in 2005.

In 2008, the country was a net importer of crude oil and natural gas, importing 20,090 ktoe of crude and 2,421 ktoe of natural gas, whilst export energy commodities including coal (40,154 ktoe) and electricity (1,218 ktoe). A small amount of indigenously-produced biomass (263 ktoe) is also exported. Fuel for the country’s only nuclear power plant comes from indigenous mining operations, mainly as a by-product of coal mining.

Extend network

The national transmission grid covers 27,000 km of South Africa, and there has been a massive drive through the Integrated National Electrification Program (INEP) since 1994 to increase the extent of the population with access to electricity from 36% to approximately 71% in 2004, in order to address the imbalance of electricity supply due to apartheid. As of 2009, total population access to electricity had risen to 75%. High-voltage transmission in the country occurs at 765 kV, 400 kV, and 132 kV.

The country's mass electrification program, started in 1991, has seen almost 3.5 million homes electrified. The government aims to achieve universal access to electricity by 2012.

Capacity concerns

ESKOM is suffering from capacity generation problems due to demand outstripping supply in 2007 and 2008. The supply/demand gap in early 2008 rose to 4,000 MW, threatening to collapse the majority of the country’s electricity network. Unplanned outages due to equipment failure, as well as a dwindling reserve margin due to robust economic expansion, which has not been mirrored in power sector development, have been blamed for the crisis. As a result, ESKOM introduced “load shedding”, or scheduled black outs that try to preserve the grid when demand is too high.

The power supply crisis has accelerated the need to diversify the country’s energy mix and its move towards alternative energy sources such as nuclear power and natural gas, as well as various forms of renewable energy. Generation infrastructure improvements have included the de-mothballing of 3,800 MW of coal-fired generation capacity, as well as the proposed construction of two 4,800 MW coal plants, proposed in 2008 to be completed by 2013. 22% of new generation capacity developments by 2030 are to come from nuclear power, according to the Integrated Electricity Resource Plan of 2010, revised 2011.

Transmission and distribution losses stood at approximately 8.8% in 2008, equating to 22,465 GWh.

Renewable energy

South Africa has a high level of renewable energy potential and, presently has in place targets of 10,000 GWh of renewable energy by 2013.

Solar energy
Solar energy has the potential to provide 14% of the country’s electricity supply by 2050, with solar thermal being able to contribute approximately 43 TWh by 2030. South Africa has a good solar resources; direct normal irradiance averages over 7.0 kWh/m2/day in many areas of the country, particularly in areas with close access to the electricity grid, such as in the Northern Cape. Total available potential is estimated at 548 GW.

Wind Energy
Wind energy potential is estimated to have between ‘modest’ to ‘abundant’ prospects. Average wind speeds at 10 metres range from 4-5 m/s for the majority of the coastal areas of the country, increasing to approximately 8 m/s in some mountainous regions. Several wind projects have already been initiated in the country, including the 3.2 MW ESKOM demonstration plant at Klipheuwel, and a 5.2 MW plant at Darlipp, commissioned in 2008. Tenders also exist for a further 200 MW of wind capacity near Lutzville, but funding problems have delayed construction of this project. Across the country, an estimated total potential of 14.6 GW exists.

Hydropower
The total unexploited hydropower resource in South Africa is estimated to be 13,560 MW, including an estimated 7,000 MW of pumped storage capacity, recently deemed to be feasible by ESKOM. South Africa has an average rainfall of 500mm, which is low by world standards. This, combined with the seasonal flow of the country’s rivers and frequent droughts or floods, limits opportunities for hydropower. The majority of the country’s hydropower resource is concentrated in 6,000 – 8,000 sites in the eastern regions. [9]

Biomass Energy
In the longer term, around 9 to 16% of the total energy demand could be met by biomass. Biogas has the potential to contribute 7.2 to 10.8 TWh to electricity generation by 2040. The biomass resource across the majority of the country could provide up to 50 GJ/ha/year, with some areas having the potential to produce up to 500 GJ/ha/year. Potential energy sources include agricultural residues such as bagasse and cuttings from forestry operations, as well as dedicated energy crops (Jatropha, switch grass, triticale etc.). Household biogas digesters also have a large potential market share, and two landfill gas projects have recently been commissioned near Durban.

Geothermal Energy
Geological conditions in South Africa generally preclude any large-scale geothermal resource discoveries, but with the recent energy crisis, new resources are becoming economically feasible. South Africa is far removed from active plate boundaries and heat flows to the surface predominantly by conduction. Thermal gradients vary from as low as 8 °C/km to as much as 40 °C/km. It is estimated that with drilling depths of 4,000 – 6,000 metres, 50 MW geothermal plants are an economically feasible option for development in the country.

Wave energy
Wave energy has the potential to contribute 33 TWh per year by 2050, in conjunction with other, less-used renewable energy resources. Mean average annual wave energy is estimated to be in the region of 35 – 40 kW/m, indicating a good potential for the exploitation of wave energy along South Africa’s coastline. ESKOM is also currently conducting measurements as to the feasibility of exploiting the Agulhas ocean current.

Energy efficiency

In January 2008, the Department of Minerals and Energy and Eskom released a new policy document, called the "National Response to South Africa's Electricity Shortage". The plan includes work on the country's electricity distribution structure, and the fast-tracking of electricity projects by independent power producers. It also involves electricity co-generation projects between ESKOM and private industry, where the heat generated as a by-product of industrial processes, in sectors such as chemical processing, is captured to produce power. This can be used by the industries themselves or bought by ESKOM for the national grid.

At the same time, the new plan outlines the importance of reducing demand by pricing electricity correctly as well as promoting energy efficiency and deterring, and if necessary outlawing, energy inefficiency. The government is also set to introduce a rationing scheme that will reward and penalise customers based on their energy usage.

ESKOM aims to reduce demand by about 3,000 megawatts by 2012 and a further 5,000 megawatts by 2025, through an aggressive campaign which will include promoting the use of solar-powered geysers for household hot-water needs, as well as liquid petroleum gas for cooking.

The industrial sector contributes most to energy consumption in South Africa, providing 34.9% of demand in 2008. The residential and transport sectors also contribute significantly, 25.5% and 24.7% respectively in 2008. The industrial sector is also the largest consumer of electricity in the country, with 117,744 GWh of consumption in 2008, or 58.4% of the total domestic supply.

Ownership

Electricity market
Although ESKOM (http://www.eskom.co.za/) does not have exclusive generation rights in South Africa, it does have the practical monopoly on the bulk of electricity in the country, and it maintains the national grid.

In 2002, ESKOM was converted into a public company, although it is de facto a parastatal. In 2003, the Cabinet made a decision to increase private-sector participation in the electricity industry by dividing power generation between ESKOM and independent power producers, or IPPs, although ESKOM still has the majority of the generation rights. Currently, ESKOM generated approximately 95% of the electricity consumed in South Africa.

Distribution activities were unbundled from ESKOM in 2003, and the creation of Regional Electricity Distributors (REDs) was begun, under the newly-formed Electricity Distribution Industry Holding Company (EDIH). In 2010, after a number of issues relating to backlogs and poor performance, Cabinet decided to terminate the electricity distribution industry restructuring and to discontinue the process of creating REDs with immediate effect. Although the EDIH had made significant progress in establishing the REDs, Cabinet approved the recommendation that the Department of Energy takes over the programmes previously executed under the EDIH mandate. Full transfer of responsibility occurred on the 1st of March, 2011.

The REDs buy electricity from ESKOM at a tariff set by the National Energy Regulator of South Africa (NERSA) and aim to offer electricity at a competitive price, with efficient service.

Liquid Fuels and Gas Market
The Petroleum, Oil and Gas Corporation of South Africa (PetroSA, http://www.petrosa.co.za/) is the state-owned national oil and gas company, and has the monopoly on the oil, fuels and natural gas sectors; although the private South African fuels and chemicals company, SASOL (http://www.sasol.com/), also operates Gas-to-Liquid facilities. SASOL has the monopoly on the Coal-to-Liquid sector in South Africa.

Competition

The electricity sector in South Africa is essentially totally vertically integrated, due to the continued existence of ESKOM’s monopoly of approximately 95% of the market. ESKOM is involved in practically every area of the electricity sector, from generation to transmission and retail. In July 2002, ESKOM was converted into a public, limited liability company, wholly owned by government.

Currently, distribution continues to be handled by the 175 re-distributing municipalities that were left after the restructuring efforts of the EDIH. The Department of Energy is investigating further methods of reform to effectively restructure the distribution sector.

SASOL can be considered to be vertically integrated, while PetroSA is not, as it does not have a retail presence.

Energy framework

A number of policy documents have been produced governing energy development, including:

White Paper on the Energy Policy of the Republic of South Africa, 1998, that describes the government’s general policy for the supply and consumption of energy until, approximately, the year 2010. This policy sets out the path for development of renewable energy and improvement of energy efficiency with the ultimate goal of reaching a more sustainable energy mix, in order to achieve South Africa’s macro-economic goals. A successor to this policy was released in September 2009, and aims to overhaul the fiscal, legislative and regulatory regimes in the energy sector, to further promote renewable energy development, and reduce carbon emissions.
White Paper on Renewable Energy, 2003, that lays the foundation for the widespread implementation of renewable energy and sets a target (currently not mandatory, only a policy objective) of ten thousand (10,000) gigawatt-hours of renewable energy contribution to final energy demand by 2013.
Energy Efficiency Strategy of the Republic of South Africa, 2005 (reviewed 2008), that sets out a national target (currently not mandatory, only a policy objective) for energy efficiency improvement of 12% by 2015 and provides for a number of “enabling instruments”.
Biofuels Industrial Strategy of the Republic of South Africa, 2007, that proposes the adoption of a 5 year pilot program to achieve a 2% penetration level of biofuels in the national liquid fuel supply. It further proposes the utilization of certain crops for the production of biofuels, and excludes others on the grounds of food security. It recommends the use of a fuel levy exemption for biodiesel and bioethanol.
National Cleaner Production Strategy, 2004, that seeks to “enable SA society and industry to develop its long term full potential by... adopting the principles of Cleaner Production... and promoting the practices of sustainable consumption.”
The 2009 Energy Act focused on ensuring that diverse energy resources are available, in sustainable quantities and at affordable prices in support of economic growth and poverty alleviation. It further provides for energy planning, increased generation and consumption of renewable energies, contingency energy supply, and a variety of other measures to promote energy development.

Other pieces of legislation include:

Integrated Energy Plan (2003).
Mineral and Petroleum Resources Development Act (2002).
Electricity Act (1987).
Gas Act (2001).
Gas Regulator Levies (2002).
National Energy Regulator Act (2004).
Conservation Act (1989).
National Environmental Management Act (1998).
Water Act (1998).

There are also several programmes promoting sustainable energy, such as:

Urban Sustainable Energy for Environment & Development Programme (SEED), focussing on energy efficiency.
Renewable Energy Market Transformation Programme (REMT), run by the Department of Energy, focussing on removing the barriers and reducing the implementation costs of renewable energy technologies and promoting on-grid electricity for renewable energy sources.
The Renewable Energy Feed in Tariff programme (REFIT), run by the National Energy Regulator of South Africa, focuses on remunerating independent power producers for renewable power they feed into the national grid.

The REFIT programme was first introduced in 2009, and provided a set of tariffs for renewably-generated electricity. This aimed to create an enabling environment for further renewable energy developments and to support the government targets of 10,000 GWh of renewable electricity in the national grid by 2013. Tariffs were introduced for wind, small hydro, concentrated solar power and parabolic trough systems, and landfill gas. The National Energy Regulator of South Africa reviewed and reduced the rates for Feed in Tariffs in March 2011, in order to bring them inline with falling technology costs and fluctuations in the exchange rate.

In 2011 The Department of Energy released the first round of renewable energy bids (REBIDs) for independent power providers. In December, the 28 preferred bidders in the state’s independent power producer procurement programme were announced and the second round of bidding closed in March 2012. The first 1,451MW allocated out of a total 3,725MW were divided across wind, solar photovoltaic and concentrated solar power. By June 19 the first-round bidders will be expected to complete financial closure on their projects and begin construction in order to be operational by 2013.

Energy debates

State energy company Eskom has embarked on a massive program to upgrade and expand the country's electricity infrastructure.

Eskom plans to double its total generating capacity to 80,000 MW over the next two decades, with nuclear power making up about half of the new capacity. The state supplier is considering bids from France's Areva and the US's Westinghouse Electric to build a new conventional nuclear power plant that could start generating electricity from 2016, and has said that it could build more nuclear stations by 2025.

Renewable energy has been receiving much attention both from the Government and from the media. Despite this, no new legislation or policy has been created to give effect to the White Paper on Renewable Energy of 2003, except for the publication of the REFIT Guidelines in March 2009.

The development of a biofuel industry is still to be debated, due to concerns around food and water security; this is despite the fact that the Biofuels Industrial Strategy of the Republic of South Africa (released in 2007) calls for maize to be excluded due to its status as a staple food source.

Energy studies

Major networks include:

The Sustainable Energy Society of Southern Africa (SESSA, http://www.sessa.org.za) a non profit organization dedicated to renewable energy and energy efficiency.
AfriWEA (http://www.afriwea.org) promotes and supports wind energy development on the African continent by facilitating the exchange of information, expertise and experience in the wind energy sector.
Sustainable Energy Africa (http://www.sustainable.org.za/)
Energy Research Centre, University of Cape Town (http://www.erc.uct.ac.za)

South Africa is also a key player in the Southern African Power Pool (SAPP, http://www.sapp.co.zw/), which was created with the primary aim of providing reliable and economical electricity, to supply to the consumers of each of the SAPP members, consistent with reasonable utilisation of natural resources and environmental impact.

Beyond the White Papers on Energy Policy and Renewable Energy, these studies are also relevant:

The National Biofuels Feasibility Study, 2006.
“Renewable Energy in emerging markets and developing countries: Current situation, market Potential and recommendations for a win-win for EU industry, the Environment and Socio-economic development” (RECIPE) Country Report on South Africa, 2006 (http://www.energyrecipes.org)
The Department of Energy, Integrated Resource Plan 2010 (http://www.energy.gov.za/files/irp_frame.html)
Sustainable Energy and Climate Change Project (SECCP), Carried out by Earthlife Africa (http://www.earthlife.org.za/?page_id=14)

Role of government

The Department of Minerals and Energy was split in 2009 into the Department of Energy (http://www.energy.gov.za) and the Department of Mineral Resources (http://www.dmr.gov.za/). The Electricity and Nuclear branch of the Department of Energy is responsible for electricity and nuclear-energy affairs, while the Hydrocarbons and Energy Planning branch is responsible for coal, gas, liquid fuels, energy efficiency, renewable energy and energy planning, including the energy database.

Government agencies

The Central Energy Fund Group (CEF (Pty) Ltd.) are involved in the search for appropriate energy solutions to meet the future energy needs of South Africa, the Southern African Development Community and the sub-Saharan African region. This includes gas, electrical power, solar energy, low-smoke fuels, biomass, wind and renewable energy sources. Subsidiaries of the CEF Group include PetroSA, and the National Energy Efficiency Agency (NEEA). NEEA was created in 2006 as a wholly-incorporated division within the CEF Group, responsible for the implementation of demand side management and energy efficiency projects in the country; the management of strategies for improving efficiency; awareness-raising campaigns and training programs in energy efficiency and co-operation with all agencies involved in the sector to ensure best practice.

The Energy Development Corporation (EDC) was established in January 2004 as a division of CEF, and supports the development of renewable energy and alternative fuels through investment. The corporation targets market sectors where there is insufficient private sector activity as well as where the government, for strategic reasons, believes state investment is required. The EDC is also involved in sectors where renewable energy and energy efficiency require catalysing and developing.

The South African National Energy Research Institute (SANERI), a wholly-owned subsidiary of the Central Energy Fund (Pty) Ltd, is the public entity tasked with coordination and undertaking of public interest energy research, development and demonstration. It is under the joint custodianship of the Department of Energy and the Department of Trade and Industry.

Energy procedure

The National Energy Bill (2008) has been published. This bill gives legislative effect to the Energy White Paper on Renewable Energy approved during 2004.

In 2010, the Department of Energy published the national Integrated Resource Plan (IRP) for the electricity sector, as a subset of the Integrated Energy Plan. It seeks to consider alternatives to large-scale capital-intensive supply facilities for the future development of the South African energy sector. The IRP’s purpose is the identification of investments in the electricity sector which will allow the country to meet the forecasted demand with the minimum cost to the country. Various options are explored within the IRP, including further developments to the country’s nuclear capacity, import options for electricity from neighbouring countries, and the potential for distributed/off-grid generation as a solution for rural electrification.

Energy regulator

The National Energy Regulator of South Africa, established in 2004, is responsible for regulating the electricity, natural gas and petroleum industries.

The Nuclear Sector is regulated by the National Nuclear Regulator (NNR, http://www.nnr.co.za/), established by the National Nuclear Regulator Act 47 of 1999.

Degree of independence

NERSA consists of four full-time and five part-time members appointed by the Minister of Minerals and Energy (including the Chairperson).

The Regulator is funded by funds set aside by Parliament, levies imposed by or under separate legislation, funds collected under separate legislation, charges for dispute resolution and other services rendered in terms of the National Energy Regulator Act, as well as a licence fee.

Regulatory framework

In 2009, NERSA approved the Renewable Energy Feed-In Tariff (REFIT) to achieve Government’s target of producing 10 TWh of electricity per year by 2013, and sustain growth beyond this target.

The tariff for wind energy, 1.25 ZAR/kWh ($0.14 USD/kWh) is greater than that offered in Germany (€0.092/kWh) and more than that proposed in Ontario, Canada ($0.135 CAD/kWh).

The tariff for concentrating solar, 2.10 ZAR/kWh ($0.27 USD/kWh), is less than that in Spain (€0.278/kWh), but offers great promise in the bright sunlight of South Africa. NERSA's revised program followed extensive public consultation. Reductions to the feed-in tariff were made with the 2011 review.

Regulatory roles

Functions of the NERSA include issuing licences, setting and approving tariffs and charges, mediating disputes, gathering information pertaining to gas and petroleum pipelines, and promoting the optimal use of gas resources.

Energy regulation role

The Department of Energy is the primary government institutions responsible for energy regulation. No other government department takes an active role in the energy sector.

Regulatory barriers

Possible barriers include the fact that the target set by the White Paper on Renewable Energy is too low to stimulate investment, while there are too few fiscal incentives for energy efficiency and renewable energy. The cheap electricity available in South Africa is a further barrier to the implementation of more expensive renewable energy technology. There is also a need for clearer direction from national government on the future of renewable energy and energy efficiency, in terms of legislation and regulations, as well as greater co-operation between the government departments and the private sector.

It is hoped that the recently-introduced IRP(2010) will enable the improved development of renewable energy and energy efficiency in the country. The lack of non-discriminatory open access to infrastructure, such as the national electricity grid, is also impeding the development of independent power producer installations, including for renewables, as delays in grid connections can be seen as a disincentive to new developments.

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Key Statistic Charts (18)

Energy production and use

Energy production	Energy use

Source: Worldbank Data	Source: Worldbank Data

Electricity

Electricity production	Electric power consumption

Source: Worldbank Data	Source: Worldbank Data
Electricity - total net installed capacity of electric power plants, public & self-producer

Source: UN Data
Electricity - total net installed capacity of electric power plants, thermal	Electricity - total thermal production

Source: UN Data	Source: UN Data
Electricity - total net installed capacity of electric power plants, nuclear	Electricity - total nuclear production

Source: UN Data	Source: UN Data
Electricity - total net installed capacity of electric power plants, solar	Electricity - total solar production

Source: UN Data	Source: UN Data
Electricity - total net installed capacity of electric power plants, wind	Electricity - total wind production

Source: UN Data	Source: UN Data
Electricity - total net installed capacity of electric power plants, hydro	Electricity - total hydro production

Source: UN Data	Source: UN Data
Electric power transmission and distribution losses

Source: Worldbank Data

Emissions

Carbon dioxide emissions (CO2) (CDIAC)	Carbon dioxide emissions (CO2) per capita (CDIAC)

Source: UN Data	Source: UN Data

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Project Outputs (13)

Source: REEEP Toolkits

Renewable Energy

Energy Efficiency

Financial Models

Renewable Energy & Energy Efficiency

Policy & Regulation

Business & Finance

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CapitalPretoria
ISO CodeZA, ZAF
Area1.221.037 km²
Population49.991.300 (2010)
GDP, PPP528.422.829.477,- current international $ (2010)

Events

10.07.2012
Smart Cities Summit 2012
14.11.2012
Southern African Energy Efficiency Convention - 2012SAEEC

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