South Africa’s ANC party, expected to win elections this month, is promising a new energy strategy to tackle power shortages and cut greenhouse gases that account for more than two-fifths of the continent’s emissions.
A key pillar of this plan is the likely split of the minerals and energy cabinet portfolio, to remove red tape that critics say is bogging down the ministry’s performance, Reuters reports.
The new integrated energy policy is meant to meet growing demand for gas, oil and electricity in the continent’s biggest economy, while also addressing global warming concerns.
“South Africa is one of the least energy-efficient nations in the world and the least efficient in Africa,” minerals and energy minister Buyelwa Sonjica said last week.
Sonjica says a new energy strategy is expected to be put in place by September. She has said she expects her portfolio to be split in two if the ruling African National Congress wins the April 22 vote, but declined to say whether she is in line to head either of the new ministries.
Such a split would underline the ANC’s commitment to tackling the energy crunch, said analysts.
“That will be a big shake-up if it happens,” said Tristen Taylor, energy policy officer at regional think-tank Earthlife.
A split of the ministry will also try to ensure state-owned utility Eskom, which has been rationing electricity since early last year, won’t face a repeat of the near-collapse of the grid that in January last year forced mines to shut for days.
The closures cost the economy billions of dollars, dented South Africa’s investor-friendly image and raised questions about whether the ministry can be effectively managed under one roof.
A new and separate energy ministry would also take on the immediate challenge to drive Eskom’s R385 billion ($42.81 billion) new five-year power expansion plan, by helping it raise funds in the face of the global financial crisis.
Taylor said the energy ministry would also have to open the door to private power firms and give them a bigger say in helping to fill the country’s power supply gap.
The ANC plans to enforce an emissions cap in South Africa, which has already set a target to cap emissions by 2020-25 and to reduce them by mid-century — a big step in a country that depends on coal for 90% of its electricity needs.
Moves to diversify to cleaner energy sources have so far stalled due to a lack of policy and incentives for investors.
Analysts were pleasantly surprised last month when South Africa’s power regulator set generous renewable energy tariffs to offer incentives to producers, which were hailed as a breakthrough in efforts to diversify its long-term power supply.
The nation plans to generate 15% of its electricity from renewable sources by 2020.
As a net importer of oil, South Africa will have to act to secure its fuel supplies, a key challenge for the new ministry.
“There is a need for an integrated energy plan which ensures that we pick up on oil, gas and electricity, and which also includes an agenda around sustainability,” said James Arnott, a senior energy consultant at global consultancy Accenture.
Already a better coordination has emerged between the players in the energy sector, some of who are competitors in the coal supply chain, and has been applauded by many who say the country has come a long way since the power crisis last year.
The new leadership will also have to decide how fast South Africa should venture into biofuels. Critics say the government has neglected this sector, sending out mixed signals.
“There is frustration and inherent contradictions … the government is talking about promoting biofuels, but supplies no policy, no incentives, no market for that,” said Andrew Makenete, president of the Southern African Biofuels Association.