Browsing by Author "Valenti, Devan"
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- ItemDiversifying South Africa's renewable energy mix through policy(Stellenbosch : Stellenbosch University, 2015-04) Valenti, Devan; Brent, Alan C.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Public Leadership.ENGLISH ABSTRACT: South Africa is one of the most energy-intensive economies in the world, with around 90 per cent of its electricity generated using coal as a primary resource. As such, the South African energy system remains on a highly unsustainable path, and the potential for long-term growth and prosperity of the economy is thwarted. The alternative to conventional energy, renewable energy, has unfortunately been relatively slow to take off in the South Africa market. This is disappointing considering the country’s wealth of natural resources required for renewable energy generation. The potential of renewable energy to contribute to the South African energy mix is thus significant. The transition to a green economy, and subsequently a more sustainable energy future, is therefore achievable and realistic. However, national policies aimed at promoting the deployment of renewable energy have been thwarted by inconsistencies, lack of coordination, and proved relatively ineffective at increasing the country’s renewable energy capacity to its full potential. The recent policy changes from a feed-in tariff to a competitive tender approach dented investor confidence in the South African renewable energy industry significantly. Nevertheless, renewable energy policy in South Africa is still in its infancy, and valuable lessons are still to be learnt and incorporated into future policies going forward. A critical analysis of the current policy identifies the need for amendment to the structure of the policy landscape. The current policy strongly favours larger, more established and mature renewable technologies, whilst completely neglecting smaller and less mature ones. This not only results in a highly undiversified renewable energy mix, which has considerable negatives in itself, but also reduces the ability of the policy to capture a host of significant opportunities and advantages associated with small-scale renewable energy projects. The importance of diversifying South Africa’s renewable energy mix was therefore ones of the principal stances of this study, and intervention that ensured diversification within the industry was therefore vital. This study fundamentally designs and proposes a revised policy system that makes use of both competitive tenders and feed-in tariffs within the policy framework. In essence, this would allow for greater diversification within the renewable energy industry. The competitive tender component should be used for larger, more established technologies and projects, while the feed-in tariff should be used to drastically stimulate investment in smaller technologies and projects. By making use of a dual-mechanism system, the benefits associated with small-scale renewable energy projects can be realized without any noteworthy opportunity costs foregone. These benefits include diversification of the renewable energy mix; stimulation of smaller technologies; increased job creation; and stabilisation of supply volatility. This study recommends that the current renewable energy policy in South Africa be reassessed for both its relevancy within the South African context as well as its ability to effectively promote the deployment of alternative energy technologies. In an ever-changing and globalising world, where exogenous influences on national policies are stronger than ever, it becomes necessary and of utmost importance that policies are evaluated constantly in order to ensure their effectiveness is at optimal level.