SA’s green energy shift: Progress, pitfalls, and the road ahead

Key topics:$11.8B pledged to help South Africa transition from coalMpumalanga coal region targeted for new green industriesPolicy reforms aim to boost renewable energy and jobs .Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Nqobile Xaba*Just over 74% of South Africa’s electricity still comes from burning coal. In 2021, the country negotiated the Just Energy Transition Partnership with Germany, the UK, France, the US and the European Union. They committed to providing South Africa with US$8.5 billion (R157 billion) to move away from coal to renewable energy. (In March 2025, US president Donald Trump withdrew the US and its share of the funding, about US$1.5 billion, or R27.7 billion, from the arrangement.) Researcher Nqobile Xaba talks to The Conversation Africa about how the partnership is going.What has the partnership done so far?After its launch in 2021, the Just Energy Transition Partnership attracted additional pledges from the Netherlands, Denmark, Canada, Spain and Switzerland. The total amount pledged is now US$11.8 billion (R218 billion).Though the US has pulled out, the other partners remain committed to fulfilling the funding they’ve promised. In fact, financing has begun to flow in.South Africa has come up with a Just Energy Transition Implementation Plan that sets out what is needed and how much it will cost to achieve a low carbon economy. The plan also sets out what is needed to build South Africa’s ability to cope with global warming. It also proposes ways to create quality jobs, set up a stable energy supply, and boost economic growth.To date, US$583 million (R10.8 billion) has been allocated to just energy transition projects. A publicly available register is keeping track of how money is spent.South Africa is investing the funds in six focus areas: the electricity sector; green hydrogen; new energy vehicles; skills development; a just transition away from coal in Mpumalanga; and municipal capacity.The initial funds have been used to pay for:studies into the technical, economic, environmental and social aspects of decommissioning coal-fired power plantsbuilding infrastructure, such as upgrading and expanding electricity transmission infrastructure to enable large-scale grid uptake of renewable energytraining municipalities to begin planning local level renewable energy projectscommunity development and meetings.The plan is focused on parts of South Africa that are currently almost entirely dependent on coal mining. For example, money has been allocated to projects that will support new forms of industry in Mpumalanga, a province where 12 collieries are based. This recognises that people and businesses in coal regions are vulnerable. They’ll bear the brunt of the transition.Read more:. FT: A cautionary tale from South Africa’s ‘just energy transition’.What has worked well?Progress has been made in policy and regulatory reforms to support the energy transition.For example, the South African government is reforming the energy sector through the energy action plan, the country’s national energy security roadmap. The reforms include allowing the private sector to generate electricity without a licence. They also include approving a new renewable energy masterplan that aims to set up green industries and jobs in renewable energy system production.These policy reforms have been designed to attract investments into large scale renewable energy development.In climate policy, the Climate Change Act was passed in July 2024. It aims to make sure that climate change is incorporated in all government strategies and plans. This will enable different government departments to have one co-ordinated response to combating climate change.What are some of the apparent challenges?First, transitioning to renewable energy needs to be accompanied by economic diversification. This simply means that sectors that support the economy, like agriculture, manufacturing and the services industry, need to be involved in the transition.Second, South Africa has three huge socio-economic challenges: poverty, inequality and unemployment. There is therefore a need to make sure the energy transition creates decent work for people.Third, social protection for the most vulnerable people must be widened. South Africa has a well established social protection system. But it needs to be strengthened with measures like a universal basic income grant. This would support people who might lose their jobs in the energy transition.Fourth, South Africa’s energy insecurity is a major challenge. The country’s coal fleet is not performing at its full capacity and can’t meet the energy needs for the country. Intermittent power cuts have resulted. The renewable energy industry is still being developed. It cannot address this energy shortfall right now, since only about 8.8% of installed capacity comes from renewables (wind, solar photovoltaic panels and concentrated solar power). To minimise the power cuts, three coal plants that were scheduled to close by 2027 are now going to stay open until 2030. This delays the transition away from coal-fired power.Fifth, state capacity needs attention. For example, ministerial oversight – who is responsible for what – needs to be clarified. Frameworks are needed that will set out how the transition is managed, monitored and evaluated.Finally, collaboration is important. When rolling out renewable energy projects, the roles of all the social partners (community, labour, government, women and business) need to be made clear and explicit.What still needs to be done?A people centred approach needs to be adopted. This means involving all citizens and making sure solutions are found in which all people’s livelihoods are conserved.A just energy transition should not simply be a shift to a low carbon energy system and economy. Rather, it must foster green industrial development, while prioritising the well-being of all South Africa’s citizens, especially society’s most impoverished communities, which bear no material responsibility for the problem.The implementation of the just energy transition needs strong local government (municipalities). They have to be able to carry out the transition to renewable energy because in South Africa, they are the custodians of service delivery. But ageing electricity and water systems that malfunction regularly and a lack of money to fix them will need to be resolved. The implementation of a just energy transition that leaves no one behind won’t be able to happen without this..*Nqobile Xaba - Research associate, University of Johannesburg.This article was first published by the TheConversation and is republished with permission

SA’s green energy shift: Progress, pitfalls, and the road ahead

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