Johannesburg- South Africa ranked 113th out of 114 countries in the Effective Energy Transitions Index 2018, a report by the World Economic Forum which considers the ability of countries to balance energy security and access with environmental sustainability and affordability.
“South Africa faces an uphill challenge in ensuring a secure, sustainable, reliable and affordable energy future for industry and society. The country's energy challenges are marked by under-capacity, under-investment, and inefficiency," the WEF’s energy team said in a statement on Wednesday.
The Energy Transitions Index found that South Africa currently meets more than 90% of its electricity demand through coal, which results in high per capita emission levels.
“There is immediate need to further diversify the fuel mix, and to create a positive environment for more investment to meet the energy infrastructure demands”, the WEF advised.
The report comes in the same week that the Department of Energy agreed to suspend the long awaited signing of the renewable energy agreement between Eskom and Independent Power Producers (IPP’s) and wait instead for an outcome to the court challenge by the National Union of Metalworkers (Numsa) and Transform SA on March 27.
On Tuesday, Fin24 reported that Deputy Minister of Energy Thembisile Majola told members of Parliament that Cabinet is considering changes to the Integrated Resource Plan (IRP) which was approved in December and sets out the country’s long term energy vision.
Renewable energy woes
The WEF’s Energy Transition Index found relatively difficult conditions for the renewable energy industry with South Africa scoring 35% for policy stability in the energy sector and ranking 54% for rule of law, under the "doing business" indicator.
Investment in energy efficiency, as a percentage of total investment in energy, is a mere 11% and South Africa scored 0 for flexibility in its electricity system. The only country which scored lower than South Africa was Zimbabwe which came in at 114 on the index.
Globally, the index found that progress toward environmental sustainability has stalled. Improvement in carbon intensity has been at 1.8% a year over the past five years, while a 3% threshold is required to achieve the Paris Agreement on climate change, to limit global warming by 2°C.
In terms of worldwide electricity affordability, household electricity prices have risen in real terms in more than half of the countries surveyed since 2013, despite an overall decrease in fuel prices.
Scandinavian and Western European nations lead the overall rankings, with Sweden, Norway and Switzerland making up the top three in terms of readiness for energy transition.
The United States ranked 25 on the index and has a dismal record on environmental sustainability, but the WEF said the world’s largest economy has a strong innovation ecosystem and robust institutional framework which push up its readiness score.
China (76) and India (78) which have also been seen as big polluters achieved "leapfrog status" as the report said they demonstrate “above average levels of readiness” with recent undertakings to improve their clean energy sectors, despite lower rankings on current performance.
““There is an urgent need to speed up the transition toward more sustainable energy production and use, including reductions in greenhouse gas emissions, greater access to energy and improvements in air quality.
“To do this we will need to harness a broad portfolio of energy technologies and deepen cooperation between governments, industry and civil society stakeholders”, said Fatih Birol, Executive Director, International Energy Agency.