Climate Commission releases recommendations on energy transition investment plan

Monday, May 15, 2023

The Presidential Climate Commission (PCC) has released two reports on South Africa’s Just Energy Transition Investment Plan (JET IP) following extensive stakeholder engagements within the first three months of this year with communities, labour, civil society, faith-based groups, business and other groups.

The first report expresses stakeholder perspectives on the plan, with the second being an appraisal of the JET IP, with the PCC’s recommendations thereof.

The JET IP was released last year and sets out government’s plans for South Africa’s priorities of investment as the country transitions towards a low carbon economy.

Executive Director of the PCC, Dr Crispian Olver, explained that during consultations, skills development came into sharp focus from participants.

“Stakeholders across the board consider the just transition issues to be inadequately prioritised within the plan. On the positive side, what the plan does do… is to talk very explicitly to a range of just transition interventions in skills development, in economic diversification, and mine rehabilitation.

“But the view almost across the board is that greater focus should be placed on these areas, and the skills development side, in particular, came in for a lot of criticism. It’s partly because… if you look at the total skills development system, there’s a lot of funding available through the skills development levy and various funding flows to the Sector Education and Training Authorities (SETAs), Higher Education and Technical Vocational Education and Training (TVET) colleges but that’s not captured within the plan.

“We make a number of recommendations around how to enhance those sectors and it’s important because people are going to critique this plan from the perspective of the Just Transition and whether it lives up to all the requirements that must be factored in,” he said.

Olver said another critical aspect to the JET IP is the expansion and upgrading of the electricity grid.

“Grid capacity is a major constraint to scaling up the energy transition and that is the view across the board. Government, business, labour, civil society all back a strong focus on upgrading and expanding the grid.

“We note the Eskom transmission development plan, which talks about 8 500km of transmission lines needed by 2031. We fully support that and what we want to say is that in addition to government’s reforms, and moves to set up the State-owned transmission company, the JET IP needs to clearly indicate how this grid expansion is going to be financed,” Olver said.

Renewable energy

On renewable energy and the current crisis facing South Africa, Olver said the country needs to focus on ramping up renewable energy projects and getting those onto the grid quickly, while also focusing on other sources of energy, including battery storage and gas.

“In light of the current energy crisis, the focus is to get as much public and private investment in renewables and battery storage onto the grid. We fully support the measures that have been taken to scale up imbedded generation. There is a huge exponential rise now in investment taking place in renewable energy – that’s a positive trajectory.

“We reckon that you need to be doing renewables at about 6 to 8GW per annum – a significant increase from where we’re at. But we’re starting to see that kind of scale of rollout now,” he said.

Financing for the JET

Turning to the financing of the JET IP, Olver said that the current grants allocated to South Africa – totalling some $8.5 billion – will not be enough to fund the JET.

“Everyone is united in considering these to be inadequate. But our recommendation is not to hold up implementation while we try and argue for more grants. We must… bank what we’ve got, move forward with implementation and continue to fight for more.

“We also note that the JET IP needs to be closely integrated into government’s overall fiscal policy and we make the recommendation that National Treasury needs to undertake fiscal review, integrate the JET IP into the Medium Term Expenditure Framework (MTEF) and more broadly, in fact, we’d like to see the whole Just Transition integrated into the MTEF,” he said.

For more information on both reports, go to: -