Low-Carbon Electricity Transition

This policy brief by the Institute for Economic Justice (IEJ) outlines a strategy for South Africa's transition from a coal-dependent electricity system to a low-carbon model. It emphasizes the need for a 'just transition' to protect vulnerable workers, the urgent need to reform Eskom's business model, and the potential for localizing the manufacturing of renewable energy components to drive economic growth.

• South Africa's electricity generation is heavily reliant on coal, which accounts for nearly 90% of the primary feedstock. This dependence makes the country a high global carbon emitter and creates risks for industries due to carbon intensity and negative health and environmental externalities, such as air pollution and high water consumption.
• The Renewable Energy Independent Power Producer Procurement Programme (REI4P) has successfully attracted private investment and initiated the energy transition. Bids 3.5 and 4 confirmed 27 new independent power producers, primarily in the North West, Eastern Cape, and Northern Cape provinces, with an estimated 58,000 jobs to be created. However, the programme has not yet maximized sustainable socio-economic development, localisation of manufacturing, or long-term employment beyond the construction phase.
• Eskom is facing a severe financial and operational crisis characterized by high debt, demand stagnation, excess supply, and the high capital costs of the Medupi and Kusile coal plant projects. This crisis leads to rising electricity prices that negatively impact households, municipal finances, and the broader economy, potentially driving affluent users toward private generation.
• There is significant potential to localize the manufacturing of renewable energy components in South Africa. For the 27 projects in the latest REI4P round, an estimated 1,500 jobs could be created through the local production of components such as solar photovoltaic modules (approx. 2.8 million), inverters (600), transformers (385), and wind towers and turbines (approx. 500).
• The document proposes several concrete policy interventions: cancelling further coal IPPs, reforming Eskom's business model to allow it to invest in renewable energy at scale, enabling municipalities to plan and procure their own electricity systems, and finalizing the Integrated Resource Plan (IRP) 2016 to provide certainty on power production.
• A 'just transition' requires the establishment of a Just Transition Taskforce driven by the Presidency and housed in NEDLAC. This process should involve social partners and unions to support coal miners and retrenched Eskom employees through measures such as re-skilling, social protection floors, and community-based livelihood programmes.

APA

Naudé, L., & Rivett-Carnac, K. (2018). Low-Carbon Electricity Transition. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-2c-Low-Carbon-Electricity-Transition.pdf

Chicago

Naudé, Louise, and Kate Rivett-Carnac. Low-Carbon Electricity Transition. Institute for Economic Justice, 2018. https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-2c-Low-Carbon-Electricity-Transition.pdf.

Wikipedia

{{cite report |last1=Naudé |first1=Louise |last2=Rivett-Carnac |first2=Kate |title=Low-Carbon Electricity Transition |publisher=Institute for Economic Justice |date=August 2018 |url=https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-2c-Low-Carbon-Electricity-Transition.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{naud2018lowcarbon, author = {Naudé, Louise and Rivett-Carnac, Kate}, title = {{Low-Carbon Electricity Transition}}, institution = {Institute for Economic Justice}, year = {2018}, month = aug, url = {https://iej.org.za/wp-content/uploads/2020/07/Stream-1-Policy-Brief-2c-Low-Carbon-Electricity-Transition.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }