Client: National Economic Development and Labour Council (Nedlac)

Funder: Nedlac Trade and Industry Chamber

Duration: 2014

Summary

Energy, and electricity issues in particular, have been high on the South African agenda since the 2008 crisis, which saw the country’s national power utility Eskom implement rolling load shedding and cut supplies to a number of large customers, such as mines and minerals beneficiation plants. As South Africa experienced in 2014 the most stringent power cuts since 2008, reviewing the current electricity planning process is both a timely and necessary exercise. This review, based on an internationally-recognised framework, unpacks the key pillars of the Integrated Resource Plan (IRP) and reviews South Africa’s performance, with the objective of shedding light on the role and the implications of planning on the country’s electricity supply and pricing. It is the first attempt at applying this international framework to the South African context.

The 10 elements covered are: 1) planning process; 2) plan objectives; 3)  review of previous plans; 4) demand forecast methodology; 5) resource options assessment; 6) policy instruments to achieve objectives; 7) regulatory and institutional frameworks; 8) investment financing; 9) social and environmental considerations; and 10) promotion of innovation and anticipation of emerging challenges. 

Repositioning electricity planning at the core:  An evaluation of South Africa’s Integrated Resource Plan

Project name: Regulatory Entities Capacity Building: Review of Regulators Orientation and Performance

Client: Centre for Competition, Regulation and Economic Development, University of Johannesburg

Funder: Economic Development Department

Duration: 2013 - March 2014

Summary

Effective performance by economic regulators is important for growth and development. In recognition of the importance of their role, the Centre for Competition, Regulation and Economic Development, University of Johannesburg has commissioned the Centre for Competition, Regulation and Economic Development to undertake a research and capacity building project for economic regulators in South Africa. The Regulatory Entities Capacity Building Project involves a review of the performance of the economic regulators as well as identifying the constraints impacting their performance. The University of Johannesburg aims to use the information from the reviews to create customised training course in regulatory economics for both employees of the economic regulators in South Africa and for students.

TIPS conducted three sector reviews for the project, including the electricity sector and the renewable enery sector.

The emphasis of these reviews was on understanding the issues at a practical level, looking at how the regulator has been able to address the challenges it has faced, and how it can be assisted to improve, including from learning from other regulators.

Review of Regulation in the Electricity Supply Industry

Review of Regulation in Renewable Energy

PUBLISHED ARTICLE

South Africa’s Renewable Energy Independent Power Producer (REIPP) procurement programme is hailed worldwide as a model for renewable energy procurement. Its success is far from experimental and haphazard and points directly to lessons acquired prior to, and during, the launch and running of the programme. This article explores the journey of the REIPP procurement programme and draws critical lessons from the process. It discusses the success of the REIPP procurement programme in developing the renewable energy sector in South Africa, drawing seven key lessons that explain this success and exploring the remaining challenges. The article shows that, despite the need for further improvements and continual optimisation, the development of the REIPP procurement programme has been a positive illustration of successful policy and regulatory learning processes.

Lessons from South Africa's Renewable Energy Regulatory and Procurement Experience

Funder: Global Green Growth Institute (GGGI)

Duration: 2013-2014

Summary

This research project was jointly commissioned by the EDD and the dti. The GGGI was tasked with implementing the project as part of a partnership to support the South African government’s green growth planning efforts. TIPS was the primary research partner and service provider. This project is the result of the collaboration of all of these institutions. The South African government’s Inter-departmental Green Growth Committee, chaired by EDD, served as the project steering committee for this research. A multi-stakeholder Technical Reference Group was also established to offer inputs on various drafts of the report.

Although not directly associated with the transition to a green growth path, recent trends in South Africa’s electricity supply industry, which has been characterised by energy supply problems since a load shedding crisis in 2008 and drastic price increases (i.e. a trebling of the average electricity price from 2009/2010 to 2017/2018), provide an opportunity to investigate the shift to a greener path. Using these developments as an entry point, this paper investigates the impact of electricity price increases on the competitiveness of mining-related companies and the mitigation measures implemented by various firms in the four most important mining value chains in South Africa, namely platinum, gold, iron ore and coal. Particular attention was paid to the role that electricity price increases and energy security concerns have played in fostering investments by mining-related firms in renewable energy and energy efficiency. It represents a condensed version of an earlier report, which was the result of extensive fieldwork and interviews with stakeholders across the selected mining value chains.

For any enquiries related to the report that are relevant to the dti and EDD, please contact Christian Prins, Economist (macro economic policy), EDD, at cprins@economic.gov.za.

The impact of electricity price increases on the competitiveness of selected mining sector and smelting value chains in South Africa

Official project name: Co-ordination and facilitation of the Economic Regulators Conference

Client: National Energy Regulator of South Africa

Funder: National Energy Regulator of South Africa

Duration: August 2011 - August 2012

Summary

TIPS was appointed in 2011/2012 to facilitate and co-ordinate the organisation of the first South African Economic Regulators Conference (SAERC) which took place on 21-22 August 2012 on behalf of the National Energy Regulator of South Africa (NERSA).

In addition to all logistical requirements, TIPS managed the call for papers and was responsible for the selection and quality control of the conference papers. The conference explored the following question: How can South Africa’s economic regulators contribute to cost-effective delivery of essential infrastructure in the face of key financial, social and environmental imperatives?

The conference, which focused on the regulation of economic infrastructure in the context of high administered price inflation, growing private sector participation and increased threat of climate change, was attended by 200 participants from the region over two days with more than 30 research papers being presented.

To access the programme and papers go to www.nersa.org.za/SAERC

Official project name: Alternative Energy Generation for South Africa

Client: Employment Promotion Programme Phase Two (EPP P2), Development Policy Research Unit (DPRU) at the University of Cape Town 

Funder: Employment Promotion Programme Phase Two (EPP P2), Development Policy Research Unit (DPRU) at the University of Cape Town 

Duration: 26.04.2010 - 26.07.2010

Summary

TIPS, in collaboration with PDG Consulting, carried out a research project in 2010 on alternative energy generation for the Development Policy Research Unit (DPRU) at the University of Cape Town. The project, which formed part of the Employment Promotion Programme Phase Two (EPP P2), included three components.

First, TIPS and PDG produced three input reports covering the following topics: alternative energy sources for South Africa and action plans to address barriers to implementation; alternative electricity generation strategies in developing countries; and policy for alternative energy generation in South Africa.

Second, a workshop aimed at assessing low-carbon electricity generation options for South Africa was hosted in June 2010 to discuss the research findings with relevant government, business and civil society stakeholders.

Third, a research and capacity building agenda for alternative energy generation in South Africa was developed based on the input papers and workshop discussions.

Photo: CommunityLED

Official project name: Financing Needs and Preconditions for the South African Renewables Initiative (SARi)

Client: KfW Entwicklungsbank

Funder: KfW Entwicklungsbank

Duration: 30 August 2010 - 1 December 2010

Summary

In 2010, the KfW Entwicklungsbank commissioned a study to determine the feasibility of, and preconditions for, the South African Renewables Initiative (SARi) during the stage of its conceptualisation. Special attention was paid to the role that the German government could play as an international funder of SARi and the implications of this support for the German government, German businesses, and international climate change negotiations.

The project highlighted the scope, development and implementation efforts of SARi, with a particular focus on the possible avenues through which a collaborative role could be played by donor institutions and countries in the implementation of SARi. TIPS conducted the study in collaboration with the Ecologic Institute, a private not-for-profit thinktank for applied environmental research, policy analysis and consultancy, and IMBEWU Sustainability Legal Specialists (Pty) Ltd, to provide German and South African perspectives and knowledge. 

Photo: Nelson Mandela Bay Municipality