New Analysis Unveils How SA Can Support Commercial & Industrial Actors Pursuing Cost-Effective, Sustainable, Reliable Energy

Simplify licensing requirements, stimulate the technical capabilities of municipalities to properly assess generation applications, carefully plan tariffs, propose innovative funding models, clarify and focus regulations on technical compliance to ensure the quality of systems. These recommendations stem from the most recent RES4Africa study Commercial and Industrial Renewable Energy Market for South Africa, developed in synergy with CSIR and presented on 28th July 2021, on occasion of the fifth edition of the AM-Powering Connexions talks. The report provides a detailed analysis of the status of the commercial and industrial (C&I) renewable energy (RE) market in South Africa, while contributing to the discussion on the untapped opportunities presented by this specific market segment. It also considers the challenges to facilitate investments in the field, which has the potential to accelerate the energy transition and contribute to ensuring the availability of reliable and sustainable electricity to small, medium, and large enterprises. The analysis benefits from a comparison with other relevant case studies, such as Chile, Spain and Vietnam.

The South African C&I market is a growing one, and closely related to the renewable energy sector: it accounts for two-thirds of global electricity consumption and it produces nearly 23% of the CO2 energy-related emissions. There has been a global cost decline, in the decade 2010-2019, of approximately 82% and 40% in solar PV and onshore wind respectively, with renewable generation installations expected to grow by 10% until 2025. However, as RES4Africa’s study points out, a full and energy-based development of the C&I market is still hindered by barriers in the South African regulatory framework, such as insufficient norms or complex and not always clear requirements that C&I actors must comply with, in order to connect their generation facilities to the distribution networks. Further obstacles are represented by scarcity of adequate planning and calibration of energy tariffs, as well as by taxation burdens.

Final recommendations outlined by RES4Africa’s study consist in having open negotiation of network charges, clear and flexible Power Purchasing Agreements, direct and effective REs regulations, and increased tax exemption thresholds for companies willing to undertake generation and self-consumption projects.

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