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Country Profile: South Africa

Flag South Africa Back in 1990, South Africa was classed as a developing country and is thus listed in the Kyoto Protocol as a Non-Annex I state that has not adopted greenhouse gas reduction targets. However, with annual emissions of 418 million t CO2e, South Africa ranks in nineteenth place in the list of greenhouse gas emitters and has become a prosperous industrialised state – especially where its major cities are concerned. As Africa’s largest economy, South Africa will play a key role in future commitment periods. The South African government is clearly in favour of multilateralism and at an informal meeting of leading industrialised nations and emerging economies in February 2007, announced its intention to join in international efforts to combat climate change.

Nonetheless, coal is the country’s most important energy source and is supposed to remain so for at least the next 20 years. South Africa’s coal resources are estimated to make up 5.6 percent of those worldwide and provide 95 percent of its domestic electricity supply. The share of renewables lies at around 10 percent of primary energy use despite the country’s considerable renewable energy potential. The low share of renewables-generated electricity results from the fact that coal-fired electricity is extremely cheap. In the eyes of the government, low electricity prices are important not only when competing for foreign direct investment, they also support measures towards poverty alleviation.

High economic growth has led to greater annual demand for electricity than government estimates originally forecast. Rising demand and the out-dated, centralised electricity grid with output capacities of up to 4,500 MW lead to supply shortages which frequently disrupt electricity supply. Securing electricity supply and overcoming the threat of supply shortages at peak times is thus a key component of South Africa’s energy policy. Apart from huge investment in new power stations, great importance is placed on measures to improve energy efficiency and exploit savings potential on the demand side in order to cope with dwindling power station reserves. In its White Paper on Renewable Energy 2003, the government announced its aim to increase the current share of renewables (3,300 GWh) by 10,000 GWH or four percent of estimated electricity use by 2013.

After getting off to a slow start, South Africa’s CDM market has developed its own momentum. Acting as the Designated National Authority (DNA), the Department of Minerals and Energy (DME) reports 48 project activities. PDDs have already been submitted for 18 of the projects involved. In the DEG CDM Investment Climate Index, South Africa ranks sixth in the world, attaining an overall ‘good’ regarding conditions for CDM projects in the country. A key hurdle in implementing CDM projects in South Africa involves the environmental impact assessments (EIAs) required for certain project types. In some provinces, delays can occur because the competent authorities lack the capacity needed to evaluate EIAs. Where CDM project developers fulfil only a few of the country’s sustainability criteria or stand to generate large numbers of emission reduction certificates, the DNA can require them to invest a portion of the revenue received from the project in additional measures to promote sustainable development.

The South Africa-based NGO SouthSouthNorth has considerable expertise in developing CDM projects, especially in South Africa. Its Kuyasa low cost housing upgrade project in Cape Town has been highly acclaimed around the world on account of its highly successful approach to linking poverty alleviation with emission reductions.