South Africa's energy transition is expected to create up to 250,000 new jobs over the next 25 years

GWEC, the global wind energy commission, recently released a report that if South Africa shifts from coal-fired energy to clean energy, it is expected to create an additional 250,000 jobs and more than $10 billion in total value added over the next 25 years
.

The country says it wants to achieve net-zero emissions by 2050, with 22.
5% of its energy mix coming from wind energy by 2030, up from 5%
in 2021.
To achieve these goals, a rapid expansion of renewable energy capacity will be necessary
.

"South Africa, whose energy system is heavily dependent on coal and accounts for around 5% of global greenhouse gas emissions, has struggled to maintain a stable energy supply and has experienced power outages and frequent load shedding," said GWEC
.
”

Outlook forecast

According to statistics from the Department of Mineral Resources and Energy, wind energy is now a very affordable energy
source in South Africa.
In the renewable energy independent power producer procurement scheme bidding window, one of the wind projects is priced at just 34c/kWh, which is well below the coal input cost
of South Africa's national electricity company Eskom.
The average cost of a wind power project in South Africa is 49c/kWh
.

Under the conventional scenario, South Africa would create 130,000 direct and indirect jobs
through wind energy between 2022 and 2026 during the development, construction and installation phases.

In addition, 14,000 direct and indirect jobs are created annually in operation and maintenance and continue throughout
the life cycle of the wind farm.

"However, in South Africa's green recovery scenario for increased renewable energy investment, wind energy in South Africa is expected to create 180,000 direct and indirect jobs
during the development, construction and installation phases between 2022 and 2026.
In addition, 22,000 long-term direct and indirect jobs
will be created in operation and maintenance.
In a green recovery scenario, 250,000 new jobs
could be created.
”

Developmental disorders

"One of the main obstacles to accelerating wind energy development in South Africa is the lack of development of a power transmission network," GWEC said
.
For example, the Northern Cape, which currently has the best wind resources in the country, has the least developed transmission network
.
The development of wind power projects in these areas has been hampered by a lack of transmission capacity, while state-owned power company Eskom has been slow
to improve infrastructure in these areas.

In addition, GWEC noted that South Africa's National Energy Regulator (Nersa) is seen as a passive rather than a proactive agency and lacks forward-looking strategy and technical expertise
.
"More technical knowledge, especially of the country's transmission system, is needed to help address the transmission system issues outlined earlier," GWEC advised
.

The lack of predictability and continuity in tenders makes supply chain investments more uncertain.

"There have been multiple delays in signing PPAs for winning projects, resulting in a lack of predictability that has led to a slowdown
in investment in the wind sector.
Removing uncertainty in procurement by introducing binding offtake contracts will help attract investment," GWEC emphasized
.
In addition, there are many regulatory and administrative barriers
to independent power producers' entry into the energy market.