ENERGY
Australia: Regulatory football hampers project timelines The energy transition in Australia has been negatively impacted by inconsistent long-term government policy. Ongoing shifts in political direction and the lack of a stable, established emissions framework have subdued investment appetite. New generation projects have therefore been slow to come online, resulting in price volatility and supply consistency issues.
For South Africa, this underscores the importance of robust consensus on energy policy. The Integrated Resource Plan and other key frameworks must be treated as long-term blueprints, not political footballs, to inspire trust in the system and energy security.
South Africa’ s removal of the licensing cap for private generation is already unlocking a wave of private investment, with over 100 projects in the pipeline.
Green flags: Optimistic drivers for SA Despite the challenges faced in other markets, the global experience also provides a blueprint for success. Positive outcomes from other countries offer key insights into the levers that can be pulled to navigate successfully towards an open energy market.
Nordics: The power of integration The Nordic countries’ success in terms of energy transition is built on a strong foundation of cross-border grid integration. The Nord Pool market allows power to flow freely between countries, providing a vast balancing area, reducing reliance on local supply, and inherently diversifying supply.
As a member of the Southern African Power Pool, South Africa can leverage this model. By strengthening its regional interconnections and embracing transparent trading, it can improve energy security and provide a larger, more attractive market for investors. It also has the opportunity to spearhead and support the energy transition for the entire Southern African region.
Brazil and Australia: The rise of bilateral markets Brazil’ s dual-market model and Australia’ s open market have shown the power of private-to-private transactions. These approaches enable large industrial and commercial customers to bypass the traditional utility and sign direct PPAs with private generators. This provides a clear, bankable business case for new generation, independent of government procurement.
South Africa’ s removal of the licensing cap for private generation is already unlocking a wave of private investment, with over 100 projects in the pipeline. This is a strong indicator that the market is moving towards a more efficient, customer-focused model. Notwithstanding this, grid capacity must urgently be addressed to realise the value of these projects. Without an effective transmission system, increased production is nullified.
Japan: The catalyst of the crisis The opening of Japan’ s energy markets, which were muted for decades, was fast-tracked by the Fukushima disaster – a Level 7 nuclear crisis on the International Nuclear and Radiological Event Scale. The crisis created an undeniable and urgent mandate for change.
Similarly, South Africa’ s ongoing energy crisis has ignited the political and social will for reform. The urgency enabled the unbundling of Eskom and the rapid introduction of new legislation such as the Electricity Regulation Amendment Act.“ Crisis as a catalyst” is a powerful driver for change and can overcome long-standing barriers.
A“ perfect storm” of policy promulgation and modernisation What is unique about South Africa’ s energy transition is that we are not just modernising our grid; we are also liberalising the market at the same time. With new policies driving competition and cuttingedge technologies coming online, we have the opportunity to learn from global markets and build a more efficient and equitable energy future for South Africa. �
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