Winds of change driving the energy transition in the Cape

My passion for electrical engineering started in sixth grade science lessons. I understood the chapter on electricity very well. From then on, I wanted to find out more about electrical engineering, so for me it was an obvious choice of what subject to study. But even after successfully completing the trade test, I found it difficult to get a job. That’s the frustrating thing about the labour market in South Africa.

Then I decided to join an EPC skills programme supported by GIZ. EPC stands for Energy Performance Certificates. 25 applicants from the Western Cape province were selected to take part in the three-month programme. The training was very intensive. For example, we learnt how to collect relevant energy data and calculate the energy consumption of buildings. We also learnt how to carry out energy audits on buildings. I’m glad I completed the course because it’s opened a lot of doors for me. Today I work for the South African National Energy Development Institute, SANEDI, which works in the field of energy research and supports energy efficiency initiatives across the economy.

My knowledge helps me not only in my job, but also in my everyday life. When I bought my new heating system, I was able to do comparisons and use what I’d learnt in the course to calculate how many kilowatt-hours I would use. I also came away from the course with a greater awareness of my own energy consumption. Since then, I have tried to explain to my family and friends how they can also implement small energy-efficiency measures, such as switching off the lights when leaving the room and turning off water heaters when not in use.

When it comes to change, you often meet resistance. But I’m very proud to be part of the change in South Africa’s energy landscape and have a role to play.

Sinovuyo Noji
was one of the participants in a GIZ-supported training programme in the field of energy efficiency.

The African power sector is on the cusp of an energy transition: moving away from fossil fuels towards cheaper, renewable energy sources. However, this shift requires a rethink and consistent support from state and private-sector partners in the reorganisation of the electricity market. Until now, there has often been just one company generating, transmitting and distributing electricity – with all the resulting conflicts of interest and the potential for corruption stifling investments. That has also undermined financial viability. We are working to create a more dynamic, diverse electricity system. The goal is for competition to liberalise market participation, improve sector efficiencies and increase customer choice. The traditional model of a state-owned monopoly is no longer fit for purpose as it has been upended by the rapid pace of technological innovation in Distributed Energy Resources (DERS) and cheaper renewable energy sources, changes in ICT technologies, as well as growth in new financial markets and new sources of finance. To facilitate this transition, we need targeted programmes to help build capacity, tools and better-structured frameworks that will allow utilities to overcome their severe financial difficulties. My message is that international partners need to see the African energy system as a new investment target. Because it offers so much potential.

However, we face major challenges, partly because there is limited awareness of how competitive electricity markets work. At the University of Cape Town, we therefore offer courses for stakeholders in the public and private sectors, equipping them with skills and knowledge on the frontiers of international best practice in terms of regulation, investment, understanding new power market reforms and how to make utilities financially viable. We also help participants to acquire practical skills in building financial models for electricity tariffs, project financing and private power procurement. Together with GIZ, we have also developed a customised programme, the African Electricity Regulator’s Peer Review and Learning Network (PRLN), which is aimed at the CEOs of regulatory authorities in order to strengthen their leadership and managerial skills and therefore improve the credibility, transparency and robustness of regulatory decision-making. We brought together the CEOs/DGs of regulatory bodies from various African countries (Uganda, Namibia, Kenya, South Africa, Ghana and Tanzania). They spent a week analysing regulatory systems in each other’s countries. How are licences issued for new energy projects? How are tariffs designed? How does regulation influence new investments in renewable energy? We wanted the participants to exchange ideas, identify weaknesses and draw up recommendations. Ultimately, the decisions made by CEOs are also crucial to the success or failure of the energy transition.

Dr Peter Twesigye
is a senior lecturer at the University of Cape Town’s Power Futures Lab and leads research in electricity market reforms, regulation and renewable energies.