Professor Andrew Phiri of the Department of Economics have published opinion pieces in:
The Conversation on 12 February 2025 Sustainable economic growth in South Africa will come from renewables, not coal: what our model shows
and also in The Herald (South Africa) on 14 Feb 2025 - see below:
To move away from coal and to meet its commitment to reaching net zero emissions by 2050, SA needs to dramatically increase production of renewable energy.
New research looks at the relationship between renewable and non-renewable energy consumption and GDP growth in SA to find out which energy source is most compatible with economic development.
Past studies have looked into the role of energy in SA’s economic growth, but their methods have provided only limited information about whether SA can make a smooth transition from dirty to clean energy.
To get a deeper understanding, we used an analytical tool called “continuous complex wavelets” to see how renewable and non-renewable energy influences growth over time.
Our model shows that an increased supply and higher consumption of non-renewable energy causes long-term economic growth over 10-15 year cycles.
Renewables, at best, have short-term growth effects over six months to one year.
After 2000, there was a sharp increase of almost 25% in the use of renewable energy throughout the decade.
According to our model, this sharp increase was enough to have an impact on economic growth over the short term but not over the long term.
This is because SA energy regulators have not adopted strong enough measures for renewable energy to enable longterm growth.
They have not funded the mass rollout of renewable energy or connected renewables to the national grid.
We found that renewables can only sustain growth over six to 12-month cycles, whereas policymakers work towards longer cycles such as the 2030 and 2050 sustainable development goals.
In 2003, the government started taking climate change seriously with the release of the White Paper on Renewable Energy.
The government started intentionally trying to increase the use of renewable energy while decreasing the use of dirty energy, such as coal.
Renewable energy saw its biggest surge after the 2010 launch of the renewable energy independent power producer procurement programme.
This opened competitive bidding for renewable energy providers to supply electricity to the grid.
The transition to renewable energy had begun.
But coal-fired power, while declining, remained the main source of electricity.
In 2019, carbon taxes were formally introduced.
This resulted in a further slowdown in consumption of non-renewable energy.
The Covid-19 pandemic in 2020 and 2021 coincided with severe power cuts (load-shedding).
These two events combined caused a general slowdown in non-renewable and renewable energy use, and in economic growth.
At this point, the drop in coal consumption was dragging down the economy.
This, in turn, reduced society’s income, as measured by the gross national product.
And because incomes were constrained, fewer private households purchased renewable energy systems.
People didn’t spend on solar panels.
Our research suggests that relying on non-renewable energy, such as coal, won’t lead to long-term growth for SA.
This is because non-renewables are not a reliable source of energy, as shown by loadshedding.
The research further suggests that renewable energy policies, subsidies and programmes made some positive short-term impacts on economic growth, measured as GDP.
Overall our findings highlight that policymakers have treated renewables as a “niceto-have” gesture for humanity, instead of a driver of long-term economic growth.
This has led to weak policies, poor regulation and underinvestment in renewable energy.
These have held the sector back from making a bigger contribution to economic growth.
For example, the government has not taken renewables seriously enough to include them in the power grid.
This has largely limited the use of renewable energy to private homes and businesses.
Coal-fired electricity from the country’s power utility, Eskom, is still cheaper for households than leaving the grid and purchasing their own renewable energy infrastructure (solar energy systems).
The government has not funded the infrastructure needed to unlock SA’s vast renewable energy potential.
The planet is at a critical state with global warming.
The government should urgently set up policies and actions to overcome the barriers to using renewable energy.
Only then will renewable energy have a permanent, positive influence on economic growth.
SA has huge potential in renewables such as solar, wind and biomass, thanks to its diverse geography.
Yet, when people think about moving away from coal, they worry about job losses in the coal industry.
But historically, energy transitions have never been instant. African countries that embraced the change early on reaped the benefits.
They became more industrialised and prosperous.
The SA government must act now if it wants to use renewable energy to drive future economic growth and stay ahead in the global shift to clean energy.
Climate change affects us deeply.
But it also presents a chance for Africa to leap ahead technologically.