Faced with acute electricity shortages, South Africa has been seeking to lessen its dependence on inefficient coal-fired power stations through an expansion of renewable energy sources – but concerns over the pace and extent of the politically-sensitive transition remain.
While certain policy challenges to investment in green power are being addressed, some investors worry about the government’s long-term commitment to reform. There is significant resistance within the cabinet and the ruling ANC to any substantive reduction in the dominant role of coal (and by extension the coal-mining industry) in the electricity-generation mix. Some 80 percent of the country’s power is still produced from coal.
However, South Africa has been bedevilled by chronic shortages of electricity for years. Ageing and poorly managed coal-fired power stations have struggled to keep up with demand. That has led to power rationing (so-called load shedding), with blackouts for up to 12 hours a day – frustrating citizens and businesses alike. The interruption to daily life slows commerce and discourages investment.
Read the full article on African Business.