a benchmarking paper on the role of infrastructure in
TRANSCRIPT
A Benchmarking Paper on the Role of
Infrastructure in Economic Development and
Promoting an Inclusive Low-carbon Future in
South Africa
TIPS Annual Forum
June 2017
1
Infrastructure and Economic Development
• Infrastructure development supports economic development.
• Infrastructure underlies and supports the operations of the
economy and networks people, products, services, and
innovations in an increasingly connected world.
• Infrastructure narrows the time and spatial barriers within and
among countries and thus helps to spur economic activity and
dynamic enterprise activity.
• Infrastructure, as an enabler of social and economic activity,
possesses important feedback mechanisms for transforming
the interlinkages between business, people, and connectivity.
Inputs, human capital, modes of transport, communication, etc.
Costs, prices, social reproduction, mobility of people, things, and ideas.
2
Infrastructure and Inclusive Development
• Infrastructure development supports social cohesion, and
inclusion, by supporting access to dignified living standards
and access to economic opportunities.
• Pubic infrastructure development helps level the playing field
between different groups in society and thus supports access
to information, human capital development, innovation, the
entrepreneurial decision, start-up activity, market entry, and
competition.
• Green infrastructure supports social and mental wellbeing in
the built environment and thus includes people in their right to
safe and clean surroundings. It also creates new opportunities.
• But, a dynamic transition to low-carbon economy must ensure
social justice and a common future that is socially cohesive.
3
Infrastructure and a Low-Carbon Future • Infrastructure underlies every aspect of the modern economy
and consequently green infrastructure has knock-on benefits
through its linkages with the rest of the economy, including,
manufacturing, transport, and public services etc.
• Electricity is a key input in the modern world for almost every
economic transaction and activity, which means the supply of
renewable energy is crucial to the sustainability of all other
sectors.
• The transition to a low-carbon future must be preceded by a
dynamic move toward renewable energy sources for electricity
production and not a mere augmentation of supply.
• Securing an ample supply of renewable energy is also key to
social justice and providing opportunities for participation in
social, political, and economic life moving forward.
4
Caveats and Considerations • Comparison of electricity infrastructure, electricity
losses, and renewable energy in Germany, Japan, and
South Africa.
• Granted, comparison with Germany and Japan might
seem a bit unfair because they are further ahead in
terms of social and economic development.
• Regardless, the point the comparison is to see where
we are in relation to some of the best examples in the
world of the renewable energy transition.
• Although the results seem like South Africa is not
doing so well, it is commendable that the country has
made the progress it has given its other priorities.
5
Electricity & Heat CO2 Emissions Compared:
Germany, Japan, and South Africa
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0
10
20
30
40
50
60
70
80
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CO
2 E
mis
sio
ns
fro
m T
ota
l E
lect
rici
ty a
nd
He
at
Pro
du
ctio
n (
% o
f T
ota
l
Fu
el
Co
mb
ust
ion
)
Germany Japan South Africa
Electricity Basket Compared: Germany
7
0
50000
100000
150000
200000
250000
300000
350000
Coal Oil Gas BioFuels Waste Nuclear Hydro Geothermal Solar PV Solar
Thermal
Wind Tide Other
Sources
GW
h
2010 2011 2012 2013 2014
Electricity Basket Compared: Japan
8
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
Coal Oil Gas BioFuels Waste Nuclear Hydro Geothermal Solar PV Solar
Thermal
Wind Tide Other
Sources
GW
h
2010 2011 2012 2013 2014
Electricity Basket Compared: South Africa
9
0
50000
100000
150000
200000
250000
300000
Coal Oil Gas BioFuels Waste Nuclear Hydro Geothermal Solar PV Solar
Thermal
Wind Tide Other
Sources
GW
h
2010 2011 2012 2013 2014
Renewable Electricity Output in Germany,
Japan, and South Africa
10
0
5
10
15
20
25
30
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Re
ne
wa
ble
Ele
ctri
city
Ou
tpu
t (%
of
To
tal
Ele
ctri
city
Ou
tpu
t)
Germany Japan South Africa
Electricity Losses in Germany, Japan, and South
Africa
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0
2
4
6
8
10
12
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71
19
72
19
73
19
74
19
75
19
76
19
77
19
78
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79
19
80
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01
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04
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07
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14
Ele
ctri
c P
ow
er
Tra
nsm
issi
on
an
d D
istr
ibu
tio
n L
oss
es
(% o
f T
ota
l
Ou
tpu
t)
Germany Japan South Africa
Electricity Consumption (GWh) in Germany,
Japan, and South Africa
12
0
50000
100000
150000
200000
250000
300000
350000
400000
Ind
ust
ry
Tra
nsp
ort
Re
sid
en
tia
l
Co
mm
erc
ial a
nd
Pu
bli
c S
erv
ice
s
Ind
ust
ry
Tra
nsp
ort
Re
sid
en
tia
l
Co
mm
erc
ial a
nd
Pu
bli
c S
erv
ice
s
Ag
ricu
ltu
re /
Fo
rest
ry
Fis
hin
g
Oth
er
No
n-S
pe
cifi
ed
Ind
ust
ry
Tra
nsp
ort
Re
sid
en
tia
l
Co
mm
erc
ial a
nd
Pu
bli
c S
erv
ice
s
Ag
ricu
ltu
re /
Fo
rest
ry
Oth
er
No
n-S
pe
cifi
ed
Germany Japan South Africa
Ele
ctri
city
Use
by
So
cie
tal
De
pa
rtm
en
t in
GW
h
2010 2011 2012 2013 2014
Electricity Consumption (% of Total) in
Germany, Japan, and South Africa
13
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Ind
ust
ry
Tra
nsp
ort
Re
sid
en
tia
l
Co
mm
erc
ial a
nd
Pu
bli
c S
erv
ice
s
Ind
ust
ry
Tra
nsp
ort
Re
sid
en
tia
l
Co
mm
erc
ial a
nd
Pu
bli
c S
erv
ice
s
Ag
ricu
ltu
re /
Fo
rest
ry
Fis
hin
g
Oth
er
No
n-S
pe
cifi
ed
Ind
ust
ry
Tra
nsp
ort
Re
sid
en
tia
l
Co
mm
erc
ial a
nd
Pu
bli
c S
erv
ice
s
Ag
ricu
ltu
re /
Fo
rest
ry
Oth
er
No
n-S
pe
cifi
ed
Germany Japan South Africa
Ele
ctri
city
Use
by
So
cie
tal
De
pa
rtm
en
t (%
of
To
tal
Co
nsu
mp
tio
n)
2010 2011 2012 2013 2014
Development Finance on Renewable Energy
Compared
14
0
1
2
3
4
5
6
7
8
9
10
2011 2012 2013 2014 2015
Bil
lio
ns
US
D
Germany South Africa
Development Finance on Renewable Energy
Compared as % of National GDP
15
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
2011 2012 2013 2014 2015
De
velo
pm
en
t F
ina
nce
by
KfW
an
d I
DC
as
% o
f N
ati
on
al G
DP
Germany South Africa
Government Finance on Renewable Energy
Compared
16
0
50
100
150
200
250
300
350
2014 2015 2016 2017
Mil
lio
n U
SD
Germany South Africa
Government Finance on Renewable Energy
Compared as % of National GDP
17
0.0000%
0.0010%
0.0020%
0.0030%
0.0040%
0.0050%
0.0060%
0.0070%
0.0080%
0.0090%
2014 2015
Go
vern
me
nt
Sp
en
din
g o
n R
en
ew
ab
le E
ne
rgy
(%
of
Na
tio
na
l G
DP
)
Germany South Africa
South African Government Spending on
Renewable Energy as % of National GDP
18
0.0000%
0.0005%
0.0010%
0.0015%
0.0020%
0.0025%
0.0030%
0.0035%
0.0040%
0.0045%
2010 2011 2012 2013 2014 2015
Bu
dg
eta
ry A
llo
cati
on
on
Re
ne
wa
ble
En
erg
y a
s %
of
Na
tio
na
l G
DP
Other Sources of South African Financing and
Renewable Energy Policy
• The New Growth Path and the National Development Plan prioritise renewable
energy and aim to get 20,000 MWh from renewable energy sources.
• The South African Green Fund with budget of 1.1 billion ZAR has spent 204 million
ZAR on renewable energy.
• Department of Energy initiatives on electricity efficiency and renewable energy.
Su -Programme 2.4: Electricity, Energy Efficiency and Environmental Policy
Su -Programme 6.1: Energy Efficiency
Su -Programme 6.2: Renewable Energy
Combined Spend: 10.5 million ZAR (2015)
• The Renewable Energy Independent Power Producer Public Procurement (REIPPPP)
programme.
6 376 MWh of electricity procured from 102 renewable energy IPPs in six rounds of bidding.
28 484 job years
256.2 million ZAR in socio-economic development contributions
80.5 million ZAR in enterprise development contributions
30% Black South African Shareholding for the first three bidding rounds.
19
Findings
• South Africa has higher levels of CO2 emissions from electricity than
Germany and Japan and produces less electricity.
• South Afri a’s ele tri ity provision basket is skewed toward coal, whereas
Germany and Japan have a more balanced reliance of varied sources.
• I effi ie ies i South Afri a’s tra s issio a d distri utio syste are causing double the energy losses compared to Germany and Japan.
• South African electricity from renewable energy sources is still small and
signs of lock-in are evident from the reliance on coal.
• South Africa Development and Government financing compared to
Germany is significantly less, but growing.
• Nevertheless, South African policy is making progress creating a supportive
environment and promoting private buy-in.
20
Debates/Recommendations
• State-led/public utility based transitioning versus private buy-
in approach.
• Vertically integrated versus decentralised with off-grid, mini-
grid, and industry power self sufficiency initiatives.
• Multi-dimensional approach with greater government support,
public utility component, private investment, on-grid and off-
grid projects, and power self-sufficiency for appropriate
industries (i.e. industries with backward linkages to agriculture
and available bio-matter waste and by-products for generation
heat and or decomposition related electricity).
21
Thank You!
22
Trade & Industrial Policy Strategies
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