Risks and barriers in renewable energy development in South Africa through Independent Power Production

Abstract

The South African energy supply is highly centralised and largely coal-fired. A transition to renewable energy sources is essential if the country is to adapt to the environmental, social, and economic challenges of climate change. Together with private-sector partners, the South African Government has embarked on a Renewable Energy Independent Power Production programme. However, the volume of private investment in renewable energy generation is still low. This article investigates the major risks and barriers to renewable energy market development. Political risk, human capacity, and corruption, are identified as the most serious and likely risks, as well as the barriers stakeholders perceive in the deployment of renewable energy sources, including governance gaps. The identified risks present obstacles to optimum market development for renewable energy and the attraction of sustainable private investment. The findings suggest that policy should focus more on managing the interface between private and the public partners, through increased consensus building, greater transparency, enhanced stakeholder management, more effective administration and improved decision-making.