Abstract:
Motivated by the need for transition toward cleaner and sustainable energy
sources, this study delves into the relationship between institutional quality
and South Africa’s renewable energy adoption. The objective is to examine
how institutional factors influence the share of renewable energy in the
country, recognizing that energy transition hinges not only on socioeconomic and technological determinants but also on political economy and
institutional variables. This paper proxies institutional quality by the
Corruption Perception Index (CPI), Regulatory Quality (REGQUAL), and
Government Efficiency (GOV_EFF), on South Africa’s renewable energy
share. We find that perceived institutional cleanliness, as measured by
a higher CPI, positively affects the share of renewables. This can be attributed
to the public’s growing association of corruption with government activities
and fossil fuel-based electricity generation. Additionally, improved REGQUAL
fosters a healthier energy market but paradoxically results in a lower share of
renewable energy in the short term. While contributing to stability, government effectiveness can hinder renewables’ growth due to established industry interests and short-term priorities. The implications of these findings
underscore the complex interplay of political and institutional dynamics in
shaping South Africa’s energy landscape. This research highlights the need
for integrated policies addressing environmental and socioeconomic
objectives.
