Three critical uncertainties facing South Africa this year includes commodity prices, electric storage and exchange rates, the World Energy Council’s (WEC’s) ‘World Energy Issues Monitor 2017’ suggests.
The report states that, given the strong linkage of the South African economy to commodity prices, it was understandable that commodity prices, already identified as a critical uncertainty in last year’s issues monitor, topped the list.
“High energy prices – electricity and oil products – are incentives for consumers to become increasingly independent. A cost-effective solution to electric storage would be a game-changer for the use of wind and solar power and the viability of e-vehicles,” the reported stated.
South Africa’s electricity priorities differ from the African aggregate, owing to its position as one of the most developed countries on the continent, the report said, adding that the country was now focused on boosting its lagging economic growth, whereas many other African countries were experiencing positive growth and development, albeit from a lower base, and have a more expansive focus.
The South African exchange rate has fluctuated considerably, driven both by domestic and international events such as the UK’s Brexit vote and the US presidential elections, which significantly impacts on imported goods, particularly crude oil and imported refined fuel. “Given these uncertainties, it is not surprising to see economic growth top the list of action priorities followed by corruption and electricity prices.”
Meanwhile, the WEC report highlighted that the electricity sector would continue to face challenges across the entire continent. “Some countries have managed to strengthen their electricity infrastructure, often at the expense of increased tariffs; but most countries are still facing an electricity crisis; and overall, shortcomings in the sector continue threatening the continent’s economic and social growth and industrial competitiveness.”
However, there are exciting opportunities to address these areas.
Renewable energy remains a priority on the African agenda and is set to enjoy strong and increased roll-out this year, seeing substantial developments in countries such as South Africa, Kenya and Tanzania.