Creating a JUST energy transition for embedded generation via customer empowerment in South Africa

Abstract

South Africa (SA) is the 12th largest greenhouse gas (GHG) emitter in the world. Furthermore, the country has pledged to transition away from a carbon insensitive economy within the Conference of Parties (COP) thus highlighting the need to reduce emissions. Following various policy decisions regarding large scale generation, the country is further promoting the installation of embedded generation with no need to obtain a generation licence for any size of plant. There has been a significant increasing trend of small-scale rooftop solar photovoltaic (PV) installations in the past decade due to decreasing technology costs, increasing electricity tariffs, energy security during loadshedding and climate change concerns. Other enabling factors for increasing embedded generation on distribution networks include the development of distribution markets and distribution system operators in the country are being pursued. An opportunity therefore presents itself within the JUST energy transition to create social and distributive justice for customers using these embedded generation opportunities and enablers. The theme of this paper specifically focusses on the community shares model as a customer empowerment mechanism and its impact on a JUST transition in South Africa. The community shares business model involves installation and community ownership of solar PV systems that may or may not be located away from the customers in the community who make use of the power generated. The customers can purchase rights to a segment of the PV plant and its revenues or can even purchase equity or shares from the revenue generated from the plant. The paper will provide insight into how this business model could possibly be achieved, enabling factors and barriers, technical and operational considerations, and its role in the future of the South African energy transition. Lastly, policy recommendations for interventions within this landscape will further be made.