How should policy support energy transition in a post-Covid Africa?

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According to Silvia Piana, head of regulatory affairs, Africa region, global power generation division, Enel, who was part of a panel discussion at the Africa Utility Week virtual conference, investors are looking for three main aspects.

The first one is the openness, which includes the existence of a master plan, renewable energy targets and how realistic these targets are, and the unbundling of the system.

“Very often, unbundling is confused with privatisation. This has nothing to do with privatisation, privatisation comes after unbundling. Unbundling is just to separate the generation, transmission and distribution in to separate balance sheets to have cost reflective prices,” she said.

The second aspect is the attractiveness of the regulatory framework. Here we are talking of free competition among the players, Piano said.

Third is the readiness of the route to market from generators to consumers. This, she explained refers to tenders , direct commercial agreements between generators and industrial consumers and the big one – grids. Policy should, therefore, include plans for grid development in the short term and in the long term.

Capital that serves investment

Maloba Tshehla, head of strategy and growth, ED Platform, said the government is really there to set the rules.

“If we look at things like the Global Initiative Reporting standards, theres are things that came about and guide how capital and investments are directed responsibly to specific outcomes. If we look at the carbon disclosure type project that has driven people to start reporting on their carbon footprint, investors have been able then to take a decision whether to invest or not, considering the carbon emissions of their potential investments.

“In a similar way, I see government policy as a way to start capital to move in a way that serves development. If we think about renewable energy in South Africa, we’ve seen how it can be done. The main thing is there doesn’t have to be a disconnect between government intentions and policy, developmental objectives and infrastructure, and capital and returns and all those good things investment should be.

“So, for me it’s a matter of we have an opportunity to meet a developmental need. Government is there to create a framework in which investors can play and the economy - the people - can participate justly, equitably and obviously realise good returns,” he said.

Flattening the curve of climate change

Abe Cambridge, founder of The Sun Exchange, said: “If people are concerned about flattening the curve of Covid-19, we need to acknowledge the impacts of human life lost due to the ecosystem collapse due to climate change. Right now we need to flatten the curve of climate change.”

What he considers important is to streamline small-scale energy generation regulations , which are easy changes for government to make, and can be incorporated into the smart city ethos. “We need to acknowledge that people can be both prosumer s and consumers and take advantage of that and not hinder it. Rather than job creation being centralised in the coal fields of Mpumalanga, if you go the solar route you are creating job across the whole of South Africa.

“Using something like blockchain technology, rather than lengthy drawn out regulations, is real time really fast and peer to peer. That way you can really accelerate that transition to sustainable energy,” he said.