Address by President Cyril Ramaphosa at the Inaugural Just Energy Transition (JET) Municipal Conference at Gallagher Convention Centre, Johannesburg

Programme Director;
Minister of Energy and Electricity, Dr Kgosientsho Ramokgopa;
Minister of Fisheries, Forestry and the Environment, Dr Dion George;
Minister of Cooperative Governance and Traditional Affairs, Mr Velenkosini Hlabisa;
President of the South African Local Government Association, Cllr Bheke Stofile;
Mayors;
Members of the Diplomatic Corps;
Representatives of finance institutions;
Representatives of municipalities, labour, business and civil society;
Guests;
Ladies and gentlemen;

Good Morning. 

It is a great pleasure for me to be here at this inaugural conference on the role of municipalities in our country’s just energy transition. 

Rapid, sustainable and inclusive economic growth is a central priority of the Government of National Unity.

And low-carbon, climate resilient development is central to achieving this inclusive growth. 

This presents our country with a challenge, but also an opportunity.

Electricity generated from fossil fuels accounts for most of South Africa’s carbon  emissions. 

Because industry is still mainly reliant on power produced by Eskom’s coal-fired power stations, our entire economy is carbon-intensive. 

As the world changes, our reliance on fossil fuels to industrialise poses a significant risk. 

It poses threats to our economy, society and environment if we do not drive the energy transition in ways that are appropriate to national and local circumstances.   

Many of South Africa’s main trading partners are taking measures to achieve net zero within certain timeframes. 

This has implications for South African goods and products entering these markets.

It has implications for our economic competitiveness.

Just as we continue to oppose unilateral and coercive carbon adjustment measures by developed economies, we realise the need to reduce our reliance on carbon intensive energy production. We see the need to diversify our energy sources to grow our economy.

There are great prospects ahead if the country takes advantage of the global energy transition to support economic growth, development and employment creation.

As a signatory to the Paris Agreement, South Africa is committed to contributing its fair share to the global climate change effort. 

We must pursue this commitment in a manner that delivers just outcomes for those affected by the energy transition. 

We must pursue it in a way that contributes to inclusive economic growth, energy security and employment.

And we must do so at a pace, scale and cost that is consistent with the country’s social and economic development path.

Our Integrated Resource Plan sets out a viable energy mix over the medium and long term to achieve our decarbonisation objectives. 

We have a successful Renewable Energy Independent Power Producer Procurement Programme. This has attracted over R209 billion in investment and added much-needed capacity to our electricity grid. 

The regulatory changes we introduced in 2021 to increase the licensing threshold for generation projects has resulted in a pipeline of over 130 confirmed projects.

This amounts to approximately 22 500 MW of capacity with an estimated investment value of R390 billion.

Municipalities are central to our efforts to decarbonise the energy sector. 

Municipalities own and operate approximately half of South Africa’s electricity distribution grid and facilitate universal access to electricity. 

One hundred and sixty five municipalities are electricity service providers. 

Through the Integrated National Electrification Programme grant, municipalities are responsible for addressing the electrification backlog. 

Municipalities therefore need to be in the driving seat when it comes to providing clean, affordable energy to communities, businesses and industry. 

One of the aims of this conference is to unlock the institutional arrangements required to drive the decarbonisation effort. 

The Just Energy Transition Implementation Plan approved by Cabinet last year includes a dedicated municipal portfolio roadmap. 

There are three areas of focus. 

The first is providing access to affordable clean electricity. 

Municipalities are now able to purchase power directly from independent power producers and establish their own power-producing entities. 

I recently signed the Electricity Regulation Amendment Act into law. 

The Act paves the way for a new, competitive electricity market. 

The reforms contained in the law must help to speed up decarbonisation. But more than that, they must result in a better deal for households and businesses. 

The national climate change effort must not come at a higher cost for electricity users. 

South African households, like many around the world, are battling with the rising cost of living, including the cost of energy. 

We must therefore ensure that the energy transition does not contribute to energy poverty. It must not deepen inequality.

The free basic electricity subsidy for indigent households is one of the most important policies we have implemented to tackle poverty since the advent of democracy. 

It will be important to sustain and expand this support during the just energy transition and ensure that many poor households benefit from the subsidy.

We will need to deal with challenging issues like electricity pricing structures and the staggering levels of municipal debt owed to Eskom. 

The second area of focus is the issue of sustainable financing for electricity infrastructure. 

The municipal grid system needs to be upgraded, modernised and extended. 

The energy generation of the future requires systems that are fundamentally different in terms of design, capability and operation.

Smart metering will have to accommodate the increased penetration of renewable energy at different scales. It will need to facilitate wheeling and feed-in by small-scale embedded generation. 

Massive investment is needed to ensure optimal grid control, safety and energy storage. This investment will need to draw on both public and private sources of capital. 

As Government, we are working on financing solutions, including concessional loans, for the National Transmission Company of South Africa to expand the grid.  

A system for private sector investment is in development. We are expediting funding for investment-ready projects in all areas of the just energy transition. 

We are putting institutional arrangements in place. 

I am told that this conference will confirm the establishment of the JET Municipal Forum and its secretariat. 

National Government is rallying its teams to work with SALGA and mayors to align on the JET programme of action for local government. 

The third, and final, area of focus is to strengthen the capacity of municipalities to manage the transition. 

This requires extensive training and upskilling. 

New systems will be required to identify human resource, technical capacity and other needs within municipalities, and plan and budget accordingly. 

Municipalities will need to adopt best practice when it comes to the design and implementation of programmes and projects. 

Last week, I was in Ekurhuleni for a Presidential Imbizo as part of the District Development Model. 

One of the objectives of the District Development Model is localised development that is directly responsive to community needs. 

We want to move away from ‘parachuted’ development, where projects are conceptualised at national Government level and don’t take into account the realities on the ground. 

We need to be particularly aware of this when it comes to the just energy transition. 

What may work in one locality may not be feasible in another. 

Besides upgrading and expanding grid infrastructure, what other realities will need to be taken into account? 

How will this new infrastructure be protected from criminality?

We have witnessed the challenges with so-called business forums and mafias in the construction sector and, notably, in the coal sector. 

How are we going to ensure that the rollout of new energy sources at municipal level supports localisation and local businesses? 

How do we inform communities through public campaigns in accessible and appropriate languages? 

These are all issues that municipalities will have to consider and address. 

We have said that the transition to a low-carbon, climate resilient economy and society must take the needs and interests of affected communities into account. 

This isn’t simply an issue of installing panels or meters. 

We must reaffirm a just transition that incorporates distributive, restorative and procedural justice. 

We must maximise decarbonisation and just transition investments by the private sector arising from electricity sector reforms.

We must expand our electricity grid capacity.

A just energy transition is about promoting economic diversification, transformation and industrialisation in the renewable energy sector that empowers workers, marginalised communities and black businesses.

The achievement of defined just energy transition outcomes at a municipal level requires supportive policies and leadership, good governance and a coordinated effort among all relevant institutions.

In this constrained fiscal environment, we need to make the most of existing resources. 

Citizens must see that the just energy transition is working for them. 

Electricity must be affordable, available and sustainable.

Costs must be managed. Infrastructure must be maintained. Services must be delivered reliably and consistently. 

We must leverage the financing and support that has been pledged by international partners and the private sector to support municipalities. 

I look forward to the outcomes of this conference. I am certain that it will provide a clear pathway for municipalities, paved with sustainable solutions. 

I commend the Just Energy Transition Project Management Unit in the Presidency and the South African Local Government Association for convening this conference. 

As Government, business, labour and civil society, let us deepen our collaboration to achieve an energy future that is secure and sustainable for all. 

I thank you.