Renewable energy technologies for poverty alleviation: South Africa - biodiesel and solar water heaters

South Africa, like other transitional countries, faces the dual challenge of pursuing economic growth and environmental protection. Sustainable energy systems, based on renewable energy (RE) resources, offer the possibility of doing both. The implementation of RE technologies faces a major challenge because South Africa has large coal deposits and its electricity generated from coal is among the cheapest in the world. Currently less than 1% of the 200 000 GWh of electricity generated in the country originates from renewable sources (DME, 2003a). The Government’s White Paper on Renewable Energy Policy (2003) supports the establishment of RE technologies, targeting the provision of 10 000 GWh of electricity from renewable resources by 2013. This has the potential to create 35 000 jobs, adding R5 billion to the GDP and R687 million to the incomes of low-income households (DME, 2004). Solar water heating and biodiesel have the greatest potential to contribute to meeting the target. RE is to be utilised for both power generation and non-electric technologies such as solar water heating and biofuels. By late 2005 the DME completed a Renewable Energy Target Monitoring Framework to ensure that progress towards the 2013 target is effectively monitored (DME, 2005a). In this report, two RE technologies – solar water heaters (SWHs) and biodiesel – have been identified where renewable energy could make a significant contribution towards poverty alleviation in terms of improving the general welfare of households as well as developing productive activities to generate employment. The country has high levels of solar radiation and an established manufacturing infrastructure for SWHs. They can contribute to a reduction in greenhouse gas (GHG) emissions, and their manufacture and installation can contribute to job creation and skills development. However, the high upfront capital cost of SWHs is one of the key barriers to the development of a market in South Africa. Biodiesel has the potential to contribute to job creation, economic development in disadvantaged rural communities, energy security in the light of rising oil prices, and reducing greenhouse gas emissions. Some of the key challenges to the development of a biodiesel market are food security and limited water resources