Investigating the effects of a green economy transition on the electricity sector in the Western Cape province of South Africa: a system dynamics modelling approach

Thesis (MEng)--Stellenbosch University, 2016.ENGLISH ABSTRACT: Many of the global and regional crises – economic, social, and environmental – that are prevalent today can be attributed to misdirected investments that were made in the past. The current crisis that the electricity sector in South Africa finds itself in can be attributed to such misdirected investments. This current crisis in the electricity sector relates to electricity supply shortages and an increasing carbon footprint. This crisis has to be faced by each of the country’s nine provinces. The Western Cape Province in South Africa has identified the green economy concept as a tool to transform the Province’s economy to one that is more sustainable from an economic, social, and environmental perspective. This transition would include transforming the Province’s electricity sector to one that is more sustainable and more in line with the green economy concept. Three key priorities of this transition include using gas power technologies as a transition fuel, increasing renewable energy capacity, and developing a manufacturing sector that can support the growing renewable energy industry. The difficulty of obtaining finance and prevalence of financial mismanagement in South Africa requires that such a transition be properly planned and managed in order for it to be carried out successfully. The system dynamics methodology was chosen to develop a better understanding of the impacts of different green economy policies and investments in the electricity sector of the Western Cape Province. This was achieved by developing a system dynamics model of the Province’s electricity sector and simulating different green economy investment policies. Five scenarios were simulated over a 40 year simulation period, from 2001 to 2040. The results suggested that continuing on the current policy path would increase the gap between demand and supply, increase the carbon footprint of the electricity sector, and not provide growth in employment in the sector. Strategic green economy investments are expected to impact positively on a number of indicators across a number of sectors: electricity supply, renewable energy share, employment, and greenhouse gas emissions. A few points of concern for policymakers, regarding renewable energy technologies, were highlighted. These include the short operating life of wind and solar PV technologies, their low capacity factors, and their inability to supply base-load power. Other concerns that were highlighted include the expected growth in electricity demand in the Province, large investments needed for electricity capacity expansion, and the benefit of localising manufacturing activities related to wind and solar PV technologies. Overall, the study laid the foundation for future research on the topic of a green economy transition of the Western Cape Province’s electricity sector. The usefulness of applying the system dynamics methodology to green economy transition research was also demonstrated. The study aims to provide relevant and insightful recommendations to the policymakers and stakeholders that are, and will be, involved in the process of transitioning the Western Cape Province to a green economy hub and the Province with the lowest carbon footprintAFRIKAANS OPSOMMING: Baie van die globale and plaaslike kriesisse – ekonomiese, sosiale,en omgewings – wat tans ondervind word, kan toegeskryf word aan sleg toegekende beleggings wat in die verlede gemaak is. Die ongewenste omstandighede wat die Suid-Afrikaanse elektrisiteits-sektor hom tans in bevind kan toegeskryf word aan sulke sleg toekende beleggings. Die grootste kommer oor die elektrisiteits-sektor hou verband met die tekort aan verskaffing van elektrisiteit en die sektor se groot koolstofvoetspoor. Al nege van die land se provinsies word tans blootgestel aan hierdie kwessies. Die Wes-Kaapse Provinsie in Suid-Afrika het die konsep van die groen ekonomie geïdentifiseer as ‘n werktuig om die Provinsie se ekonomie te omskep in een wat meer volhoubaar is van ‘n ekonomiese, sosiale, en omgewings perspektief af. Hierdie oorgang na ‘n groen ekonomie vereis die omskepping van die elektrisiteits-sektor in een wat meer volhoubaar is en in lyn is met die konsep van die groen ekonomie. Drie prioriteite van so ‘n oorgang is die gebruik van natuurlike gas tegnologie as ‘n oorgangs-brandstof, uitbreiding van hernubare energie kapasiteit, en die ontwikkeling van ‘n vervaardigings-sektor wat die groeinde hernubare energie sector kan ondersteun. Die verkryging en wanbestuur van finansiële kapitaal in Suid-Afrika bly ‘n bron van kommer, dus is die sukses van so ‘n oorgang hoogs afhangend van die behoorlike beplanning en bestuur daarvan. Die studie maak gebruik van die stelsel dinamika metode om ‘n beter begrip te ontwikkel van die moontlike voordele en impakte wat verskillende groen ekonomie beleid en beleggings in die elektrisiteits-sektor van die Wes-Kaap kan bewerkstellig. ‘n Stelsel dinamika model van die Wes-Kaapse elektrisiteits-sektor was ontwikkel en simulasies was uitgevoer vir verskillende groen ekonomie beleid gevalle. Vyf gevalle was gesimuleer oor ‘n 40 jaar simulasie tydperk wat strek van 2001 tot 2040. Die resultate van die simulasie stel voor dat die voortsetting van de huidige beginsels en beleid sal lei tot ‘n groter gaping tussen die aanvrag en die verskaffing van eletriese krag, ‘n groter koolstofvoetspoor van die elektrisiteits-sektor, en geen groei in die werkverskaffing van die sector nie. Daar word verwag dat strategiese groen ekonomie beleggings ‘n positiewe impak sal bewerkstellig in menigde aanwysers: verskaffing van elektrisiteit, aandeel van totale kapasiteit wat hernubare energie uitmaak, werkverskaffing, en kweekhuisgas-vrystellings. ‘n Paar bronne van kommer wat verband hou met die gebruik van hernubare energie tegnologie is uitgewys. Dit verwys na die kort operasionele lewe van wind en sonkrag tegnologie, hulle lae kapasiteit factor, en hulle onbevoegdheid om basisladingskrag te voorsien. Ander bronne van kommer wat bespreek is sluit in die verwagte groei in aanvraag na elektriese krag in die Provinsie, groot beleggings wat benodig word om die sektor te omskep, en die voordeel wat die lokalisering van die vervaardiging van windkrag en sonkrag komponente inhou. In algeheel het die studie die fondasie gelê vir toekomstige navorsing in die groen ekonomie oorgang van die elektrisiteits-sektor in die Wes-Kaap. Die studie demonstreer verder ook die nuttigheid van die stelsel dinamika metode vir die modellering van groen ekonomie oorgange. Die studie beoog ook om relevante en insiggewende aanbevelings te voorsien aan die beleidsmakers en belanghebbendes wat betrokke is by die oorgang van die Wes-Kaap Provinsie na ‘n groen ekonimie middelpunt en die provinsie met die laagste koolstofvoetspoor