Economic prosperity in marginalised communities with renewable energy in South Africa. Assessing the co-benefits of decarbonising the power sector

South Africa’s renewable energy (RE) procurement policy is unique globally in its emphasis on providing benefits for communities in the vicinity of projects participating in the RE Independent Power Producer Procurement Programme (REIPPPP). RE projects are primarily located in rural communities, frequently categorised as “marginalised communities”. The REIPPPP has created a legal framework to incentivise IPPs to channel benefits to communities near RE project sites through a range of means, including local employment quotas, community ownership in RE projects, as well as contributing a proportion of their revenue towards development spending, known as socio-economic development (SED) and enterprise development (ED) spend. This study assesses the SED and ED impacts of renewable energy deployment in marginalised communities in South Africa; this was carried out in the context of the COBENEFITS project with the aim of assessing the range of additional benefits2 resulting from a low-carbon energy transition in the country. It entails the assessment of selected socio-economic impacts, realised to date, in three REIPPPP project areas, along with projections and modelling the assessed impacts (up to 2030 for the medium term, and 2050 for the long term) across a range of power sector decarbonisation scenarios. Four scenarios for the future development of the electricity sector in South Africa were analysed: Council for Scientific and Industrial Research Least Cost planning scenario (CSIR_LC); Department of Environmental Affairs Rapid Decarbonisation scenario (DEA_RD); Integrated Resource Plan 2016 (IRP 2016); and Integrated Resource Plan Policy Adjusted scenario 2018 (IRP 2018). The COBENEFITS study also sought to provide insights on further improving the various benefits that should accrue to. The four scenarios considered two timelines consistent with the DOEs reporting of the draft IRP 2018: The short-term timeline up to the year 2030 which is based on the expected electricity generation mix to meet the rising demand in the country and which is aligned with the National Development Plan 2030. The long-term timeline considers the timeframe up to 2050, based on the electricity generation mix predicted to meet the projected growth in energy demand in the country within this timeframe. It also considers the predicted decommissioning timeline of coal power plants in the country by 2050. “Test case variables input parameters” stated in the draft IRP 2018 (for public comments) such as the RE annual limits were applied for the reference IRP 2018 scenario stated in this study.