Technological capability building and major policy change in the South African renewable energy industry

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2022

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Nyoka, Nomalungelo

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Abstract

South Africa has made a public and global commitment to address the issue of climate change through the mitigation of greenhouse gas emissions and the deployment of renewable energy as a cleaner alternative for the energy sector. Being a middleincome economy, the country is also faced with pressing socio-economic issues that relate to poverty, job scarcity and unreliable electricity supply. Given South Africa’s stern commitment to transitioning from conventional heavy emitting energy sources to cleaner renewable sources, the country still has a long way to go with regards to growing technological capabilities domestically for renewables and the policy environment for the enablement of this goal plays a significant role. Moreover, the actors within the energy sector can themselves be organised in a manner that leads policy change through displaying intent and proactivity to grow their technological capabilities in the sector. The purpose of the research is to explore how South Africa is building technological capabilities as they relate to learning as understood in the innovation perspective and to analyse the relationship between learning and major policy change. For the purposes of the research, the study explores the South African energy sector. The research objectives were to identify the actors involved in renewable and conventional energy within the sector and perform a comparative case study analysis between the coalitions to explore the conditions for major policy change with respect to technological capability building. Furthermore, a retrospective view of the South African policy environment for the energy sector was undertaken over the past decade to discuss how external shock events may have triggered policy change toward renewable energy. Subsequently a projected view was applied to discuss how actors in the South African energy sectors can seize opportunities to influence policy change through emphasising their endeavors for technological capability building. The primary data for the research has been collected using semi-structured interviews and the research method that is used is qualitative methodology to conduct in-depth analysis on the topic of technological capability building within the South African renewable energy sector and to assess policy change within the sector. Secondary data was gathered using policy documents and reports to gather more insights on the relevant government departments, their pro-conventional and/or prorenewable agenda, as well as their beliefs and intentions for technological capability building within the energy sector. The data was analysed through manual coding of the data and identification of themes and interpretation of the main descriptions gathered from the data. The research findings indicate that the pro-renewable coalition is receiving more support when compared to the pro-conventional coalition. This is due to the inherent nature of the energy industry which has been monopolised by a select few actors in the conventional energy space before the inclusion on alternative energy producing capabilities. Moreover, some of the conventional energy actors have since encompassed renewable energy capabilities as part of their business model in an attempt to reduce their greenhouse gas emissions (policy push) and invest in renewables which are the projected future trend in the energy sector (economic pull). Although the pro-conventional energy coalition is smaller in the number of actors, their political influence is more solid due to the fact that the country is still coal-dependent and possesses strong capabilities in avenues such as the nuclear energy front, which, in the face of the current pressures with energy shortages in the country, are the nation’s muscle. Technological capability building seems to be a desirable goal for both the prorenewable and pro-conventional coalitions in South Africa, although current factors associated with financial resource constraints, a lack of technical expertise, political corruption and a lack of trust by foreign investors, ineffective mechanisms for accessing new knowledge and inefficient mechanisms for disseminating and utilising the acquired knowledge, form hindrances to achieving this. Policy bias for massproducing energy options and a focus at low-costs during the procurement process also provides an unconducive environment for building technological competencies given that policy does not adequately incentivise nor reward such efforts. Government recognises this shortfall in its procurement regulatory frameworks and is currently faced with the task to redesign these instruments in a manner that will stimulate innovation and localisation. In addressing the matter of policy change, this research identifies the 2009 – 2011 period in South Africa as giving rise to radical institutional change in in favour of renewables following the country’s public declaration for reducing emissions and transitioning towards renewables, as an aim to follow the international norms. With the current national energy crisis, some institutional changes have taken place with the introduction of more independent power generators in the grid, although with limited possibility for this to improve domestic technological competencies within the energy sector. It is anticipated that emerging external shocks such as a rapid adoption of disruptive technologies might invigorate the need for policy to be shaped in favour of achieving the required localisation of expertise and subsequent building of technological capabilities. The limitations with this research include data that is not exhaustive given the time constraints associated with this type of research, and given that participation was further restricted due to the current challenges on people’s availability as imposed by the national lockdown restrictions. The research also focuses on one sector in South Africa and does not appreciate other parts of the economy where technological capability building might be taking place more readily. Future studies may also focus on addressing the topic of learning as understood in innovation systems from an organisational and policy learning point of view in order to expand on the learning phenomenon as explored by this research.

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A research report submitted to the Wits Business School in the University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in Innovation Studies, 2022

Keywords

renewable energy industry, South African, Technology, Policy change

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