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A Just Energy Transition and Functional Federalism: The Case of South Africa

Published online by Cambridge University Press:  26 February 2021

Tracy-Lynn Field Open the ORCID record for Tracy-Lynn Field [Opens in a new window]
Tracy-Lynn Field*
Affiliation:
School of Law, University of the Witwatersrand, Johannesburg (South Africa). Email: [email protected].
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Abstract

The traditional concern of federalism literature has been both descriptive and prescriptive. How do federalist systems allocate powers among central, regional, and even local governments? How can these powers be divided in a manner that allows for unity and diversity in policymaking and law? These questions are given greater pertinence by the seriousness of climate change and the need for a just transition to lower-carbon economies. Classical federalism, public choice theory, and dynamic energy federalism all have something to offer in the field of clean energy federalism. This article situates the ‘functional federalism’ that arises from South Africa's multi-sphere system of government within these debates. The article explains the system of functional federalism in South Africa and details the tripartite structure (physical, market, and regulatory) of the South African electricity sector. By delineating the complex interactions that have unfolded between governmental and non-governmental actors in the electricity sector in recent times, the article demonstrates that the South African case will be of continuing interest to scholars of federalism.

Keywords

FederalismClean energy federalismJust transitionFunctional federalismCooperative government
Type
Symposium Article
Information
Transnational Environmental Law , Volume 10 , Issue 2 , July 2021 , pp. 237 - 261
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press.

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Footnotes

This contribution is part of a collection of articles growing out of the workshop ‘The Law of Energy Transition in Federal Systems’, held by the University of Tübingen, Faculty of Law, and the University of North Carolina at Chapel Hill, School of Law, in Tübingen (Germany), 27 June 2019.

References

1 Government of the Republic of South Africa, ‘National Climate Change Response White Paper’, 2011, p. 5, available at: https://www.environment.gov.za/sites/default/files/legislations/national_climatechange_response_whitepaper.pdf.

2 National Planning Commission, National Development Plan, 2030: Our Future – Make it Work (2012), p. 212, available at: https://www.gov.za/sites/default/files/gcis_document/201409/ndp-2030-our-future-make-it-workr.pdf.

3 Department of Public Enterprises, Republic of South Africa, Roadmap for Eskom in a Reformed Electricity Supply Industry (Public Enterprises, 2019), p. 32 (Eskom Roadmap), available at: https://www.gov.za/sites/default/files/gcis_document/201910/roadmap-eskom.pdf.

4 Ibid., p. 15.

5 Heffron, R.J. & McCauley, D., ‘What is the “Just Transition”?’ (2018) 88 Geoforum, pp. 74–7CrossRefGoogle Scholar.

6 Osofsky, H.M. & Wiseman, H.J., ‘Dynamic Energy Federalism’ (2013) 72(3) Maryland Law Review, pp. 773–843Google Scholar.

7 For a recent detailed report on the energy sector in its entirety, see Department of Energy, Republic of South Africa, South African Energy Sector Report 2019, p. 8 (Energy Sector Report 2019), available at: http://www.energy.gov.za/files/media/explained/2019-South-African-Energy-Sector-Report.pdf.

8 Almost all of South Africa's crude oil is imported, but it has significant refining capacity (second only to Egypt on the continent). Over 90% of crude oil is imported from Saudi Arabia, Nigeria, and Angola. Four of the country's refineries produce liquid fuels from crude oil, while the remaining two rely on coal-to-liquids and gas-to-liquids technologies. In 2016, South Africa refined 718,000 barrels per day: ibid., pp. 8–9.

9 Constitution of the Republic of South Africa, 1996 (Constitution, 1996), s. 1.

10 Villiers, B. de, ‘Federalism in South Africa: Implications for Individual and Minority Protection’ (1993) 9(3) South African Journal on Human Rights, pp. 373–87, at 375CrossRefGoogle Scholar.

11 Ibid., p. 374.

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14 See Municipalities of South Africa, ‘Municipalities’, available at: https://municipalities.co.za.

15 Constitution, 1966, s. 40(1).

16 See, further, Section 4.3 below.

17 Freedman, n. 13 above, para. 60.

18 Constitution, 1996, s. 41(1)(a).

19 Ibid., s. 41(1)(b).

20 Ibid., s. 41(1)(c).

21 Ibid., s. 41(1)(e).

22 Ibid., s. 41(1)(f).

23 Ibid., s. 41(1)(g).

24 Ibid., s. 41(1)(i).

25 Ibid., s. 41(1)(h)(iv).

26 Ibid., s. 41(1)(h)(v).

27 Ibid., s. 41(1)(h)(vi).

28 See Freedman, n. 13 above, para. 62.

29 2002 (2) BCLR 156 (CC).

30 Ibid., para. 33.

31 See Bronstein, n. 12 above, p. 28.

32 2000 (1) SA 732 (CC), para. 51.

33 2010 (9) BCLR 859 (CC) (Gauteng Development Tribunal case).

34 See Engel, K.H., ‘Harnessing the Benefits of Dynamic Federalism in Environmental Law’ (2006) 56 Emory Law Journal, pp. 159–88, at 163–4Google Scholar. See, further, Section 3 below.

35 Gauteng Development Tribunal case, n. 33 above, para. 53.

36 Ibid., para. 55.

37 Ibid., para. 56.

38 Freedman, n. 13 above, para. 60.

39 Mormann, F., ‘Clean Energy Federalism’ (2015) 67(5) Florida Law Review, pp. 1621–81, at 1671Google Scholar.

40 Ibid., p. 1673.

41 Stewart, R.B., ‘Environmental Quality as a National Good in a Federal State’ (1997) 1 University of Chicago Legal Forum, pp. 199–229Google Scholar.

42 Revesz, R.L., ‘Rehabilitating Interstate Competition: Rethinking the “Race-to-the-Bottom” Rationale for Federal Environmental Regulation’ (1992) 67 New York University Law Review, pp. 1210–54, at 1211–2Google Scholar.

43 Macey, H.N. Butler & J.R., ‘Externalities and the Matching Principle: The Case for Reallocating Environmental Regulatory Authority’ (1996) 23(Symposium Issue) Yale Law and Policy Review, pp. 23–66Google Scholar.

44 Engel, n. 34 above, pp. 163–4.

45 Mormann, n. 39 above, p. 1673.

46 Ibid., p. 1674.

47 Ibid.

48 Ibid., pp. 1674–5.

49 The seminal work on public choice theory is Arrow, K.J., Social Choice and Individual Values (Wiley, 1951)Google Scholar.

50 Mormann, n. 39 above, p. 1677.

51 Sarnoff, J.D., ‘The Continuing Imperative (but only from a National Perspective) for Federal Environmental Protection’ (1997) 7(2) Duke Environmental Law & Policy Forum, pp. 225–319Google Scholar (cited in Mormann, n. 39 above, p. 1677).

52 Mormann, n. 39 above, pp. 1677–8.

53 Engel, n. 34 above, p. 166.

54 Ibid., p. 174.

55 Ibid., p. 176.

56 Ibid., pp. 174, 176.

57 Ibid., p. 177.

58 Ibid., p. 178.

59 Ibid.

60 Ibid., p. 182.

61 Osofsky & Wiseman, n. 6 above, p. 803.

62 Ibid., p. 801.

63 Ibid., pp. 808–15.

64 Ibid., p. 815.

65 Ibid., p. 803.

66 Ibid., p. 826.

67 Ibid., pp. 829–31.

68 Ibid., p. 819.

69 Ibid., p. 824.

70 Ibid., pp. 779–80.

71 V. Ndlovu & R. Inglesi-Lotz, ‘Positioning South Africa's Energy Supply Mix Internationally: Comparative and Policy Review Analysis’ (2019) 30(2) Journal of Energy in Southern Africa, pp. 14–27, at 15.

72 Energy Sector Report 2019, n. 7 above, p. 8.

73 Ibid.

74 Department of Energy, Republic of South Africa, ‘Integrated Energy Plan’ (2016), p. 44.

75 Department of Energy, Republic of South Africa, ‘Integrated Resource Plan for Electricity: 2010–2030’ (2011), p. 7.

76 Ibid.

77 Department of Energy, Republic of South Africa, ‘Integrated Resource Plan’ (IRP2019), GN 1359, Government Gazette 42778, 18 Oct. 2019, p. 39.

78 Although the variability of renewable energy supply still puts the total energy contribution of coal to the electricity mix at 58.8% by 2030.

79 IRP2019, n. 77 above, p. 39.

80 Department of Energy, Republic of South Africa, ‘South African Coal Sector Report’ (2016), p. 1.

81 A. Watson, ‘How Much Coal Does SA Have Left?’, The Citizen, 5 June 2018, available at: https://citizen.co.za/news/south-africa/1944899/how-much-coal-does-sa-have-left.

82 IRP2019, n. 77 above, p. 11.

83 Integrated Energy Plan, n. 74 above, p. 52.

84 Ibid.

85 Ibid.

86 Ibid., p. 54.

87 Ibid.

88 Ibid., pp. 55–7. Wood waste in the commercial forestry industry is being targeted for electricity generation from biomass, as is bagasse from the production of sugarcane. Gas-to-landfill projects are already being implemented in some municipalities. The Integrated Energy Plan estimates that the energy content of the domestic and industrial waste disposed in landfills on an annual basis is 11 GW.

89 K. Gottschalk, ‘Will Zuma's Allies Get Their Way on Nuclear?’, The Citizen, 10 Nov. 2017, available at: https://citizen.co.za/news/south-africa/1723570/will-zumas-allies-get-their-way-on-nuclear.

90 IRP2019, n. 77 above, pp. 11–2.

91 The Grand Inga Project, based in the Democratic Republic of the Congo, will be the world's largest hydroelectric power scheme, with an estimated capacity of 39 GW. The South African government is committed to exploring options for importing hydropower from this scheme under the Southern African Power Pool: Integrated Energy Plan, n. 74 above, p. 55.

92 Ibid., p. 49.

93 Ibid., p. 47.

94 Eskom Roadmap. n. 3 above, p. 18. The Southern African Power Pool is an electricity power pool under the auspices of the Southern Africa Development Community, in existence since 1995.

95 Ibid., p. 17.

96 Climate Transparency, ‘Brown to Green: The G20 Transition to a Low-carbon Economy, 2018’, available at: https://newclimate.org/wp-content/uploads/2018/11/B2G_2018_South_Africa.pdf.

97 Ibid.

98 Ibid., but given South Africa's extremely high Gini coefficient, the per capita usage per annum for affluent groups is far higher.

99 Ibid.

100 New York, NY (US), 9 May 1992, in force 21 Mar. 1994, available at: https://unfccc.int/resource/docs/convkp/conveng.pdf.

101 Kyoto (Japan), 11 Dec. 1997, in force 16 Feb. 2005, available at: http://unfccc.int/kyoto_protocol/items/2830.php.

102 Paris (France), 12 Dec. 2015, in force 4 Nov. 2016, available at: http://unfccc.int/paris_agreement/items/9485.php.

103 Eskom Roadmap, n. 3 above, p. 15.

104 Government of South Africa, ‘South Africa's Intended Nationally Determined Contribution’, available at: https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/South%20Africa%20First/South%20Africa.pdf.

105 Wikipedia, ‘List of Countries and Dependencies by Population Density’, available at: https://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_population_density.

106 Eskom Roadmap, n. 3 above, p. 25.

107 Energy Sector Report 2019, n. 7 above, p. 23.

108 Ibid., p. 24.

109 Energy Intensive Users Group of Southern Africa, ‘Home’, available at: https://eiug.org.za.

110 N. James, ‘Mixed Picture: SA Mining Showing “Steady Improvement” but Concerns Linger’, Mining Weekly, 13 Dec. 2019, p. 11.

111 Together with the African National Congress (ANC), and South African Communist Party (SACP).

112 See the outline of the Renewable Energy Independent Power Producers programme further below.

113 Coal Transporters Forum v. Eskom Holdings Ltd [2019] ZAGPPHC 76.

114 A. Marquard et al., ‘South Africa's Electrification Programme: An Overview and Assessment’, Dec. 2007, Working Paper, Graduate School of Business, University of Cape Town (South Africa), p. 7, available at: https://www.gsb.uct.ac.za/files/SAElectrificationworkingpaperfinal.pdf.

115 South African Government, ‘Integrated National Electrification Programme’, available at: https://www.gov.za/about-government/government-programmes/inep.

116 Ndlovu & Inglesi-Lotz, n. 71 above, p. 18.

117 Wikipedia, ‘Eskom’, available at: https://en.wikipedia.org/wiki/Eskom.

118 Ibid.; Eskom Roadmap, n. 3 above, p. 25.

119 C. Paton, ‘Brace for More Stage 6 Load-shedding as Eskom Breakdowns Rise’, TimesLive, 7 Jan. 2020, available at: https://www.timeslive.co.za/news/south-africa/2020-01-07-brace-for-more-stage-6-load-shedding-as-eskom-breakdowns-rise.

120 Eskom Roadmap, n. 3 above, p. 12.

121 K. Sharife & M. Anderson, ‘How Trillian Hid Eskom's Missing Millions’, TimesLive, 18 Sept. 2019, available at: https://www.businesslive.co.za/fm/features/2019-09-18-exclusive-how-trillian-hid-eskoms-missing-millions.

122 Eskom, ‘Integrated Report’, 31 Mar. 2019, p. 12.

123 Ibid., p. 6.

124 Ibid., p. 1.

125 Ibid., p. 82.

126 Ibid., p. 6.

127 Ibid., p. 34.

128 Ibid.

129 Eskom Roadmap, n. 3 above, p. 5.

130 Ibid., p. 4.

131 Ndlovu & Inglesi-Lotz, n. 71 above, p. 15.

132 L. Nomjana, ‘REIPPP Comes of Age’, Futuregrowth Asset Management, 14 May 2019, available at: https://futuregrowth.co.za/newsroom/reippp-comes-of-age.

133 South African Government, ‘Minister Jeff Radebe: Renewable Energy Independent Power Producer Procurement Programme’, 24 Feb. 2019, available at: https://www.gov.za/speeches/media-statement-minister-energy-jeff-radebe-renewable-energy-independent-power-producer.

134 Ndlovu & Inglesi-Lotz, n. 71 above, p. 15.

135 South African Government, n. 133 above.

136 Nomjana, n. 132 above. Developmental factors are weighted at 30% in REI4P procurement.

137 A. Eberhard & R. Naude, ‘The South African Renewable Energy IPP Procurement Programme: Review, Lessons Learned, and Proposals to Reduce Transaction Costs’ [n.d.], UCT Graduate School of Business, p. 1. If the fifth bid window is included, more than 100 bidders have now been selected.

138 Nomjana, n. 132 above.

139 South African Government, n. 133 above.

140 Ibid.

141 Ibid.

142 Cullinan & Associates, ‘NERSA Should Take Eskom to Task over Illegal Refusal to Sign PPAs’, Polity, 11 Nov. 2016, available at: https://www.polity.org.za/article/nersa-should-take-eskom-to-task-over-illegal-refusal-to-sign-ppas-2016-11-11.

143 African Climate Reality Project, ‘Submission by the African Climate Reality Project (‘ACRP’) relating to the Eskom Revenue Application to NERSA for FY 2018, 2019’, 13 Oct. 2017, para. 4, available at: http://climatereality.co.za/wp-content/uploads/2017/11/20171013_ACRP-submission-re-Eskom-revenue-application.pdf.

144 Cullinan & Associates, n. 142 above.

145 But only after a ‘cloak and dagger’-style signing ceremony where independent power producers were made to wait for hours to sign the PPAs. The 27 projects were worth R56 billion in investment, and projected to create 58,000 new jobs; see C. Yelland & R. Lilley, ‘Cloak and Dagger Drama at the IPP Signing’, EE Publishers, 16 Apr. 2018, available at: https://www.ee.co.za/article/drama-at-the-signing-why-did-eskom-refuse-to-sign-the-ppas.html.

146 African Climate Reality Project, n. 143 above, para. 5.

147 N. Govender, ‘Why Small-Scale Embedded Generation Is So Important’, EE Publishers, 11 June 2019, available at: https://www.ee.co.za/article/why-small-scale-embedded-generation-is-so-important.html.

148 South African Local Government Association (SALGA), ‘Status of Small-Scale Embedded Generation (SSEG) in South African Municipalities’, Oct. 2017, p. 2.

149 Govender, n. 147 above.

150 Eskom Roadmap, n. 3 above, p. 25.

151 Constitution, 1996, s. 152(1).

152 Municipal Systems Act 2000, s. 4(2)(d), (f) and (g). Under this legislation municipalities must promote and undertake development in the municipality, strive to ensure that municipal services are provided to the local community in a financially and environmentally sustainable manner, and give members of the local community equitable access to the municipal services to which they are entitled.

153 National Energy Regulator Act 2004, s. 4.

154 Ibid., s. 5(1).

155 Ibid., s. 6(2)(a).

156 Electricity Regulation Act 2006, s. 4.

157 Ibid., s. 7(1).

158 An analysis of how NERSA has performed in this role is beyond the scope of this article.

159 Electricity Regulation Act 2006, s. 34(1)(a).

160 Ibid., s. 34(1)(b).

161 Ibid., s. 34(1)(c) and (d).

162 See Section 4.1 above.

163 Electricity Regulation Act 2006, s. 34(1)(e).

164 Ibid., s. 34(4).

165 ‘Necessary and incidental’ powers are set out in s. 34(2) of the Electricity Regulation Act 2006.

166 ‘Eskom in Court over Tariff Dispute with NERSA’, SABC News, 15 Jan. 2020, available at: http://www.sabcnews.com/sabcnews/eskom-in-court-over-tariff-dispute-with-nersa.

167 N. Seleka, ‘City of Cape Town Seeks Court Permission to Buy Electricity Directly from IPPs as Energy Crisis Reaches “New Peak”’, News24, 10 Dec. 2019, available at: https://www.news24.com/SouthAfrica/News/city-of-cape-town-seeks-court-permission-to-buy-electricity-directly-from-ipps-as-energy-crisis-reaches-new-peak-20191210.

168 G. Quintal, ‘ANC Eases Way for Power Producers’, Business Day, 21 Jan. 2020, p. 1.