Critical insights and questions for localisation and decent employment

South Africa’s renewable energy transition is unfolding within a complex landscape shaped by climate commitments, deep socio-economic inequality, energy insecurity, and structural unemployment. This policy scan provides a systematic review of the country’s renewable energy, climate, electricity, and industrial policy frameworks, assessing whether they meaningfully support a just transition grounded in localisation, decent work, and inclusive economic participation.

Why this scan matters

South Africa has committed to ambitious decarbonisation targets under the Paris Agreement and has developed an extensive policy architecture to support renewable energy uptake. Key instruments include the Renewable Energy Independent Power Producer Procurement Programme (REI4P), reforms to the Electricity Regulation Act, and the Just Energy Transition Partnership (JETP) announced at COP26.

At the same time, the country faces:

• Persistent unemployment and inequality

• Energy poverty despite high electrification rates

• Severe electricity supply constraints driven by the crisis at Eskom

• A concentrated and import-dependent industrial structure

In this context, the energy transition is not only a technological shift — it is a socio-economic transformation with high stakes for workers, communities, municipalities, and local industries.

What the framework assesses

The scan evaluates whether current policy instruments create real space for:

• Local manufacturing and localisation

• Small, Medium and Micro Enterprise (SMME) participation

• Decent work and labour protections

• Gender equality and youth inclusion

• Energy poverty alleviation

Through a systematic desktop review of legislation, regulations, masterplans (including the forthcoming South African Renewable Energy Masterplan), and secondary research, the analysis identifies gaps, contradictions, and opportunities across electricity, industrial, and labour policy domains.

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Key findings

1. Electricity policy: enabling but uneven

South Africa now has a comprehensive legal framework enabling renewable energy investment — particularly through private and business-to-business arrangements. Renewable uptake is expanding rapidly.

However:

• Long-term demand stability is uncertain.

• Governance of a restructured electricity system remains unsettled.

• Municipalities, which will play a critical role in distribution and embedded generation, remain under-capacitated and under-resourced.

• Pricing and tariff reform risks regressive outcomes if not carefully managed.

A coherent and coordinated approach is required to align national energy objectives with local realities.

2. Industrial policy: localisation remains fragile

From the outset, renewable energy procurement included local content requirements. Yet inconsistent enforcement, global supply chain pressures, fiscal constraints, and the urgency of the energy crisis have limited localisation outcomes.

Without targeted intervention, risks include:

• Over-reliance on imported technologies

• Weak local value chains

• Limited benefit-sharing for workers and communities

• Reproduction of inequality within a low-carbon economy

The South African Renewable Energy Masterplan represents an important attempt to reset localisation ambitions. To succeed, it must:

• Establish clear, enforceable localisation targets

• Align incentives with measurable socio-economic outcomes

• Provide financial and technical support to domestic manufacturers and SMMEs

• Ensure interdepartmental policy coherence

3. Decent work: potential not yet realised

While renewable energy projects can generate employment, current patterns raise concerns:

• Many jobs are short-term and concentrated in construction phases

• Quality, stability, and wage levels vary significantly

• Gender inclusivity and equitable access remain underdeveloped

• Links between renewable employment and sustainable livelihoods are insufficiently understood

The framework highlights the need for:

• Robust labour standards and worker protections

• Skills development aligned with industrial strategy

• Clear indicators to measure job quality, inclusivity, and social protection

• Greater alignment with national decent work commitments

Without deliberate policy integration, renewable expansion risks entrenching “low-carbon poverty” rather than delivering structural transformation.

Central insight

The renewable energy transition in South Africa cannot be treated as a narrow energy-sector reform. It must be integrated with:

• Industrial development strategy

• Municipal governance reform

• Labour market policy

• Gender and youth inclusion strategies

• Energy poverty interventions

A just transition requires coordinated, enforceable policy measures that actively shape market outcomes — not simply enable private investment.

Who this framework is for

This policy scan is designed for:

• Policymakers and regulators

• Labour federations and civil society organisations

• Municipal leaders

• Industrial strategists and economic planners

• Researchers and practitioners engaged in just transition debates

By mapping the current policy terrain and identifying structural gaps, the framework provides a foundation for advancing localisation, decent employment, and equitable development within South Africa’s renewable energy transition.

South African Renewable Energy Policy Scan