South Africa’s renewable energy market has been on the rise over the past decade. The share of primary energy consumption from renewable energy sources (hydropower, solar, wind, geothermal, bioenergy, wave, and tidal) has significantly increased since 2013. Furthermore, considering South Africa’s abundant supply of natural resources, the growing demand for renewables, and the government’s numerous pro-renewable energy policies, the country’s renewable energy market is expected to continue growing significantly. (DHL, 2024; GreenCape, 2024)
Figure 1: South Africa Renewables (% equivalent primary energy)
Source: Our World in Data, 2024
Increasing renewable energy generation and consumption in a country is commonly accepted to reduce the country’s air pollution levels and increase its energy security (Buonocore, et al., 2015; Lambert & Silva, 2012). This is especially important for South Africa, given its dependence on fossil fuels (with fossil fuels providing 91% of its energy supply in 2021, compared to a global average of 80%), and given its high levels of loadshedding (with 2023 having by far the most hours of loadshedding to date) (IISD, 2024; Daily Investor, 2023).
It is also often suggested that renewable energy (RE) is economically justified in that it will bring with it new and more sustainable job opportunities. For example, the South African government has stated that it is planning to “create thousands of jobs in renewable energy” (Mzekandaba, 2024; Miller, 2024). However, since RE has both a direct and indirect effect on labour, the overall effect on employment depends on the direction and strength of these two effects (Meyer & Sommer, 2016; Lambert & Silva, 2012). The possibility of RE adoption having either a positive or a negative impact on employment levels should be a particular interest to South Africa, given its high levels of unemployment.
The potential positive impact of RE on employment is largely seen through the generation of “green jobs”. There is however no uniformity around the definition of a green job; most definitions include jobs which “preserve or restore the environment” and are linked to jobs within the “green economy” (Peters, Eathington, & Swenson, 2010; Stanef-Puică, et al., 2022). While it would be time consuming to list all jobs which are included in the green economy, it is much simpler to note that employment created through the generation, operation, and maintenance of renewable energy sources would qualify as green jobs (I. Meyer, M. W. Sommer, 2014).
Based on this definition, the gross effect on employment from RE through direct job creation will always be positive, with RE infrastructure development creating additional demand for labour throughout the production, installation, and maintenance supply chains. (Pestel, 2019).
Studies on the impact of RE on employment can therefore lead to overly optimistic results, especially if they only take the gross effect into account and do not consider some of the potentially adverse economy-wide employment effects. (I. Meyer, M. W. Sommer, 2014) (Lambert & Silva, 2012). It is therefore important that such studies adopt a comprehensive approach and consider all of the different channels through which a rapid transition to RE may impact on employment. These include: (Nasirov, Girard, Pena, Salazar, & Simon, 2021)
- Job creation, where the expansion of RE generates new products, services, and infrastructure which can create new jobs across sectors of the economy. This may require new skills to be developed.
- Job replacement, where existing jobs in conventional energy sectors are replaced by jobs in RE sectors. This can be rapid or gradual depending on the growth of the RE industry, with respective consequences for job profiles and skill requirements.
- Job losses, where the reduction in conventional energy activities could lead to job losses without direct replacement.
- Job “greening”, where existing jobs will adapt to new roles. For example, traditional engineers may transition to fulfil the technical expertise needed in the RE sector.
Numerous economic methodologies, such as input-output models, CGE models, and analytic assessment models can be used to examine the full potential impacts of RE on job growth. While scarce, those studies which do examine the overall impact of RE generation on employment in South Africa find a positive relationship between the two (i.e., RE promoting job growth) (Khobai, Kolisi, Moyo, Anyikwa, & Dingela, 2020; Hanto, et al., 2021). Further economy-wide studies and continuous monitoring and evaluation will be required to guide the country’s national RE and employment policies and to ensure that RE generation does ultimately contribute to employment creation.