South Africa’s president Jacob Zuma delivered the 2014 State of the Nation Address on June 17, and has received mixed reactions – particularly in regards to the energy sector. Consulting firm Frost & Sullivan’s program manager for energy and environment, Johan Muller, said that while several themes were mentioned, country challenges were also overlooked.
Zuma discussed the “radical” transformation of South Africa’s energy mix, structural changes applied to public sector entities, a commitment towards developing nuclear and shale gas, and energy imports via the state-owned utility Eskom. Muller said the message being sent to potential foreign investors, local manufacturing markets, and service providers was the strong emphasis on the development of coal, nuclear, and shale. He asked, “Where does the proposed carbon tax still fit in, why the strong emphasis on nuclear, should renewable energies not play a larger part in the energy mix, and is there more room for privatization in the energy landscape?”
While the analyst said that the address covered a few valid points, most of the speech was very vague in its inability to explain or provide policy certainty. Muller concluded: “The new Minister of Energy, Tina JoematPettersson, has a mountain to climb, and it is suggested that adequate support urgently be provided to her to efficiently perform her role. This support will translate into a message of political and economic stability sent to the rest of the investing world.”
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