The South African economy of the past benefited immensely from a combination of rich minerals and metals and low-cost coal-fired electricity.
The platform that gave rise to strong economic growth was referred to as South Africa’s minerals and energy complex.
Early plans coming out of government departments referred to the importance of continuing to develop this platform in the new democratic South Africa.
But the plans never reached fruition. Those promoting the idea would strategise but put little in place to give momentum to ensuring a competitive position for mining and power generation.
Mining shrunk and the management of Eskom was so appalling that the country is left with a bust State electricity utility and uncompetitive coal-based electricity tariffs.
Today, the world is cold-shouldering coal as an energy source and embracing sun energy and wind energy. South Africa is blessed with both of these renewable-energy sources and should revive the idea of using the minerals-energy complex to drive economic development, but, this time round, making use of low-cost renewable energy to replace coal-fired power.
The fact that there is no longer any doubt about renewable energy being the cheapest source of energy is a major advantage, but coming with that is the guarantee of clean power, which banks favour for funding.
These modern realities lower the risk of South Africa embracing the energy transition. Because of this country’s resource advantages in solar and wind, it needs to go the whole hog and enter the hydrogen age.
This means using renewable electricity to produce hydrogen from water and linking that hydrogen to platinum group metals (PGMs), another great South African endowment.
Use PGMs to catalyse fuel cells that can provide the electricity, heat and climate cleanliness for vehicles and homes and also take advantage of South Africa’s in-depth knowledge of Fischer-Tropsch technology, which has been perfected by Sasol and PetroSA.
But instead of using coal gasification, use hydrogen in the Fischer-Tropsch to produce carbon-neutral petrol, diesel and chemicals.
In this way, South Africa could fully embrace a twenty-first century energy transition, not only in electricity but also in mobility, heating and the production of clean power fuel.
As those proposing this have pointed out, an integrated policy vision is needed to realise this new-world vision and will require a combination of trade policy, industrial policy, energy policy and environmental and climate policy.
South Africa must be put firmly on a path of using low-cost solar and wind energy to restore its international competitiveness. Clean low-cost electricity electric vehicle production, hydrogen production, clean fuels and cost-competitive fertiliser and chemicals production – all of which could be for local and export markets.
For the wider economy, this has the potential to accelerate investment and employment and put the country on the global map as a standout modern performer.