Sa's Best Defence Against Trump-era Energy Shifts Lies In Local Renewables

Re-election of US President Donald Trump could have implications for South Africas energy sector as his administrations policies are likely to disrupt global fuel markets, reshape South Africas export landscape and contribute to a surge in carbon emissions worldwide. South Africas best defence is to expand local renewable energy, particularly small-scale solar.

Increased adoption of renewables, especially through locally controlled small-scale solar, would be the most effective response to market volatility anticipated under Trumps policies, says Andrew Lawrence , Senior Lecturer at the African Energy Leadership Centre. By expanding renewable energy capacity, South Africa could reduce its reliance on imported fuels, stimulate local industries and job creation and build resilience against external economic shocks.

Energy costs are significant determinants of inflation as well as interest and growth rates. By building a robust, green energy sector from within, South Africa can secure its energy security and climate resilience well into the future, says Lawrence.

President Trumps America First agenda, promising steep tariffs, could impact South Africas economy. Protectionist policies could increase the cost of financing debt and reduce demand for South African exports. Lawrence says President Trump and the Republicans opposition to the African Growth and Opportunity Act AGOA and their general stance on Africa raises the risk that AGOA could be terminated a move that could harm US-South Africa trade relations. Fuels, oils and distillation products South Africas second-largest export category to the US would be particularly hard hit by AGOAs termination.

Although economic volatility poses risks, it could reduce South Africas import costs and relieve inflationary pressures. Additionally, a weak dollar and higher US tariffs on China could redirect Chinese investment to South Africa, potentially benefiting the energy sector, Lawrence says.

President Trump withdrew the US from the Paris Agreement in 2017 and is expected to do so again, states Lawrence. With substantial support from the fossil fuel industry, he has pledged to roll back regulations to encourage greater fossil fuel production and lower energy prices. He has also committed to repealing former US President Joe Bidens Inflation Reduction Act the primary US legislation promoting green industrial policy.

These actions could undermine international climate funding, including support for South Africas own energy transition efforts. Experts predict that ramped-up fossil fuel use under Trumps policies could add as much as four billion tonnes of carbon emissions by 2030, causing over US900 billion in global climate damages that would disproportionately affect low- and middle-income countries, including South Africa, Lawrence says.

South Africas core energy priorities include expanding grid connectivity, promoting electric vehicles and public transit, increasing energy storage and advancing small-scale renewable energy generation. South Africas most reliable path forward lies in self-reliance and strategic international partnerships, particularly with China, says Lawrence. The countrys long-term stability and economic growth depend on the accelerated integration of renewable generation into the grid and the creation of mini-grids and off-grid solutions for rural areas. These steps are crucial for enhancing energy security and climate resilience and addressing critical national and regional security goals such as food and water security while reducing energy costs.

Clean energy collaboration between the US and South Africa will likely be limited as the US is not a dominant player in global clean energy markets. By contrast, China holds strong positions in the wind and solar energy value chains, offering considerable potential for partnerships with South Africa, according to Lawrence. Although there is some bipartisan support in the US for promoting African growth and trade, Africa-China trade volumes are six times those with the US. Therefore, strengthening trade relations with China and expanding regional collaboration are likely to be more advantageous for South Africas energy transition.