The Development of the Biogas Industry in South Africa

Abstract

In recent years, the renewable energy sector of South Africa has seen significant growth, but the biogas industry has been lagging behind. In this research, barriers and opportunities for the South African biogas industry have been studied while taking into account the institutional context that is created by informal networks. The research methodology consists of literature review, interviews with stakeholders of the South African biogas industry and three case studies of biogas projects in South Africa. In order to identify the barriers and opportunities that exist for the South African biogas industry, both the internal environment and external environment of the industry were considered. The barriers internal to the biogas industry were structured and analysed using Strategic Niche Management theory, whereas the external environment and its impact on the biogas industry was analysed from a Multi-Level Perspective. The regime that was considered is the fossil fuel based electricity regime of South Africa. From the empirical research it follows that the most strongly perceived opportunity for the South African biogas industry lies in the country’s current energy crisis, which has created a window of opportunity for renewable energy technologies. Furthermore, opportunities are created for the biogas industry through the increased environmental awareness and this is for instance seen from green policies and measures taken by companies and government to reduce carbon emissions. Three main conclusions were drawn regarding the barriers for the South African biogas industry. Firstly Biogas projects in South Africa are currently often found to be insufficiently financially feasible. This relates to the costs involved in the project, market conditions and a lack of funding opportunities. Secondly, the regulatory framework is not conducive to the development of biogas projects and this is forming a major barrier. Finally, the network of the South African biogas industry is not sufficiently internally aligned. This relates to both a lack of alignment within the government regarding a suitable legislative process and a lack of alignment within the network as a whole regarding the expectations for the industry. This research also aimed to contribute to the academic body of knowledge by considering the impact of informal networks on Strategic Niche Management. While this could not be derived conclusively from the empirical research, informal networks were recognized throughout this research and several impacts on Strategic Niche Management can be argued. Firstly, aligning the niche network towards a joint effort will be complicated by the division that is created by informal networks. Secondly, selecting projects for support is not based solely on project viability and value to the niche development as social relationships play a role in the informal institutional context. This makes it difficult to control the selection process though policy and is likely to impede learning processes.