Energy is fundamental for South Africa’s social and economic development. The energy sector contributes about 15% of South Africa’s Gross Domestic Product (GDP) and employs more than 250 000 people. The economy is highly energy intensive and is dominated by mining and primary processing, metal smelting and synfuel production.
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Energy consumption in South Africa is dominated by industry at 42%, comprising mining, iron and steel, other metals, chemicals, pulp and paper, food, tobacco, etc. Growth in this sector is inevitable and driven by international competition. The transport sector is the next largest energy consumer and mainly uses liquid fuels. Land passenger transport is the largest, followed by land freight and then air transport. Although the commercial sector, which includes financial services, IT, retail, tourism and education, consumes a smaller quantity of energy, the opportunities for energy efficiency are large, particularly in buildings. The agriculture sector includes large modern farms as well as small subsistence farmers. Most energy comes from diesel for modern farming and vegetable wastes for subsistence farms. Finally, the residential sector includes households, which rely on electricity and traditional energy such as wood fuel, dung and paraffin. The Government is committed to improving the level of access to electricity through its support to the National Electrification Programme. In January 2004, the government created the Energy Development Corporation (EDC) within the CEF group of companies (www.cef.org.za). The EDC supports the development of modern renewable energy and energy efficiency projects, especially in markets where there is insufficient private sector activity. A number of projects and initiatives are underway, including a low-smoke fuel project, solar water heating, hydropower and biodiesel. The government is looking into supporting and subsidising renewable energy investments (Source: South Africa Energy Profile 2003)