SA’S transition to renewables needs public and private ownership if it’s to be successful
- Imraan Valodia
The climate transition is often framed as a technical, scientific or financial challenge – about how we develop technologies to address climate change, or mobilise the enormous financial resources required for the transition.
But at its core, climate change is fundamentally a human issue. It is about how societies reorganise economic and social life within the limits imposed by our natural environment. One key dimension of this human challenge is ownership.
There is a persistent assumption in public debates that private investment must dominate renewable energy. In South Africa, the failures of many state-owned enterprises have reinforced this narrative. Yet international experience suggests something rather different: in many successful economies, public, cooperative and community ownership is not the exception, but an important feature of key sectors, including energy.
Take Switzerland. Its economy is often portrayed as a model of market capitalism, yet some of its most important firms are not privately owned in the conventional sense. The country’s two largest retailers, Migros and Coop, are both cooperatives owned by their members.
They are among the largest firms in Switzerland, with tens of billions of Swiss francs in annual turnover and tens of thousands of employees. Their significance lies not only in their scale, but in their governance structures, which embed social objectives within economic activity.
Importantly, this model extends into energy. Switzerland has a long tradition of cooperative utilities and hundreds of energy cooperatives involved in electricity generation and distribution.
Denmark, widely regarded as a global leader in renewable energy, provides an especially important example. The Danish transition was not built solely on large private firms. Instead, it was driven by deliberate policies that encouraged community and cooperative ownership of wind energy.
By the early 2000s, more than 100,000 Danish households were members of wind cooperatives that owned a substantial share of the country’s wind turbines.
The scale of participation mattered politically and socially. The well-known Middelgrunden offshore wind farm, near Copenhagen, was developed through a partnership between municipal authorities and a local cooperative, with thousands of citizens directly investing in the project.
This broad ownership base has gone hand in hand with extraordinary energy outcomes. Denmark is now among the world leaders in renewable electricity generation, with wind power playing a central role in its electricity system.
Denmark’s success reflects deliberate policy choices. Guaranteed grid access, feedin tariffs and tax incentives were designed not only to accelerate renewable energy deployment, but also to broaden ownership and public participation.
The lesson is clear. Public and collective ownership is not necessarily a constraint on efficiency. In many contexts, it has strengthened both the pace of renewable energy deployment and public support for the transition. These investments are also highly efficient.
For South Africa, the implications are profound. We enter the energy transition as one of the most unequal societies in the world. If ownership of renewable energy assets is concentrated among a narrow group of private investors, the transition risks deepening inequality. The emerging green economy could become another enclave: capital-intensive, exclusive and socially contested. And, importantly, it will lack legitimacy.
This is not an argument against private investment. Private capital will remain essential to financing the transition.
Rather, it is an argument for plural ownership structures. The international evidence suggests that the most successful transitions combine private investment with strong forms of public, municipal and cooperative ownership.
South Africa cannot afford a transition that is economically efficient but socially brittle. A just transition must be seen to be just, and it must deliver visible benefits to a broad spectrum of society.
We must build a renewable energy system that is not only clean, but shared. Who owns the assets of the future will help determine whether South Africa achieves a genuinely just transition, or merely a transition that reproduces and deepens existing inequalities.