This is the first Sustainable Energy Watch report for South Africa, and the first attempt at a common set of energy sustainability indicators for the country. Within the limits of time and data availability, estimates have been developed for seven of the eight indicators, and 1990 benchmarks are also included for three of the indicators. For each of these indicators, the value of 1 is either the global average or the historical trend for South Africa, while the value of 0 is the sustainability target.

South Africa is the closet to the sustainability target on the indicators for access to electricity (0.34) and resilience to external impacts (energy exports) (0.09). The former reflects the success of the ambitious mass electrification, which has been on the key social and economic goals for the democratic government. Government commitment to continue this programme, and provide substantial funding for it, bodes well for continued improvements in this indicator.

The low value for resilience to external impacts (energy exports) may be somewhat misleading, however. While it is true that South Africa is not as vulnerable to international energy markets as the OPEC countries, there is significant concern in the country about how the implementation of the Kyoto Protocol will affect the coal industry, and the 61 000 workers that it employs. In fact, a report from the International Energy Agency suggests that South Africa may be the most vulnerable fossil fuel exporting country in the world to the impacts of the Kyoto Protocol. South Africa will have to drop well below 0.09 on this indicator therefore, before it is less vulnerable to external impacts. South Africa performs worst on the indicators for carbon emissions per capita (2.47) and energy intensity (2.26). The reasons for the energy intensity of the economy are described in more detail in the body of this paper, and include heavy reliance on energy intensive industries for domestic production and export, high dependence on coal for primary energy, higher energy intensity of synthetic petrol made from coal, low energy prices and the poor energy efficiency of individual sectors. Continued high energy intensity is potentially a competitive disadvantage for the South African economy, because it can increase the cost of production (even considering the relatively low energy prices in South Africa). High carbon emissions intensity makes South Africa increasingly vulnerable to pressure to take on some kind of commitment within United Nations climate change negotiations process. Although South Africa is still classified as a developing country, its emissions per capita and per unit of GDP are considerably higher than most developing countries. On the other hand, this emissions intensity makes South Africa an attractive candidate for Clean Development Mechanism international investment projects, which could help to move the country onto a lower emissions intensity path. Nevertheless, government policy is urgently needed that address carbon emissions intensity in way that also promotes development - for example, through stimulating large scale investment in cost-effective energy efficiency and diversifying South Africa's energy mix. Investment in clean energy is only beginning in South Africa, so this indicator is also still quite high (0.99). As discussed in this paper, there are positive signs of both pubic and private sector commitment to increase investment in renewable energy and energy efficiency. The challenge is to maintain these goals through the restructuring of the energy industry - particularly the electricity industry - so that restructuring does not spell the end of clean energy. The indicator for renewable energy deployment (1.04) also reflects the long road ahead of South Africa in developing renewable energy sources - and challenge to move beyond seeing these only as solutions to remote area energy problems. Finally, while the indicator for local pollution remains high (0.85), the significant improvement since 1990 is encouraging. In summary, the political commitments of the post-apartheid South African government recognise the importance of equity in access to affordable energy. Progress in this important area of sustainability is a major accomplishment. The new South Africa, however, is full of legacies from the old - including the energy intensive economic structure and reliance on abundant domestic coal. This poses a major challenge to policy makers, industry, and civil society. New policy documents recognise the importance of these issues, but progress 'on the ground' has been slow, and there are, at the same time, conflicting policies that push South Africa away from sustainability. Our hope is that these indicators, and the discussion of their implications, will provide an useful starting point for stakeholders to debate South Africa's future, and how co-ordinated policy and concrete action can create a more sustainable energy sector that supports the development and welfare of all South Africans. Note: The Clean Development Mechanism under the Kyoto Protocol to the UN Framework Convention on Climate Change allows industrialised countries to invest in project in developing countries that reduce greenhouse gas emissions, and claim part of the credit for these reductions against the industrialised countries' emissions limitation targets.