Barbara Creecy, the minister of forestry, fisheries & environmental affairs (MFFEA), says SA will need to turn sunshine into oil if it wants to decarbonise its economy.
Moreover, she says that may be critical to the country’s ability to retain access to lucrative export markets like the EU, which are increasingly looking at restricting imports from carbon-intensive economies. However, Creecy says SA has unique competitive advantages to facilitate the transition to renewable energy due to its inherent abundance of solar- and windpower generating opportunities, which, if harnessed correctly, could result in a net gain of 300,000 jobs.
“SA is one of the top ten sunniest countries in the world, so it’s a no-brainer that we should be expanding our solar infrastructure. We also have significant wind,” Creecy said at the 2022 Standard Bank Climate Summit in Johannesburg on Tuesday. “We also have a very interesting advantage ... in terms of green hydrogen. Through Sasol, we have this Fischer-Tropsch technology, which enables us to convert carbon into a liquid fuel. This technology, which is SA-owned IP [intellectual property], is very significant because it allows the potential for the development of a green liquid fuel and if we can do that, we would essentially be turning sunshine into oil.”
The race is on
Creecy warned that Egypt and Morocco are already positioning themselves to capitalise on Europe’s increasing embrace of green hydrogen as a fuel source to reduce its reliance on Russian gas in the wake of the Ukraine war. The North African countries’ have a locational advantage due to their proximity to Europe, which allows them to run pipelines directly into the continent.
“The current energy crisis in Europe is leading them to say they are going to skip the gas phase and go straight to green hydrogen,” said Creecy. “We need to get into this race.”
She also revealed that SA plans to unveil details in November on the country’s investment plan to access the $8.5bn financing pledge by the UK, the US, Germany, France and the EU that will be used to facilitate the country’s energy transition.
Creecy says the investment plan, which will be revealed at the 27th Conference of the Parties of the UNFCCC (COP 27) in Egypt next month, will focus on Eskom’s energy transition; the feasibility of evolving of the country’s car-manufacturing industry to electric-vehicle (EV) production; and SA’s own green hydrogen technology. She said government had also been working on providing more detail on the form loans would take as well as the concessions that would have to be made without worsening the country’s fiscal debt load.
Eskom and hence SA will be a very substantial consumer of coal for a very long period of time.
— Eskom CEO André de Ruyter
Creecy said the bulk of the investment plan required to gain access to the $8.5bn financing pledge from developed nations would focus on repurposing as many as 10 Eskom plants that are facing retirement. The plan would involve replacing them with solar, wind and gas-fired alternatives while the feasibility of replacing combustion-fired engines for cars manufactured in SA with alternative electric systems would also be high on the agenda.
“This investment plan is currently in the cabinet’s system for consideration because this clearly would be something that we would want to launch at COP 27” said Creecy. “The investment plan, once it’s launched at COP 27, will be released for public comment this year.”
Eskom CEO André de Ruyter, who also spoke at the 2022 Standard Bank Climate Summit, said while the energy transition was “inevitable”, SA’s power challenges should not be viewed in binary terms of coal vs renewables. While coal will be used for a long time to produce baseload power in SA, the long-term solution to energy security was renewable power as it can be rapidly and more cheaply deployed than coal or gas-fired options.
“Eskom and hence SA will be a very substantial consumer of coal for a very long period of time,” de Ruyter said in a panel discussion. “So, the notion that we will somehow succumb to pressure from the Global North to sterilise all of our natural resources to satisfy pressure from international lenders is simply not substantiated by the facts.”
“[But] if we act smartly, we can leverage concessional financing that is available ... and enable ourselves to pivot to a cleaner, greener future at the same time as growing our economy and creating jobs,” he added. “The energy transition is inevitable. You just cannot hold back this wave with your bare hands.”
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