The SA business community has urged the government not to “run away from the international move towards decarbonisation”.
Speaking in a panel discussion at the presidential climate commission’s national colloquium on SA’s long-term electricity planning and the just energy transition, Business Unity SA (Busa) environment, energy and climate manager Happy Khambule said the world was undergoing an energy transition, moving from high-carbon emission energy sources to low-emission alternatives.
Responding to claims by public enterprises minister Pravin Gordhan in the same panel discussion, Khambule said Europe’s increased use of coal in 2022 was “a temporary blip in the transition” as the region reduced its reliability on energy supply from Russia after that country’s invasion of Ukraine.
This did not mean EU countries had veered from their climate change targets. SA could not use this temporary situation as an excuse, he said. “SA cannot afford to backtrack [on its international climate commitments] because if we do that, we will become uncompetitive and we will be left behind.”
Gordhan accused Europe of shifting the goalposts of its own energy transition while dictating to SA the pace at which it should decarbonise. “There’s a new global reality arising from the war in Europe, and they’re quite comfortable making all sorts of zigzags in terms of their planning and the just transition, but they want to dictate how we should do things and meet their requirements,” he said.
“The reality is that the war [between Russia and Ukraine] has changed the energy scenario. It has changed the pathways ... we have to take that reality into account as we map out the just energy transition pathway in SA.”
Gordhan emphasised that as the country begins its transition, the reality of energy security must also come into sharp focus in both the short and long term.
“We need to, at all stages, continue to keep in mind how we are going to meet the energy requirements for both our citizens and small and big businesses. We need to take into account the current Eskom reality that it cannot seem to consistently produce more than 23,000MW, whereas the demand is closer to 30,000MW and beyond almost every single day during peak hours.”
Electricity minister Kgosientsho Ramokgopa ruffled feathers recently when he suggested extending the life of coal-fired power plants beyond Eskom’s decommissioning schedule as a means of tackling the electricity crisis.
Prolonging the life of these power stations would jeopardise SA’s ability to achieve its revised nationally determined contribution submitted at COP26. This saw SA commit to reduce carbon emissions to a target range of 350-million tonnes to 420-million tonnes of carbon dioxide-equivalent by 2030, a reduction of 20%-33% from emissions now.
Missing these targets will leave SA vulnerable to regulations the EU is implementing that will penalise exporters from high-emissions countries with the introduction of carbon border taxes that will be a trade barrier for SA exporters.
In draft recommendations for electricity planning, the presidential climate commission said it expected the Integrated Resources Plan of 2019 to be revised to promote about 50GW-60GW of variable renewable energy by 2030, supported by co-located storage, and 3GW-5GW of gas, but no new coal power. The commission said that even if there were no climate restrictions, such an energy mix would represent “a least cost electricity system”.
The IRP 2019 — which provides for 29,000MW of generation capacity to be added by 2030, including 1,500MW from coal, 3,000MW from gas or diesel and 20,000MW from solar and wind — was not aligned with SA’s revised nationally determined climate commitments. Also, the plan falls short of Eskom projections, which indicate that SA needs to add 50,000MW to 60,000MW of new generation capacity over the next decade to compensate for the 22,000MW of coal-fired generation capacity that will be retired by 2035.
The presidential climate commission’s draft recommendations also highlighted the critical need to invest in upgrading the transmission and distribution grids for which it would probably need to attract international support. The commission expressed concern in the draft report about SA’s future access to capital markets associated with slow climate action.
“Capital markets are increasingly concerned with climate change, and will not provide capital to industries that are not aligned with the requirements of climate science. This is evidenced by many SA lenders and banks having policies that prohibit investment in new coal,” the commission said.
According to Gordhan and forestry, fisheries & environment minister Barbara Creecy, developed nations had an obligation to finance just transitions in developing countries.
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