ANC top brass endorsed a proposal to delay the shutdown of Eskom’s coal-fired power stations on Monday, a political victory for electricity minister Kgosientsho Ramokgopa that has the potential to throw a spanner in the works for SA’s climate change commitments.
The ANC’s national executive committee rallied behind Ramokgopa at its four-day strategy meeting, which concluded on Monday. The committee’s decisions are traditionally converted into government policy.
“As we prioritise ending load-shedding, we will need to revisit our decommissioning schedule to balance energy security and our climate commitments,” said President Cyril Ramaphosa, who is under pressure to end rolling power cuts that have frustrated businesses and society.
Without mentioning how the shutdown schedule will be revised, he justified the decision in his closing remarks to the national executive committee, saying that other countries that have faced similar energy supply challenges either recommissioned or extended the lifespan of their coal power plants.
The proposal to extend the life of Eskom’s coal-fired plants is championed by Ramokgopa, who presented his long and short-term plans to manage the power crisis to the ANC’s national working committee and the cabinet.
However, the cabinet did not endorse the plan and rather referred Ramokgopa to the national energy crisis committee — a body set up in 2022 by Ramaphosa to tackle load-shedding — for concurrence.
Eskom’s coal plants are poorly maintained and prone to breakdown, forcing the utility to impose various levels of load-shedding within a short period of time and with short notice.
Still, extending the lifespan of the plants could jeopardise SA’s ability to secure financing for its just energy transition (JET) programme. The idea has also drawn criticism from environmental activists and Business Unity SA, an influential business lobby group, which said last week that SA risked being left behind if it backtracked on its commitments.
The Integrated Resource Plan 2019 defines SA’s energy transition path until 2030, mandating the decommissioning of about 12GW of coal-fired power by 2030 and the expansion of 18GW of private sector-led renewables in that time frame.
SA’s ambitious, revised nationally determined contribution, through which the country committed to cut carbon emissions 20%- 33% by 2030, served as the basis for a funding agreement worth $8.5bn with rich nations at COP26.
The Just Energy Transition Partnership (JETP) between SA and the international partner group — France, Germany, the UK, US and EU — is almost exclusively targeted towards decarbonisation in SA’s energy sector as set out in the Integrated Resource Plan 2019.
About $2.5bn of the $8.5bn JETP funds will come from the multilateral climate finance institution Climate Investment Funds in the form of $500m in grant and concessional loan financing that will be leveraged to obtain a further $2bn in concessional loans.
SA has committed to reducing its carbon emissions by 2030. Ramaphosa said despite planning to extend the life of the coal power plants, SA remained committed to reducing greenhouse gas emissions.
“We must also protect jobs in sectors of our economy which have to decarbonise in order to remain globally competitive. However, the manner in which these plans are implemented must not compromise our national interest such as energy security or the immediate priority such as ending load-shedding,” Ramaphosa said.
Extending the lifespan of the coal plants comes as the government faces mounting pressure to resolve the energy crisis, infrastructure bottlenecks and rising unemployment.
The SA economy is battling slow growth with the IMF cutting its growth forecast for the country to just 0.1% because of electricity shortages. The Bank expects growth of 0.2%.
It also comes at least 15 months ahead of what is billed to be the toughest general election yet for the ANC, which is polled to lose its electoral majority
for the first time since the dawn of democracy.
The prospect of poor performance in next year’s polls has raised fears among some analysts that the ruling party will adopt populist economic policies to attract votes.
But the party’s head of policy and research Febe Potgieter disagreed. “This is our seventh election and we have been very consistent about not running populist election campaigns,” Potgieter said on the sidelines of the national executive committee meeting.
The government buckled to pressure from labour unions earlier this year when it agreed to implement a 7.5% wage hike for 1.3-million public servants — possibly undermining the Treasury’s budget commitments.
The 7.5% wage offer is set to increase the R690bn public sector wage bill to more than R741bn. The Treasury had pencilled in average annual growth of 1.6% in salaries for 2023/24.
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