News yesterday that one of the world’s biggest aluminium companies, Norsk Hydro, is to phase out its battery materials and green hydrogen businesses, will have been met with not a few fist pumps in fossil fuel boardrooms around the world, including here in SA.
The Norwegian giant was also an enthusiastic investor in Northvolt, a battery manufacturer born of an ambition to create a European giant in the business. Billions of euros and dollars went into Northvolt. BMW and Volkswagen became shareholders, VW investing nearly $1bn before it began to collapse earlier this year. Northvolt is now in chapter 11 bankruptcy proceedings in the US.
The foundering of large renewables projects is symptomatic of our time. In the industrialised West the tide is turning against energy sources such as solar and wind. COP29, the world’s premier climate change conference, has just ended in failure in Azerbaijan. In the US, incoming president Donald Trump will take his country out of the Paris Agreement on global warming, insisting there is no such thing. He is promising to incentivise the development of more oil and gas production.
In SA, mineral & petroleum resources minister Gwede Mantashe is doggedly pursuing the creation here of a sizeable oil and gas industry, with little sign of official dissent. So profound is the rupture in the spread of climate change technology in the West that not even the prospect of expensive new natural gas infrastructure becoming quickly stranded seems a worry any more.
Electricity and energy minister Kgosientsho Ramokgopa is this week pressing ahead with consultations ahead of approving a new Integrated Resource Plan, which will guide SA energy policy in the medium term. The rate of coal plant closure envisaged in the 2019 plan, hastily put together by Mantashe, will slow sharply and commitments to wind and solar will now be joined by bold new commitments to natural gas and nuclear, in the form of small modular reactors.
Left out?
In a sense the left, to probably misdescribe the vanguard of the global and domestic movements towards zero carbon emissions, may need to look at itself as the project stumbles. Has it been too precious, too smug, too contemptuous of voices asking for more time, for less haste?
I have a podcast out this week on the Financial Mail online with the chair of Eskom, the remarkable Mteto Nyati, in which he says it has seemed to him over the years that the rush for renewables was a thing subtly used by whites to gang up on a black government. And now that Trump is coming back it will become easier for whites to adapt to energy and economic reality. That was hard to hear, partly because I suspect there’s more than a grain of truth in it.
Of course there are lots of ways to respond to that. I’ve been a big supporter of the push for zero emissions not because I’m affected but because the sooner SA gets there the quicker we can make all our exports green, and the competitive advantage of that cannot be underestimated. To live and grow we must export.
I’m also enthusiastic about nuclear power here, particularly in the form of small modular reactors which, in theory, can easily be scaled up. Eskom was working on one itself, the pebble-bed reactor, before abandoning it in 2011. Many of the scientists working on that project are now perfecting it in the US, and it wouldn’t surprise me to see one or more pebble-bed modular reactors in SA, funded by the private sector, in the next decade or two.
Nuclear option
Ignore the scare stories — if you can put a nuclear reactor into a submarine and shake it around in rough seas, you can put one at Koeberg or Kusile and power Khayelitsha or Kempton Park. The questions are, how much?, and, who pays?
As for gas, we will see who pays. What is important though is that the renewables project isn’t left idle. No-one in their right mind doubts that renewable energy is the way of the future. There are debates now about the variable availability of wind or solar power, but battery technology and nuclear power will solve those questions decisively.
And as the Europeans, and the Germans particularly, fret about gas and the way the Russian invasion of Ukraine exposed their dependence on Russian gas, becoming dependent all over again on new sources of gas will not cut it.
A political and industrial realignment is under way in Europe, and when it settles it’s unlikely to be about the centrality of fossil fuels to the future. The Chinese, who have a captured internal market of more than 1-billion consumers to practise on, completely own the renewable power business and are installing the wind and solar equivalent of five nuclear power stations every week, according to the Australian Broadcasting Corporation.
They are also swamping the European car market with electric vehicles while the likes of VW, too slow and too expensive, threaten to shut down auto plants in Germany itself. Across the Atlantic though, Elon Musk rides into a far right-wing Trump government still championing emissions-free transport from inside an administration that will be a direct threat to the fight against global warming.
It may not add up now, but it will. In time clean energy will become a big-government project. It starts in China but the global right will embrace it when they can make money out of it and when they own it.
That is perfectly foreseeable. Climate change can’t be wished away, and when flash floods and sudden droughts begin to undo conservative governments in rich countries they will quickly go green. The Chinese are already mitigating the inevitable. We just have to wait a while for the Americans.
• Bruce is a former editor of Business Day and the Financial Mail.
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