The Presidential Climate Commission, an independent body formed by President Cyril Ramaphosa to advise on climate change, says the decision to delay shutting down certain coal-fired power plants will “not collapse” South Africa's climate change commitments.
The commission’s executive director, Crispian Olver, told the sustainable finance forum in Sandton co-hosted by the International Finance Corporation’s and the Banking Association of South Africa that given South Africa ’s power crisis, pushing out the decommissioning of the Camden, Hendrina, Grootvlei and Kriel power stations out to 2030 was the right call.
The delay would not breach South Africa's Nationally Determined Contribution (NDC) commitments, measures for global targets set out in the Paris Agreement, he said. The commission is scheduled to publish a report on this next month.
“It is impossible to pull coal-fired power stations off the grid in the middle of a power crisis,” he said.
South Africa has not experienced load-shedding in April and May, the longest streak since 2021.
In the 2023 Integrated Resource Plan, a blueprint for South Africa's energy mix, the government said coal-fired power stations earmarked for closure before 2030 would be operated for longer than anticipated to cushion the impact of the power crisis.
Olver said the commission had learned lessons from the decommissioning of the Komati power station in Mpumalanga, which was shut down in 2022.
“We think the sequencing around Nkomati was back to front. They took a decision to decommission, then they started some half-hearted consultation, and then they did economic diversification. We want to reverse that; we want to start with the consultation, then the repurposing and diversification, and then deal with the power plants. That will push decommissioning deadlines out by five years. For us this decision is not a make or break, it is not going to collapse our climate commitments as a country.”
He said while the International Energy Association expects 80% of new generation capacity to come from renewable energy sources by 2030, coal plays a significant role in South Africa.
“We are a very coal-dependent economy, 80% of our power comes from burning coal. It is a big export [revenue] generator, we use it for our iron ore, steel, and aluminium industries. It is a big employer; we have 80,000 direct jobs in the coal economy”.
He said people were justifiably anxious about the transition because their jobs and livelihoods were at risk and South Africa was committed to a just transition.
It is impossible to pull coal-fired power stations off the grid in the middle of a power crisis
— Crispian Olver, Presidential Climate Commission executive director
“We are determined that as we make the transition we are also investing in our future workforce, investing in skills development, we are actively diversifying economies that are linked to these declining sectors and building out new clean energy, electric vehicles and green hydrogen into the economy. We are determined to put the social protection measures in place that cushion workers and communities as we move from one sector to another.”
As part of its efforts to address structural power constraints, the government has completely lifted the embedded generation cap, previously set at 10MW.
Olver said South Africa now has a pipeline of projects at various stages of development totalling about $20bn (R377bn). The government had a public procurement programme through independent power producers of another 10GW from wind, solar, some gas-fired peaking plants as well as battery plants. The establishment of a one-stop shop to register the projects had been key to addressing red tape.
“We had 135MW in 2021, it jumped to 1.6GW in 2022, and last year it was 4.5GW. On all the metrics, we are on an exponential curve in terms of the pace of our transition.”
Speaking on the sidelines of the conference, Bongi Kunene, MD of the Banking Association of South Africa, said the delay in shutting down coal-fired power stations was a “sensible approach”.
“If a plant still has life, do not switch off because the impact, particularly human impact on the communities and the economic spaces, is really big.”
She said South Africa's biggest trading partners would comply with their climate change commitments later than South Africa, with China expected to fully comply by 2060 and India by 2070.
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