Unclear policy a risk to funding
• Lack of alignment on the closure of Eskom’s coal-fired power stations
The lack of policy alignment on the closure of Eskom’s coal-fired power stations risks undermining SA’s efforts to mobilise the funds needed to implement its just energy transition plans.
This is according to two of SA’s influential environmental justice activist groupings — the Life After Coal campaign and the Fair Finance Coalition SA.
Both have expressed alarm over recent comments by electricity minister Kgosientsho Ramokgopa on extending the life of coal-fired power plants beyond Eskom’s decommissioning schedule.
In a submission to the presidential climate commission (PCC) ahead of a national colloquium planned for Friday to review its recommendations to the government on national electricity planning, the two groups said that the government’s “competing and incoherent plans and policies on energy” had the potential to severely undermine the R1.5-trillion Just Energy Transition Investment Plan (JET-IP) for which financing still had to be secured.
It also risked jeopardising existing funding agreements, such as the $8.5bn committed to support decarbonisation of SA’s energy sector by developed nations through the Just Energy Transition Partnership (JETP).
“The policy incoherence is terribly dangerous. It impacts on SA’s reputation and brings into question our intentions. It almost makes it look as if we want everything — we want to keep the coal lobby happy, but also keep the climate finance,” said Brandon Abdinor, climate advocacy lawyer at the Centre for Environmental Rights, which is a member of the Life After Coal campaign and the Fair Finance Coalition.
During a recent tour of Eskom’s power stations, Ramokgopa told workers at power stations such as Grootvlei and Tutuka that consideration had to be given to extending the life of these plants given the electricity crisis.
Eskom’s own plans and the Integrated Resources Plan of 2019 anticipated the decommissioning of about 22,000MW of electricity from coal generation (about half of Eskom’s installed capacity) by 2035.
In the short term these plans included that Hendrina, Camden and Grootvlei power stations, with combined capacity of about 4,700MW, would be shut down on a piecemeal basis over the next five years.
But, according to Ramokgopa, the ageing power stations need investment to refurbish them to improve their performance and prolong their lifespans. He said at a media briefing last week that shutting
down old power stations at the current anticipated rate rather than refurbishing them to extend their lifespans would remove badly needed megawatts from the grid and worsen the loadshedding crisis.
According to the Centre for Environmental Rights, the minister’s comments could undermine the JET-IP and efforts to mobilise the required finance.
The $8.5bn that has been pledged through SA’s JETP with the US, EU, France, Germany and the UK was almost exclusively targeted towards decarbonisation, and often more specifically towards the transition away from coal, said Abdinor. “A signal like this [a minister saying that the decommissioning of coal power station will be delayed] would really bring SA’s good faith into question because it is basically going in the opposite direction of what [the JETP] is trying to achieve.”
Veering away from the planned decommissioning of coal power stations would also seriously 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 350million tonnes to 420-million tonnes of carbon dioxideequivalent by 2030 — a reduction of about 20%-33% from current emissions.
In the absence of an Integrated Energy Plan — which should have been produced more than a decade ago under section 6 of the National Energy Act of 2008 to provide overarching guidance for energy planning — SA was left “floundering around” as the government tried to contend with “competing agendas”.
In their submission to the PCC, the Life After Coal campaign and the Fair Finance Coalition SA also criticised the JETIP’s focus on establishing a green hydrogen economy in SA. The two groups said it appeared that the JET-IP had made an assumption that there will be a “trickle-down effect” from investment in the private sector and large infrastructure projects, such as in the green hydrogen economy.
“This is a dangerous assumption and should be thoroughly examined. What is clear from engagement with communities and an assessment of reports on social protection and social investment measures is that small, local investments in environmentally sustainable projects should occupy much greater focus in the JET-IP,” they said in their submission to the PCC.
The JET-IP has three priority areas: electricity, new energy vehicles and green hydrogen, and the bulk of the R1.5-trillion, about 80%, is earmarked for the transition and development of these industries, and R320bn (20% of the total funding requirement) is set aside for the development of the green hydrogen economy.
In contrast, the plan allocates about R2.7bn (less than 1%) towards skills development.
According to Abdinor, the prominence of green hydrogen is not justified as it will primarily serve the speculative plans of major emitters and it was not required for electricity decarbonisation.
Green hydrogen provides a low-carbon fuel source, which has the potential to play a role in reducing carbon emissions in the manufacturing of steel, for example. But that is far into the future, he said.
“Our electricity system is the one we really need to focus on, and green hydrogen does not really support that at all. We should be taking this initial climate finance from the JETP and use that to achieve the most important things we need to do to address the electricity crisis such as investing in renewable energy and upgrading our transmission infrastructure.”