South Africa secures R131-billion in pledges to kick-start energy transition
The plan is to decommission Eskom’s coal-fired power stations and repurpose them for renewable energy
Negotiating with and lobbying developed countries to meet their commitments in assisting developing countries to reduce carbon emission and global warming at the United Nations Climate Change Conference (COP26) in Glasgow, Scotland is at the top of South Africa’s agenda.
Barbara Creecy, Minister of Forestry, Fisheries and the Environment, is leading a high-powered South African delegation at the summit and they have already achieved positive results.
South Africa has secured R131-billion in pledges over three to five years from the European Union, Germany, France, the UK and the US, who have committed to support the country in its transition to clean, renewable energy. The plan is to decommission Eskom’s coal-fired power stations and repurpose them for renewable energy.
The funding will take the form of grants, concessional loans, investment and risk-sharing instruments, as well as mobilising the private sector to reduce emissions, develop electric vehicles and implement green hydrogen.
Celebrating the partnership, President Cyril Ramaphosa said: “Climate change is an existential challenge that confronts us all, and South Africa is committed to playing its part in reducing global emissions. The partnership that we have established is a watershed moment not only for our own just transition, but for the world as a whole. It is proof that we can take ambitious climate action while increasing our energy security, creating jobs and harnessing new opportunities for investment, with support from developed economies.”
In a broader sense, Creecy says the Glasgow outcome has to be a package deal that advances the negotiations and all three aspects of the Paris Agreement, namely mitigation, adaptation, and the means of implementation of climate action.
For almost three decades, governments across the globe have met nearly every year to forge a global response to the climate emergency. Under the 1992 United Nations Framework Convention on Climate Change (UNFCCC), every country is treatybound to “avoid dangerous climate change” and to find ways to reduce greenhouse gas emissions globally in an equitable way.
Over the years, the summit has swung between fractious and soporific, interspersed with moments of high drama, occasional triumph (the Paris agreement in 2015) and disaster (Copenhagen in 2009).
The COP26 summit was postponed by a year due to Covid-19 and is being viewed by many as pivotal to saving the planet from the continued negative effects of climate change. It aims to curb emissions, negotiate how best to ensure global average temperature increases stay below 1.5°C, reduce coal use, establish rules for a global carbon market, and raise billions in climate finance.
Temperatures around the world are about 1.1 – 1.2°C above pre-industrial levels, and greenhouse gas emissions are still on an upward trend. Carbon dioxide output plunged globally during the Covid-19 lockdowns last year, but this was temporary and has begun to surge as economies recover. To stay within the 1.5°C goal, global emissions need to come down by about 7% a year for this decade.
Since the Paris Accord in 2015, scientists have issued increasingly urgent warnings that the goal of 1.5°C is slipping out of reach. To meet this target, global emissions must decline 45% by 2030 from 2010 levels and reach net zero by 2050. This requires enormous changes to countries’ transport systems, energy production, manufacturing, and farming.
Creecy said that as part of a $2.5-million (R38.5 million) allocation from the Clean Technology Fund, South Africa secured $1-million (R15.4-million) to develop a just transition investment plan.
“The focus of this investment plan is the Eskom energy transition, including the repowering and repurposing of retiring coal plants and investment in new low carbon generation capacity.
“We hope to use the informal side meetings that take place at COP26 to generate further interest in supporting the country’s Just Transition to a low carbon economy and climate-resilient society,” Creecy said.
The Green Climate Fund, which aims to respond to and invest in climate-resilient developments, is skewed towards mitigation efforts, which limits adaptation efforts and has received less than $5.5-billion (R84.6-billion) a year between 2014 and 2018.
She said there would be discussions with the global Climate Investment Funds (CIF) to broker a deal that could release up to $500-million (R7.7billion) to fund a shift away from coal-fired power.
“We see the decision by the CIF as a small but important first step towards laying the foundation for ... our just transition,” she said.
More than 10 years ago, developed nations pledged that by 2020 they would raise $100-billion (R1.5-trillion) each year to assist developing nations transition to cleaner energy.
The pledge has not been met and developing countries are increasingly frustrated with the feeling of not being taken seriously and being set up for failure in meeting their own commitments to reduce global gas emissions.
South Africa produces more than three-quarters of its electricity and more than a quarter of its liquid
fuels for transport from coal, making it the world’s 12th-largest greenhouse gas emitter and fourth most carbon-intensive economy.
According to the Organisation for Economic Co-operation and Development, the total global climate finance was $79.6-billion (R1.2-trillion) in 2019, an increase of just 2% from 2018.
Creecy said it was important that developing and developed nations re-establish trust between them by ensuring that financial commitments are honoured, adding that the promise of $100-billion (R1.5-trillion) a year needed to be increased to $750-billion (R11.5-trillion) a year after 2025.
The conference needed to secure more “ambitious pledges” to further cut emissions, lock in billions in climate finance and complete the rules to implement the Paris Agreement with the
unanimous consent of the nearly 200 signatories.
Economic pressures and travel bans due to Covid-19 have exacerbated the divide between wealthier and poorer nations, and has meant that some representatives cannot attend COP26.
This has meant that the conference is not well attended and already the United Nations, the UK and the US have conceded that COP26 will not achieve its goals.
One of the key issues now is to ensure that the talks run smoothly. COP15 in Copenhagen (2009) was widely perceived as a failure, although it produced a partial agreement that became the foundation for Paris. The hope is that, obvious COP26 challenges aside, a clear road map will be drawn up that can keep the world from exceeding the 1.5°C goal.
Ramaphosa last month unveiled the new line of vehicles from Japanese auto manufacturing giant Toyota at the Prospecton plant south of Durban in Kwazulu-natal. The newly-launched production line includes a hybrid model, the Corolla Cross, which is fuel and battery operated and will be exported to 40 countries across Africa.
“We have called on leaders of developed economies to support South Africa’s efforts to green our economy and to address our very ambitious climate change goals through equally ambitious grant and concessional funding support. We have identified three key priorities for climate action,” Ramaphosa said.
He said the government will also focus on reducing Eskom’s carbon emissions to accelerate plans for a green-hydrogen economy. Eskom is hoping to unlock about R150-billion in green financing from international development agencies to finance a transition from coal to renewable energy.
The state-owned entity is pursuing a Just Energy Transition (JET) strategy to accelerate the repurposing and repowering of power stations to grow renewable energy in line with the Integrated Resource Plan of 2019. Eskom is the country’s largest greenhouse gas emitter and has committed in principle to netzero carbon emission by 2050, which means shutting down its coal-fired power stations.
Change is coming in other sectors too. Sasol recently announced a first-of-its-kind memorandum of agreement with the Northern Cape government to conduct a two-year feasibility study for a landmark green hydrogen project in Boegoebaai.
Priscillah Mabelane, Sasol’s vice-president for Energy Business, said this project could potentially produce at least 400kt of hydrogen every year. The project underpins the province’s Green Hydrogen strategy, a precursor to the country’s Green Hydrogen strategy.
“A project of this magnitude has the potential to create up to 6 000 direct jobs, generating much needed socioeconomic benefits, including creating further indirect jobs across the ecosystem. We are very excited to be leading this feasibility study as part of unlocking South Africa’s ambition to be a global green hydrogen export player,” she said.
The move towards the use of hydrogen — which only emits water vapour when used — has been globally hampered by the need to burn fossil fuels when extracting it.
COP26 is a critical pivot point for South African businesses, which operate in an economy that is one of the most coaldependent in the world. The Climate Change Bill demonstrates South Africa’s commitment to Carbon Tax and so does its move towards raising to 100MW the embedded generation threshold.
According to surveys, the Organisation for Economic Co-operation and Development says that the impact of Covid-19 has had some positive results. The pandemic has raised the public consciousness and the idea that our lives and the planet’s are precious. This has led to the integration of environmental and inclusiveness views into recovery and stimulus measures, allowing countries to meet their
environmental goals and commitments as they continue to grow.