COP26: South Africa to receive $8.5bn to stop using coal

By Jaysim Hanspal
Posted on Wednesday, 10 November 2021 11:52

COP26 in Glasgow
Extinction Rebellion activists hold a banner during a protest outside the venue of the UN Climate Change Conference (COP26), in Glasgow, Scotland, Britain, November 8, 2021. REUTERS/Hannah McKay

In a revolutionary climate agreement, South Africa will receive $8.5bn from the US and European powers to help the country stop its coal usage. 

The country, which has traditionally been heavily reliant on fossil fuels, will receive the financial package over a ‘three-to-five-year period’.

South Africa now aims to decommission 34GW of coal-fired power capacity by 2030. It is predicted to account for roughly 40% of all new solar generation commissioned on the continent by the same year. The funds from the United States, France, Germany, and the UK will work alongside its Renewable Energy IPP Procurement Programme.

Coal power currently accounts for about 90% of the country’s electricity and is the single largest contributor to climate change.

In a statement at the UN Climate Change Conference (COP26), South African President Cyril Ramaphosa spoke about the importance of eradicating the use of high-emission fossil fuels. He said: “It requires substantial support for workers and communities throughout the coal value chain who stand to lose their jobs as well as their livelihoods.”

“A just transition requires finance and support from wealthier nations to enable low and medium-income countries to protect employment and to promote development,” he said.

Aurélien Lechevallier, France’s ambassador to South Africa said: “We are excited to make a significant commitment as part of this partnership with South Africa. We will work to ensure it supports the implementation of South Africa’s climate objectives through a sustainable and just transition, with a specific focus on the social impact on local communities.”

With an economy largely dependent on climate-sensitive sectors, such as agriculture and forestry, the country must use the funding to invest in technology that works against climate change.

The global push for change

This year, the Glasgow summit has prioritised the end of coal use, as many countries look to make substantial changes in all sectors before it is too late.

…end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances…

“This partnership comes at a time when our climate transition remains constrained by weak economic conditions, skill shortages, and a slim fiscal position,” said Vali Moosa, the deputy chairperson of the Presidential Commission on Climate Change.

At least 22 other countries made new commitments to phase out coal power, including Indonesia, Vietnam, Poland, South Korea, Egypt, Spain, Nepal, Singapore, Chile and Ukraine.

In a joint statement regarding the clean energy transition, countries and organisations, such as the East African Development Bank, promised to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances”.

Out of the frying pan…

According to the Global Carbon Atlas, South Africa is the 13th biggest CO2 polluter, emitting 452 metric tonnes of carbon dioxide in the past year. Coal power currently accounts for about 90% of the country’s electricity and is the single largest contributor to climate change.

The region has already been significantly impacted by climate change, with an increase in extreme temperatures and severe droughts, like Cape Town’s ‘Day Zero’ crisis in 2018. The multi-year drought impacted millions, forcing the city into strict measures and acting as a warning sign to many major cities at risk of running out of water in the future.

The government has faced criticism for refusing to tackle the impending crisis. In a government study seen by Reuters, results showed that more than 5,000 South Africans die annually in the nation’s coal belt because the government has failed to enforce air quality standards.

In cities like Johannesburg, air quality has been impacting locals for years. Air quality in the city means that people die three years earlier than in places with cleaner air (albeit dry), like Cape Town.

Last month, a study by the Centre for Research on Energy and Clean Air found that Eskom, the country’s state-owned energy company, has become “the world’s most polluting power company”. Data from the report found that Eskom is the largest global emitter of sulfur dioxide, surpassing the entire power sector emissions of any country in the world except India.

A renewable future

Whilst a thriving renewable energy sector may be on the horizon, some are not so confident about the sector’s future. The International Finance Corporation examined national commitments submitted by 21 emerging market countries as part of the Paris Agreement and found that they need $23trn in missing investment, if they are to achieve their targets by 2030.

However, Benjamin Sovacool, a researcher on the energy sector at Sussex University, believes this transition may open up South Africa to further corruption.

In his paper, Sovacool examines the possibility of further corruption due to the renewable market, as “early evidence suggests that despite their pro-environmental outcomes, many auction programmes and the projects that they facilitate have resulted in exclusionary and/or exploitative outcomes for those living in the national and local vicinity of these developments.”

Nobody in the community believes we can achieve full decarbonisation that quickly.

Sovacool says that in 2016, the South African Renewable Energy Council (SAREC) argued that the national utility Eskom was prone to corruption at the “highest level of government”, when it came to how renewable energy contracts were awarded, and the Office of the Public Protector published a report alleging improper and unethical conduct by President Jacob Zuma and other functionaries as well as the “improper and possibly corrupt award[ing] of state contacts and benefits”.

According to 350 Africa, a grassroots activist network in the fight against climate change, Eskom intends to try and secure about $10bn in international climate finance to accelerate its transition away from coal and decarbonise its energy system. This is in spite of the company’s plans to build about 4000MW of gas versus about 3000MW of renewable energy over the next five years.

In a statement reacting to the funding news, the organisation said: “We welcome the need to rescue Eskom from its precarious position”.

Nevertheless, the organisation advocates for orienteering the transition towards a “socially-owned electricity sector”.

For Sovacool, the decarbonisation goals set by COP26 are also highly unrealistic. “Nobody in the community believes we can achieve full decarbonisation that quickly. Most scenarios presume we reach decarbonisation by 2035 to 2050, or later if we allow for overshoot,” he tells The Africa Report. 

Nonetheless, Alex Lenferna, a climate activist for 350 Africa, believes that the pledge may be the start of tangible change. “For now I don’t think it’s fair to say this will just open South Africa up to more corruption. The international finance is likely to come up with some significant conditions of transparency and accountability, so [it] may (if done right) reduce corruption.”

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