Coal consumption is on the rise, so South Africa must kickstart renewables, analysts say

By David Whitehouse
Posted on Monday, 14 February 2022 17:27

Cooling towers are pictured at a coal-based power station owned by Eskom in Duhva
Cooling towers at a coal-based power station owned by state power utility Eskom in Duhva, South Africa, February 18, 2020. REUTERS/Mike Hutchings

Forecasts from the International Energy Agency (IEA) that South Africa’s coal consumption is set to increase show that not enough is being done to make the transition to renewable sources happen, analysts say.

The IEA’s global coal forecasts published in January show that South Africa’s coal consumption will be 2.7% higher in 2024 than in 2021. Part of that reflects the impact of Covid-19, as 2024 consumption will remain below the 2019 level.

A recovery to 2019 levels of output is being prevented by the withdrawal of major mining companies such as Anglo American and by cuts to planned domestic coal-fired power capacity, the IEA says.

South Africa is the world’s 12th-largest emitter of climate-warming gases, accounting for more than 90% of Africa’s coal consumption. The national electricity utility Eskom relies heavily on coal-fired plants, and South Africa in 2019 accounted for 3.6% of global coal production despite having just 0.4% of world GDP.

There is no reason for that to continue, as battery capacities improve and solar and wind power prices are falling every year, says Mike Roussow, an independent energy adviser in Johannesburg. South Africa has excellent resources for both kinds of energy, he says. “There are no excuses. It has to happen.” The country cannot afford to adopt nuclear power, he says. “South Africa has no choice. It has to transition, firstly to solar.”

  • Despite that, “dithering” in government policy is holding the transition back, he says.
  •  Money and manpower are being wasted on Eskom’s old coal plants, which should be shut, Roussow says. “There have to be hard discussions with the unions.”
  • Part of the problem is that unions only want jobs with state-owned entities, he says.
  • The government is “scared” of their reaction but needs to educate workers and explain the lack of better alternatives, Roussow says.

Retraining

South Africa is “particularly vulnerable to climate change and has limited ability to adapt,” says Emma Schuster, a climate risk analyst at Just Share in Cape Town.  The country needs to expedite the retirement of coal plants while building renewable-energy generation and transmission capacity, Shuster says. “The longer this build out of renewable energy infrastructure takes, the longer the country remains reliant on ageing coal assets,” she says.

Financing worth $8.5bn from the United States, the European Union and Britain can kickstart the process, Schuster says. The money must be spent transparently, rather than being used to subsidise “business as usual for big polluters, enrich politicians or corporate elites or for investment in new fossil fuels”, she says.

  • Schuster points to research by Meridian Economics showing that strategies to reduce South African emissions would mean only marginal costs compared with current policy.
  • South Africa could shut down all its coal by 2040 with a cost increase of just 2.5%, Meridian Economics says.
  • The shift away from coal need not create job losses, Roussow argues.
  • Older workers can be redeployed to the larger coal plants, while younger ones can be retrained for the solar industry, where many would be able to command higher salaries than in coal, he says.

The bottom line

Union acceptance will be key to redirecting South African workers away from coal and into renewables.

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