A new coalition authorities is grappling with the way to cut back the nation’s dependence on coal, however as Rob explains, there’s more likely to be loads of financial and political turmoil forward. — Malcolm
An ‘atomic bomb scenario’ for jobs: a South African coal plant’s failed repurposing
South Africa’s Komati Power Station — a 63-year-old plant nestled away within the coronary heart of the Mpumalanga province within the nation’s coal belt — supplies a cautionary tale of how the “just energy transition” can go badly awry in growing international locations.
This is a lesson that Dan Marokane, the chief government of South Africa’s energy utility Eskom, believes have to be absorbed by different growing nations planning their very own transition in direction of renewable energy.
In October 2022, South Africa’s authorities shut down Komati, which at its peak was twice the dimensions of every other within the nation, with a capability of 1,000 megawatts of electrical energy. The determination was consistent with its Just Energy Transition Investment Plan.
Heralded as one of many largest world “repurposing” tasks away from fossil fuels, the World Bank mobilised $497mn for the Komati undertaking, which aimed to transform it right into a renewable energy era website powered by 150MW of photo voltaic, 70MW of wind and 150MW of battery storage.
It was an unmitigated catastrophe, Marokane advised a convention in Cape Town organised by the Africa’s largest financial institution, Standard Bank, this month.
“If you look at the concentration of that power station in one municipal district, you literally create an atomic bomb scenario in terms of social discord,” mentioned Marokane, who has been within the job since March.
The city had been solely constructed across the plant, which supplied jobs to an estimated two-thirds of the residents at one level. Yet when Komati was “repurposed”, many had been left with out work in a rustic the place unemployment is already 32.9 per cent.
It additionally created a lot resentment locally, with one chief saying final 12 months that he believed the repurposing undertaking had been created to “plant poverty” within the space. Gwede Mantashe, the nation’s mining minister who has lengthy been an advocate of coal, had cited Komati for example of an “unjust energy transition”.
To guarantee this lesson gained wider world traction, Marokane mentioned Eskom led a World Bank group to Komati earlier this month “because we wanted them to have first-hand experience of what can go wrong if you don’t do the planning adequately”.
The World Bank group spoke on to folks in these communities, Marokane mentioned, who may “translate their experiences on the ground, and their fears”.
It was, he mentioned, a sobering expertise for the Washington-based funding establishment. “There is now no confusion about this. All of us are now aligned that we should not repeat Komati,” Marokane mentioned.
In November, South Africa’s presidential local weather fee launched a report detailing the teachings from Komati, discovering that the method to repurpose the plant “fell short of inclusive and participatory engagements” whereas higher “economic diversification plans” had been wanted.
“The truth is, the market for coal is going to phase out, and those who try to block planning for the future are undermining the livelihood of those workers who could be assisted in the transition,” he mentioned. “If we continue with a coal-dominated economy, we’ll be shut out of markets in Europe, Australia and even the US. We’ll cease to be an export country and we’ll lose all those jobs.”
Peter Venn, the chief government of Seriti Green, a renewables firm, mentioned South Africa wanted to make sure that the energy transition was actually “just”.
“There are hundreds of thousands of jobs in Mpumalanga, the energy heartland of South Africa, where if you shut down those coal stations magically tomorrow, those people wouldn’t have work,” he mentioned.
There was no means {that a} renewables plant would be capable to take up a coal plant shutting down, Venn mentioned. The comparability, he mentioned, was {that a} coal mine using 1,000 folks could possibly be changed by a wind farm using 50 folks. “We have a short window to fix this,” he mentioned, and should guarantee the best insurance policies had been in place, with correct planning for the transition.
Foreign funding ‘at risk’
There is extra at stake for South Africa. The most industrialised nation in Africa is a check case for the way the energy transition will play out on the continent, as the federal government has been given funding of billions of {dollars} primarily based on its simply transition plan.
At COP26 in 2021, the International Partners Group made up of France, Germany, the UK, US and EU agreed to offer the nation with financing of $8.5bn to “accelerate the decarbonisation of South Africa’s economy and move towards clean energy sources”. This has since been raised to $9.3bn.
But the Komati debacle, and a crippling collection of blackouts which wiped billions of {dollars} from the nation’s GDP and condemned development to lower than 1 per cent yearly, led South Africa’s authorities to decide to increase the lifetime of its coal energy stations. Three crops — Grootvlei, Camden and Hendrina — had been initially resulting from be mothballed within the subsequent few years, however have had their retirement dates prolonged to 2030.
Marokane mentioned suspending the closure of those energy stations would give the nation sufficient time to place in place mitigation measures to cope with the social fallout of the transition, whereas guaranteeing energy safety.
Concerns have arisen, nonetheless, that South Africa now dangers shedding the funding from the IPG.
But Marokane mentioned the Komati catastrophe had been defined to the group of funders, and “we’ve had no resistance” from them to the change of plan.
“We explained the rationale of going this way,” he mentioned. “Everyone recognises that on the one hand, you have to solve the issues of the transition, on the other, you have to have a very calculated and responsible way of bringing society along,” Marokane added.
President Cyril Ramaphosa reiterated this sentiment on July 15, chatting with a local weather summit within the nation’s capital.
“South Africa will decarbonise at a pace and scale that is affordable to our economy and society. If we act too fast, we risk damaging huge sections of our economy before we have built alternative energy and industrial capabilities. At the same time, not acting now risks our economic stability,” he mentioned.
Ramaphosa mentioned the nation was nonetheless dedicated to the transition plan, which goals to leverage the $9.3bn from the IPG to boost $98bn. “This will drive huge investments in the electricity grid, green hydrogen, electric vehicles, economic diversification and skills development,” he mentioned.
Olver mentioned that “some of the financing might be at risk” from the delay in decommissioning energy stations to 2030. But, he mentioned, there was little possibility in the midst of an energy disaster.
“I think the funders broadly understand that getting energy security by bringing new energy on to the grid is a process, rather than an instant event,” Olver mentioned. (Rob Rose)