Government should stay on course with renewables shift, says Deloitte exec

(Photo: File, AFP)
(Photo: File, AFP)

Shifting South Africa's energy production away from coal will be a most daunting task, but government must consider the value that this will add to its economy as oppose to the burden it will impose.

This is according to Deloitte Africa's leader in energy resources and industrials, Andrew Lane. Lane spoke to Fin24 on the sidelines of the Investing in African Mining Indaba in Cape Town earlier in the week. The Indaba wrapped up on Thursday.

Aside from government’s proposals to ease Eskom's manifold struggles, a prominent theme that emerged at the Indaba was contention over whether South Africa was shifting from coal power fast enough.

Lane told Fin24 that decarbonisation would become a much more prominent issue for South Africa in the coming years and that every bit of progress made in government policy documents such as the Integrated Resource Plan was significant.

'Good compromise'

"Backing clean coal is probably a good compromise. We live in a world of technological developments. If people can create self-driving cars, then purely clean coal might be possible. I believe the minister is genuine in asking people to invest," said Lane.

Lane said the decision by several major banks to withdraw funding for metallurgical coal projects was significant, and could play a role in guiding South Africa even closer towards decarbonisation.

"It was huge. Investors are becoming much more vocal. Many financial institutions have said they won’t fund coal anymore. We need to think of the value of decarbonisation and not just the cost," Lane said.

Lane said Mantashe was in an unenviable position when it came to the pressure to move away from coal, juxtaposed with the fact that SA was not as developed as large economies that were turning their backs on decarbonisation in any event.

"The minister is in a very tough situation. Getting rid of coal will be a process, especially in light of what is happening in the space globally. But the fact that larger, more developed nations may be walking away from decarbonisation doesn't justify us doing the same," he said.

Lane told Fin24 that he could not comment on matters related to Eskom, and a case related to R60m the firm was paid by the power utility in consulting fees. The matter is currently before the South Gauteng High Court in Johannesburg and Deloitte has denied allegations of wrongdoing.

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