The government will be making a huge mistake by seeking to discard coal in its entirety, without first putting in place proper alternatives, says Robert Kgakoa.
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South Africa's energy transition towards decarbonisation is marked by significant differences in normative aims and governance choices, suggesting contestation, both over the scope and outcome of the transition process. In response to the energy crisis, the government approved the Just Transition Framework, which sets the tone for the development of an action plan for the $8.5 billion Just Energy Transition Partnership between South Africa and some nations of the northern hemisphere (France, Germany, the European Union, the United Kingdom and the United States).
President Cyril Ramaphosa also recently made sweeping changes in the regulatory space to fast-track the processes of approving new energy projects aimed at increasing generation capacity to the grid.
These include increasing capacity procured through Bid Window 6 from 2 600MW to 5 200MW; allowing existing Independent Power Producers (IPPs), including mines and shopping malls, to sell surplus power to Eskom; expediting processes to enable Bid 5 window projects to reach financial close statuses; the total removal of licensing threshold for new generation projects; and reducing timeframes associated with environmental approvals for new projects.
These are all steps in the right direction, especially given the ongoing problem of intermittent power cuts, which negatively impact South Africa's social and economic life. However, while renewables are necessary to transition to cleaner energy, their electricity generation is not continuously available due to external factors that are beyond human control. Factors such as weather patterns and the length of days without sunshine often result in renewables losing high-capacity load factor. Also, since these renewable energy sources are non-dispatchable, their electrical output cannot be operationalised at any given time to meet society's fluctuating electricity demands. Therefore, deployed alone, renewables cannot be relied upon to offer stable electricity generation. According to the Department of Mineral Resources and Energy, 70% of South Africa's electricity is generated through coal, highlighting the importance of coal and the country's reliance on coal for energy generation.
As a developing nation, South Africa faces objective realities which the energy transition must be cognisant of. While the country escalates efforts to mitigate the impact of climate change, factors such as the country's dependence on coal for base load, energy security, revenue generation and employment creation by the coal mining and energy industries cannot be ignored. As things stand, South Africa's expanded unemployment rate stands at 46% of the labour force, and the loss of many jobs in the coal sector due to the energy transition will further exacerbate the country's unemployment crisis. The latest statistics indicate that the coal sector employs roughly 89 548 people, which is 20.48% of total mining industry employment of about 437 288. This highlights the importance of coal, not only as an energy source but also as a key employment creation driver.
Also, now more than ever before, the geopolitical energy issues around the world give credence to the assertion that coal cannot be entirely ignored and that it is a key strategic source of energy. This has been witnessed recently with the ongoing war between Russia and Ukraine, in which many countries, including those in Europe, had to switch to coal after Russia stopped exporting gas and oil to them. Furthermore, the energy transition must also pay attention to the realities of coal-mining towns, where economic activities and employment creation are centred around coal mining. There is thus a need to ensure that while the country implements energy transition, such towns and communities are offered support not only through skills development, but also by putting in place plans to repurpose and introduce new economic activities in these towns and communities.
Ultimately, the reality is that while South Africa is confronted with the need to transition to clean energy, there is also a need to avoid a one-size-fits-all approach. In simple terms, the government will be making a huge mistake by seeking to discard coal in its entirety, without first putting in place proper alternatives. As a strategic resource, coal has lifted many communities out of poverty and continues to play a key role in sustaining the livelihoods of many communities. It is thus very important that the pace and timing of the transition should not only be guided by environmental concerns but must also consider the socio-economic implications for the country. This is more relevant, especially considering that South Africa is still a developing nation that faces many challenges, such as unemployment, poverty and inequality. That being said, coal remains South Africa's crucial building block for development because it assists not only with electricity generation, but revenue generation and employment creation.
Robert Kgakoa is a Public Policy and Research intern at Frontline Africa Advisory. News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.