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South Africa turns oldest coal plant into clean energy hub

South Africa's state utility firm, Eskom, has retired its last coal-fired power unit at the Komati power station as part of its Just Energy Transition (JET) roadmap, serving as a reference to the rest of Africa on transitioning fossil-fuel assets to renewables.

Seth Onyango, bird story agency

South Africa is set to convert old coal-fired power sites into wind and solar farms, utilising the unused facilities and transmission network to plug clean energy into the national grid.

Eskom plans to install 150 MW of solar photovoltaic, 70 MW of wind and 150 MW of battery storage at its newly defunct stations at Komati in a significant restructuring of S.A's energy systems.

"Continuing to put the site and its associated transmission infrastructure into good use and to provide economic opportunities to the community. A containerised micro-grid assembly factory has already been established on-site," the utility firm said in a statement.

Tapping into the network infrastructure of the decommissioned coal plants will save the country billions of dollars that could be used to expand its grid to accommodate renewable power.

Eskom is expected to receive concessional funding from multilateral and international partners under the aegis of a $US8.5 billion Just Energy Transition Partnerships (JETP).

The partnership to support S.A's pathway to a low carbon economy and climate resilient society to accelerate the just transition, including rehabilitation and repurposing of mines.

It is also expected to support the development of new economic opportunities such as green hydrogen and electric vehicles, amongst other interventions to turbocharge the state's shift towards a greener future.

For other African states, S.A's gradual phasing out of coal under JETP could help incentivise their pivot from fossils, especially in fossil-dependent economies like Nigeria and Angola.

At the COP26 climate conference in Glasgow in 2021, rich economies pledged US$8.5 billion to be invested over the next five years to support SA's decarbonisation efforts.

But a report from the World Economic Forum shows SA's coal-dominated economy will require at least 250 billion US dollars over the next three decades to close down its coal-fired power plants.

By offering South Africa financial incentives to stop burning coal, the West is finally listening to energy stakeholders in Africa who have reasoned that the continent can't be forced to dump fossils without a stable alternative.

JETP has still seen a step in the right direction despite revelations that less than 3 per cent of the $8.5 billion climate finance deal being offered to SA will come in the form of a grant.

Bloomberg reported that Germany would provide $1.2 billion in concessional loans at attractive rates, while France will avail of US$1 billion.

An additional $2.6 billion will come from Climate Investment Fund, backed by six multilateral development banks, including the World Bank. Climate Home News reported that the US would pledge to lend SA $1 billion in commercial loans, as will the European Investment Bank.

Meanwhile, the UK will offer $1.7 billion in commercial loans and debt guarantees, and just $230 million will come from grants.

Efforts to decarbonise Africa come as countries continue to discover vast oil and gas deposits, the latest being Namibia.

According to S&P Global Platts, nearly 40 per cent of global new gas discoveries in the last decade were in Africa, mainly in Senegal, Mauritania, Mozambique and Tanzania, with 17 countries already producing gas with seven net exporters and seven net importers, according to the African Energy Commission.

On that premise, advocates of fossils have called for a just energy transition in Africa, given it only contributes less than 4 per cent of the world's greenhouse gas emissions.

With a pressing need for new energy sources and ever-increasing gas, oil and coal stocks, thanks to discoveries, African countries are unlikely to sit back and wait for very long.

South Africa's Integrated Resource Plan of 2019 (IRP2019) still allocates 1 500 MW of new coal to be introduced to its fleet before 2030.

South Africa turns oldest coal plant into clean energy hub [Graphics: Hope Mukami]

The head of the country's massive, state-owned electricity supplier, Eskom, has said that even if coal is removed, the country will still need stable generation and has suggested that increasingly available regional gas supplies be used instead.

Across Africa, calls for the continent to be offered special dispensation and continue to pump oil, burn coal and develop gas has been growing, with many questioning the need for renewables since African countries already "have" large reserves of carbon-based fuels.

However, the availability of financing for major investments in clean energy, like wind, solar and green hydrogen, could still be the game-changer.

Most gas and oil reserves are relatively recent discoveries, meaning they all require significant investment infrastructure. While that is usually provided by oil and gas majors, the actual power generation facilities are not.

And with China pulling out of financing new coal stations outside of China, the financing opportunities - as well as high costs and complexities - could push countries to look more closely at renewables.

While the "just energy" narrative appears to be growing, according to S.A-based Centurion Law Group, a just energy transition in Africa ensures there are energy banks under JET-P that mobilise finances into the sector.

"For Africa to achieve its goal of industrialising the continent, it is critical that it has access to reliable, affordable, and sustainable modern energy services as well as adequate financing," it said in its analysis in April.

Reports from the African Development Bank (AfDB) show that bank financing in Kenya, Morocco, and the Democratic Republic of Congo has supported geothermal, solar and hydropower projects that are clean, renewable, and bring electricity to underserved households and small business markets.

OPEC Secretary-General Mohammed Barkindo and his counterpart at the African Petroleum Producers Organisation (APPO), Omar Farouk Ibrahim, have insisted that only a "dual carriageway" will propel Africa's energy agenda –– where fossils and renewables are ingredients in the continent's energy cocktail.

At a meeting in Brazzaville, Congo, last year, the two industry captains pushed for an adaptive and market-driven approach to the energy transition, where hydrocarbons are not excluded or eradicated.

"We will not allow billions of barrels of oil to go to waste and we will not be bamboozled into projects that we don't need – ones which will not address energy poverty. We need to sit down and have an honest conversation about the energy transition," Ibrahim said. Barkindo echoed those sentiments.

"We in OPEC also categorically reject the narrative that the energy transition is from hydrocarbons to renewables because this narrative is completely misrepresenting science," Barkindo reiterated.

"We believe that all sources of energy are required today and in the future to meet the challenges of climate change and future energy demand. According to our World Oil Outlook at OPEC, energy demand will grow by a minimum of 25 per cent between now and 2045. Therefore, we have to promote all energy resources in an efficient and sustainable manner. Our industry, therefore, is part of the solution to climate change."

But the EU appears cognisant of that.

Brussels announced plans to label natural gas and nuclear projects as 'green' investments early this year.

"Taking account of scientific advice and current technological progress, as well as varying transition challenges across the Member States, the Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future," the European Commission said in a press statement released on January 1.

According to the Commission, gas and nuclear projects will be considered green if they produce emissions below 270g of CO2 equivalent per kilowatt-hour (kWh).

Vijaya Ramachandran, director for energy and development at the Breakthrough Institute in Berkeley, California, told bird that the Commission's decision was a step in the right direction but should be followed through with action.

"If the EU acts in a fair manner, it will afford Africa a just energy transition by enabling investments in natural gas just as it does for its member countries," she said.

"However, it may decide to follow one set of policies at home (classifying natural gas as green) while still opposing the financing of natural gas by the World Bank and the European Investment Bank. If this is the case, these actions can be termed immoral and unjust; a form of green colonialism."

Balancing a "just transition" that considers future generations' needs (and their right to a stable climate as well as stable and abundant power supplies) will take nuance, good communication, political will and clear heads. With its abundant sunlight, wind and coal, South Africa could well become the test case for how this works elsewhere, now and in the future.

bird story agency



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