28 October 2016 at 12:21 pm
South Africa can no longer afford to fuel its growth and development with a dirty, coal-hungry energy diet, as the march towards renewable energy and a life after coal is rolling out on a truly global scale. This shift is now within our reach.
This was evident from presentations at the Life After Coal Seminar hosted by the Centre for Environmental Rights (CER) in Cape Town earlier this week. Discussions focused on why and how to speed up the transition from coal to renewable energy in the local context.
In her opening address Robyn Hugo, who heads up the CER’s Pollution and Climate Change Programme, said South Africa’s current chaotic planning environment is holding the entire country to ransom. In her presentation titled “Why we should quit coal”, Hugo challenged the exploitation of coal for electricity. It is a constitutional imperative to stop fuelling South Africa’s energy policy and development with coal, she said.
Currently, the government is making decisions to procure more coal-fired electricity, based on outdated planning, and with little to no transparency. The official 2010 Integrated Resource Plan (IRP) includes demand forecasts that are also too high and technology cost comparisons that have changed materially. The burning and mining of coal also have significant impacts on human health, water and climate change, she pointed out.
South Africa needs to accelerate the retirement of its existing coal infrastructure and to encourage and enable a just transition to renewable energy systems. These decisions must be made based on a rational and transparent basis, taking the latest accurate data into account. To do this, the myths about renewable energy, and any of its perceived limitations, need to be busted, she said. These myths and misinformation – that renewable energy is expensive, unreliable, and that we need baseload, which it doesn’t provide – are perpetuated by Eskom.
Furthermore, she emphasised the need for government to ensure Eskom’s compliance with legislation to protect the environment and human health. Currently, Eskom is looking at extending the lives of its older coal power plants, although these do not comply with air pollution standards and Eskom claims that it cannot afford to upgrade them to ensure this compliance. Eskom gets 90% of its power generation from coal. All Eskom’s coal power plants are based in air pollution priority areas, which have been so declared because air pollution there already exceeds South Africa’s weak air quality standards. As the home of 12 Eskom coal power plants (including Kusile which is under construction), Eskom’s release of toxic cocktails into the atmosphere of the Mpumalanga Highveld is a major contributor to the air pollution in that priority area.
Eskom’s behaviour and its recent anti-renewable energy rhetoric simply do not make sense, taking into account the state’s constitutional obligations and all available, current data, she pointed out.
Other speakers also emphasised that the impacts of carrying on with a coal-fed development path could be catastrophic. South Africa could end up with stranded assets and fail to meet its international commitments in terms of the Paris Agreement to halt the current rate of climate change. South Africa is particularly vulnerable to the impacts of climate change and therefore it is imperative that decisive steps are taken to mitigate the country’s greenhouse gas emissions. Investing in new coal-fired power plants and extending the lives of existing coal plants runs directly counter to this imperative, given that the burning of coal, natural gas and oil for electricity and heat is the largest single source of global greenhouse gas emissions.
In this regard, Jesse Burton from the University of Cape Town’s Energy Research Centre discussed the risk of further investments in fossil fuels. South Africa needs a strategy to avoid so-called carbon lock-in and the costs of stranded assets (assets that are paid for but not used). There is no further room for new coal unless it is replacing old, inefficient and expensive plants, she said.
South Africa’s CO2 emissions are already among the highest in the world. The country is one of the biggest users and exporters of coal. Approximately 60% of South Africa’s emissions come from coal (compared with the global estimate of 25%).
Burton highlighted the fact that new coal plants might have to be switched off after only 10 to 15 years of operating, which would mean costs that can’t be recouped and would be a financial burden to society.
Research shows South Africa is also running out of carbon emission space. There is no room for more coal-fired power stations, given its serious mitigation challenges. South Africa has an estimated carbon budget of 10-14 gigatonnes (depending on international negotiations). Half of this has already been filled due to infrastructure inertia. Kusile and Medupi, Eskom’s latest (very overdue and expensive) coal-fired power stations, will, according to Eskom, emit about 54 megatonnes of carbon dioxide.
A least-cost mitigation plan for South African means that we have to retire coal plants as soon as possible. SA will have to close either all its coal-fired power stations or Sasol’s coal-to-liquids plant by 2050 to stay within its carbon budget. These and other trade-offs may have to be made, she indicated. South Africa should also carefully think about its current mining strategy, given the carbon constraint world that is emerging.
Worldwide, there is massive divestment from fossil fuels and coal is an industry in decline. The financial sector already believes coal is in structural decline, she said. Not only is it already technically feasible to have the bulk of South Africa’s generation from wind and solar, but this is also the lowest cost option. This is especially critical to the roll-out of accessible energy for all.
There is indeed a prosperous, healthy life after coal. In this regard, Dr Tobias Bischof-Niemz, head of CSIR’s Energy Centre, highlighted how new wind and solar PV research show the potential for renewable energy sources to replace fossil fuels.
Renewable energy is cheaper than coal, even when the significant environmental and health impacts of coal are discounted. Furthermore, South Africa has world-leading potential for clean, affordable and efficient renewable energy. High fidelity data is available to enable renewables-based planning.
Wind energy potential in South Africa is also extremely good and has no technical limitations, Bischof-Niemz indicated. South Africa has wide areas with 7m/s average wind speed at 100 m above ground. This is much higher than parts of Europe and demonstratives the significant potential for wind resources in South Africa.
More than 30% wind capacity factor is achievable almost everywhere in the country. On average, wind power is available 24/7 with higher output in evenings. On almost 70% of the suitable land area in the country, a 35% capacity factor or higher can be achieved.
Also, the cost of renewable energy development has come down so dramatically that it is now very competitive with traditional “baseload” options. It is already 40% cheaper to build new wind and solar PV plants than it is to build new coal plants. In fact, wind energy is already now cheaper than what was assumed in the IRP 2010 for the year 2030.
The technical potential for economic wind farms across the country is virtually unlimited, he indicated.
Peta Chennells, the senior investment analyst at Mergence Investment Managers, said renewable energy offers huge investment opportunities, given the country’s abundant wind and solar resources and the strength of its renewable energy procurement programme.
To date, R194bn has been committed for investment in the renewable energy programme and this is forecast to grow to R654bn.
So far, Mergence has invested R1,2 billion across 12 projects and has committed a further R400 million to supporting five small-scale renewable energy projects. Most of these projects are located in rural areas such as the Northern Cape and Limpopo, stimulating much needed rural economic development in those areas.
South Africa’s renewable energy programme offers long-term, stable and predictable cash flows and returns to investors, she says. It makes sense for everyone – you can make a good investment in clean energy and still make a real contribution to South Africa’s economic development.
Chris Yelland, Managing Director of EE Publishers, highlighted the risks of the power generation landscape in the country. In his presentation, titled “Making sense of energy in a chaotic environment”, he emphasised just how uncertain the changing energy landscape currently is.
The local energy planning and governance landscape is riddled with chaotic planning issues. There is, for instance, no published (updated) Integrated Energy Plan and an outdated IRP for electricity.
South Africa has an energy planning problem, resulting in under-supply and over-capacity. The only predictable thing in SA’s energy policy mix is that the cost of renewables is coming down.
South Africa is over-dependent on Eskom as a dominant monopoly supplier and the power utility lacks transparency. Yelland believes this creates conflicts of interest, with Eskom often pursuing its own rather than the national interest. Eskom also now sells less electricity than it did a few years ago and its tariffs are four times higher.
Yelland considers the ability to move from a central planning to a market-driven energy system and from slow dinosaurs (like coal-fired power plants) to flexible, nimble adapters (like renewables) as some of the critical success factors in such an uncertain world.
The most pessimistic scenario for renewable energy in South Africa is still 20% cheaper than the most optimistic nuclear scenario, he says.
Zanie Cilliers, a Project Co-ordinator at Sustainable Energy Africa, discussed the role that local government can play in the transition from fossil fuels to renewable energy.
All the metros are experiencing declining electricity demands and a decoupling of growth and demand. High-end customers who are cross-subsiding poorer residents can afford to leave the grid and are increasingly doing so.
Also, it appears that municipalities are fighting to buy electricity from independent power producers rather than Eskom. Increasingly, local cities are looking at new options and rethinking their role as electricity service providers, she indicated. They are looking at the smarter management of load, a basket of measures, and using a combination of suppliers (rather than one big supplier). Many are looking at ways to sell energy services, rather than just electricity.
South Africa is at a crucial juncture, presenting an important – and urgent – opportunity: rather than making expensive, outdated energy decisions that will burden us and future generations with massive health, financial, environmental and climate liabilities, we need to phase coal out of the global energy mix as soon as possible and accelerate investment in renewables.
The Life After Coal seminar was made possible by the Konrad Adenauer Stiftung.
Copies of the presentations:
- Robyn Hugo, CER
- Jesse Burton, UCT ERC
- Peta Chennells, Mergence
- Chris Yelland, EE Publishers
- Dr Tobias Bischof-Niemz, CSIR
- Zanie Cilliers, SEA
Life After Coal is a campaign by the Centre for Environmental Rights, groundWork and Earthlife Africa Johannesburg that aims to discourage investment in new coal-fired power stations and mines, to accelerate the retirement of South Africa’s existing coal infrastructure, and to encourage and enable a just transition to renewable energy systems for the people.