South Africa is heavily reliant on coal as nearly 90 percent of power generation in South Africa is fueled by coal, making the country one of the heaviest polluter’s per-capita on the planet. The country’s coal-based electricity system provides unreliable power at eye-watering prices, stunting the country’s economic growth. South Africa with over 60 million people is the 12th-largest emitter of carbon in the world.
At the local level, heavy pollution from coal mining and coal power stations has disastrous effects on the environment and on public health and a government study estimates that 5,000 people die each year from pollution in the nation’s coal belt.
In 2020, South Africa produced 203 million tonnes (Mt) of coal, worth 133bn rand
(US$8.7bn). The sector employs more than 90,000 people directly, and 450,000
indirectly. Globally, it ranks as the seventh largest coal producer and the
fourth largest exporter behind Australia, Indonesia, and Russia.
A large share of South Africa’s coal is mined from the Mpumalanga state, in the eastern region. About 60 percent of the coal production stays home, while the remainder is exported. Coal exports dropped from 7 percent of the country’s total foreign earnings in 2011 to 4.6 percent in 2020, whereas the contribution of coal mining to the GDP fell from 2.3 percent to 1.9 percent. Still, coal continued to rank around ninth in South Africa’s top 10 export commodities. South Africa had about 150 coal mines in 2020.
South Africa losing its European coal buyers was a direct result of a series of regional and country-wise policies implemented in the European Union (EU) since the early 2010s. Due to a series of laws curbing the use of coal and making the financing of coal-fueled power plants more difficult, coal consumption in the EU almost halved between 2015 and 2020 — one of the fastest falls in coal use of any G20 member. Over five years, the EU managed to reduce its total greenhouse gas emissions by about 7 percent and almost half of Europe’s coal power plants
operational in 2010 have either closed or are due to close.
Here is a graph, illustrating the energy mix for South Africa:
Coal was paramount to South Africa for electricity generation in the past and continue to be until this day. Despite the growing global movement to phase out coal in thermo-powerplants, South Africa still heavily relies on this fuel to generate electricity. In fact, South Africa ranks first as the country with the largest share of coal in its energy matrix: 86 percent of all electricity generated in South Africa during 2020 was through coal-fueled powerplants, while the global average was 34 percent. South Africa’s detrimental position is significantly ahead of the next highest G20 member, India, which generates 71 percent of its electricity from coal.
Government of South Africa published the Integrated Resource Plan (IRP) in October 2020 which encompasses South Africa’s long-term plan for electricity-generation and infrastructure. Accordingly:
- The use of coal for electricity should not be fully abolished; instead, all new coal power projects must be based on high-efficiency, low-emission and other cleaner coal technologies;
- Increase the contribution of renewables in South Africa’s energy matrix from 7 percent to 39 percent;
- Extend operations of South Africa’s nuclear power plant Koeberg Power Station past the end of its design life, which would be in 2024; and
- Install additional nuclear power.
At the same time IRP strongly recommended:
- Decommissioning of approximately 10,500 MW of coal power plants until 2030 which will cut coal’s share in power-generation by half to 43 percent.
Following the strong commitment for decarbonization by South Africa, the US, UK, France, Germany and European Union made a commitment in the COP26 that they will help fund South Africa’s transition away from coal, in a multilateral effort that could serve as a model for other developing nations to ditch the fossil fuel. Climate scientists and some diplomats say the South Africa agreement could pave the way for similar deals with other heavily-polluting developing countries – a critical step in containing global warming and avoiding a full-blown climate catastrophe.
This announcement was indeed a sign of reassurance at the COP26 Climate Summit in Glasgow, Scotland, as it was made right after when the G20 leaders failed to put an end date on the use of coal, as some member countries and the COP26 presidency, Prime Minister Boris Johnson, had sought to do.
The reality is that disappointments at any UN Climate Conferences are not uncommon. It is also true that most climate conferences have failed to meet the expectations of activists and policymakers. Perhaps that’s to be expected: Global climate conferences can produce targets and commitments at best. They are usually watered down in order to convince as many countries as possible to sign on. Most pledges lack credible enforcement mechanisms, while actual policies are then decided by governments and parliaments.
Prime Minister Boris Johnson said the initial $8.5 billion partnership would help South Africa to decarbonize its coal intensive energy system. In addition to providing initial $8.5 billion in grants, the program will be supported with loans over the next 3-5 years to help finance decarbonization in South Africa.
The South Africa’s deal which goes under the title of “Just Energy Transition Partnership” is designed to achieve the lower bound of South Africa’s emissions targets under the Paris Agreement, compatible with keeping the global temperature increase to 1.5 degrees Celsius above 19th-century levels. The funding will serve the following three goals:
- Early retirement of coal plants;
- Promoting clean energy sources; and
- Assistance for coal-dependent communities.
It is recognized that retiring coal plants and supporting coal-dependent regions will be a political challenge. The transition away from coal threatens a significant number of jobs at heavily unionized mines and power plants, in a country that by some measures has the world’s highest unemployment rate and where one job often feeds a large family. But the energy transition will also require new energy sources and thus new jobs.
This deal is the first of its kind for the following three key reasons:
- The South African government largely designed the bespoke program, which will enable it to account for local conditions on its own terms;
- It represents a well-funded partnership among a small number of actors, creating greater accountability than is possible in a vague global or regional agreement; and
- The deal provides funding for a “just transition” at the local level in addition to the early retirement of coal plants, helping to cushion the blow of local deindustrialization in a developing economy.
All three of these details imply that it is more likely to succeed than past climate agreements.
Ottawa, Ontario, Canada 20 January 2022