Coal is a resilient adversary and like all commodities subject to market vagaries, says the writer.
Coal is a resilient adversary and like all commodities subject to market vagaries, says the writer.

Slowly weaning South Africa off coal

By Mushtak Parker Time of article published Nov 10, 2021

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CAPE TOWN - As president of South Africa, Cyril Ramaphosa has never been wooed and flattered as much as in the months leading up to COP26 in Glasgow.

As dapper as he is, the likes of John Kerry, Angela Merkel, Boris Johnson and Ursula von der Leyen want one thing above all else from Ramaphosa.

They want to wean him and the country off coal, which accounts for 80% of South Africa’s energy mix, as part of COP26’s ambition towards ‘consigning coal power to history’.

Of all the fossil fuels, coal is a bigger source of carbon emissions than oil and gas – 14.7Gt of CO2 compared with 11.5Gt for oil and 7.7Gt for gas, according to the Global Carbon Budget 2021.

But coal is a resilient adversary and like all commodities subject to market vagaries.

Instead of a retreat from coal, European countries sought refuge in coal and lignite in Q3 2021 as record gas prices hit the continent. The European Electricity Generation Summary Q3-2021 of EnAppSys, confirms that coal and lignite contributed a greater fuel mix share than gas, producing 110TWh compared with 92TWh by gas-fired plants.

Eskom’s Emalahleni coal mine in Mpumalanga, one of 15 across the country, which supplies most of its coal feedstock, has contributed to making South Africa the 12th biggest CO₂ and the largest SO₂ emitter in the world.

The carrot is an initial commitment of $8.5bn (R126bn) – money the National Treasury can ill-afford given the current state of the economy – pledged by rich western nations in Glasgow last Tuesday, for the next three to five years in a partnership with Pretoria to support a just transition to a low carbon and climate resilient economy and society bereft of coal power.

“The idea is that the countries support South Africa to phase out of coal faster, and to go earlier and faster into developing renewables. I am confident that this partnership could become a template on how to support just transitions around the globe,” said Von der Leyen.

The rewards for “Not King Coal” Ramaphosa and the country are potentially huge – a future without polluting coal which has devastated communities with shockingly poor air quality and respiratory conditions. And a contribution towards Pretoria’s stated now revised ambition of initially reducing coal’s contribution to the energy mix to less than 60% and eventually phasing it out completely, and upscaling wind, solar and other non-polluting power.

“South Africa is committed to playing its part in reducing global emissions,” Ramaphosa said.

“The partnership that we have established today is a watershed moment not only for our own just transition, but for the world as a whole. It is proof that we can take ambitious climate action while increasing our energy security, creating jobs and harnessing new opportunities for investment, with support from developed economies.”

A future without coal for South Africa (decoalinisation) sounds beguiling but it is far more complex than it appears. The transition may take up to half a century and will need regular injections of new funds.

The June 2021 Report of The Presidential Climate Commission and its updated nationally determined contributions under the integrated resource plan estimated that R860bn – R920bn is required only for new electricity generation, distribution and transmission over the next decade which would take emissions to between 370 and 390 Mt CO₂ by 2030.

The real costs will be much higher when you factor in medium-term GDP growth, which Fitch Ratings projects “to decline to 2.1% in 2022 and 2% in 2023,” the high unemployment rate of 34.4%, and associated costs of coal mine decommissioning such as retraining, relocations, pensions, and support for affected communities.

The South African mining industry, according to Statistics SA, employed 451 427 people in 2020.

Alok Sharma, President of COP26, and fellow Western leaders may hail every pledge and “deal” as a game changer. The reality is that they lack detail and any success can only be measured by their implementation well down the line.

At best COP26 could be remembered as the “conference for the pledging out of coal”. This despite progress being piecemeal and contradictory since several of the “deals” do not involve the mega emitters such as China, Russia, Australia, US and India.

They include a commitment by 40 countries pledging not to invest in new coal mines and to phase out coal power over the next few decades minus China, Australia, US and India; 20 countries including the US pledging to end public finance in support of overseas oil, gas and coal projects – excluding China, Japan and South Korea, the three largest coal financiers abroad. This is a mockery of Sharma’s hubristic claim that coal financing has “been well and truly choked off”.

China for instance has over 40GW of coal in 20 countries in the pre-construction pipeline. In Cumbria in north England a new coal mine remains on the agenda despite PM Johnson not being “in favour of more coal”, and the UK government’s decision not to offer backing to the “low-cost” Acorn Project – a proposed carbon capture facility in Aberdeenshire.

Chinese President Xi Jinping too announced the opening of five new coal mines in addition to existing ones to boost production to meet the country’s voracious energy demand.

Failure to get commitments from and the lack of co-operation between the big polluters has undermined COP26’s “coal out” strategy. According to the IEA (International Energy Agency), China needs to cut its coal demand by 80% by 2060 to meet its climate goals.

Only the EU is on track to achieving net zero by 2050. About 70% of India’s electricity grid is powered by coal. Its net zero commitment is for 2070.

The IEA reckons India needs to phase out coal power generation before 2040 to reach the 2050 target. The US too is dependent on fossil fuels for 80% of its energy mix. The Biden environmental plan falls well short of achieving net zero by 2050.

A number crunching by IEA based on promises made on Days 2 and 3 of COP26, predicts that the holy grail of limiting the global temperature rise to 1.5C to contain global warming, will not be met.

The best hope is a 1.8C rise subject to all pledges being implemented. It is imperative that stakeholders remain vigilant against the false narrative of climate deniers, sceptics and apologists that retreating from coal and other fossil fuels is bad for the economy.

  • Parker is a writer and economist based in London.

Cape Times

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