WITH the rich countries strategically championing the move from fossil fuels to renewable energy sources, middle-income countries such as South Africa face economic disaster as communities thriving on the coal-mining industry, could turn into ghost towns due to the imminent loss of hundreds of thousands of jobs.
The governments of France, Germany, the United Kingdom (UK), the United States (US), and the European Union (EU) wanted the South African government to move away from coal and show them the plan for this before paying out $8.5 billion energy transition to fund that move.
Then President Cyril Ramaphosa established the Presidential Climate Finance Task Team (PCFTT) in February 2022 to mobilise financing for the just energy transition (JET), develop South Africa’s investment plan, and make recommendations on the financing package to an inter-ministerial committee.
On November 4, 2022, Ramaphosa outlined South Africa’s JET Investment Plan.
Thereafter, Ramaphosa moved to shut down the Komati Power Station in Mpumalanga which had been firing since 1961, citing that the power station had reached the end of its lifespan, which was disputed by former power station operators, such as Jacob Maroga and Matshela Koko including Mineral Resources and Energy Minister Gwede Mantashe and Electricity Minister Kgosientso Ramokgopa, who are on record disputing the facts around the lifespan of power stations.
According to Barbara Creecy, Minister of Forestry, Fisheries, and Environment – speaking during a breakaway session at the South Africa Investment Conference in April – the energy transition is expected to affect at least 100 000 jobs in the mining sector, with communities in Mpumalanga’s coal belt, where at least 80% of Eskom’s coal-fired power stations are located, bearing the brunt.
“As we transition, we must leave no one behind. We know that the coal generation sector is still responsible for 90% of our energy generation. We know coal will be part of our energy mix into the 2040s and we know the jobs in the coal value chain are well-paid jobs with good benefits...
“The transition risk … arises as a result of the fact that we are a middle-income country with a small dependent economy that is locked into a whole range of international relationships,” said Creecy.
With the transition dependent on rich countries funding the project, the Falcons looked into companies that would benefit from the Renewable Energy IPP Procurement Programme and the closure of at least nine coal power stations in Mpumalanga, paving the way for additional new generation capacity to come online from early 2025.
The Presidency, Ramokgopa and Mantashe did not respond to questions posed to them by the Falcons on whether there was a plan to ensure that jobs were protected, and that towns would not turn into ghost towns after the closure of coal power stations.
Meanwhile, Mantashe announced the Preferred Bidders appointed under the Renewable Energy IPP Procurement Programme (REIPPPP) Bid Window 6 with companies from rich countries such as Scatec, a Norwegian company, Engie SA, a French multinational utility company, the Ikamva Consortium which is made up of Globeleq from the UK, Mainstream Renewables owned by a company known as Aker Horizons’ from Norway which has 58.4% ownership and Mitsui & Co. Ltd from Japan with 24.9% shareholding, and the remaining shares held by Irish minority shareholders.
South African ‘privileged’ entities Total Mulio and billionaire mining giant Patrice Motsepe’s African Rainbow Energy and Power (AREP) as well as H1 Holdings are among those lining up for the bite of the IPP Procurement Programme.
Former Eskom chief executive Matshela Koko, told the Falcons that the country should accept that greenhouse gas emissions did indeed cause global warming, but this did not necessitate the immediate shutting down of the coal power stations.
“For this reason alone, the electricity sector must decarbonise. For us in South Africa, decarbonisation must happen at a pace, scale, and cost that the economy can afford. My take is that we must keep the lights on first and then follow a decarbonization pathway that minimizes the disruption in the economy.”