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South Africa received a promise of an $8.5-billion helping hand
from five G20 members 2 November as the globe's 12th-largest
emitter seeks to cuts its GHG emissions and transition away from a
coal-centric power generation sector.
The climate finance backing came as the South African government
prepared to submit a roadmap for tackling climate change to the
nation's parliament and an initiative to transform the country's
energy sector was launched 2 November.
Change is needed because the same day all these developments
took place, state-owned power generator Eskom was warning of load
shedding because its power plant fleet's health was even creakier
than usual, with almost 18 GW of capacity offline for maintenance.
South Africa's installed power generation capacity is just over 58
GW.
Help from the G20 nations—France, Germany, the UK, the US,
and the EU—will come in the form of the "Just Energy Transition
Partnership." The partnership will mobilize an initial $8.5
billion in a first phase of financing involving grants,
concessional loans and investments, and risk sharing instruments,
its backers said. The premise of partnership is to prevent up to
1.5 gigatons of emissions over the next 20 years, and accelerate
South Africa's transition to a low emissions, climate resilient
economy, they said.
Support for implementing the path to South Africa's revised
Nationally Determined Contribution (NDC) was welcome, said
President Cyril Ramaphosa, adding that a long-term partnership such
as this could serve as a model for support for developing countries
from their developed nation counterparts. European Commission
President Ursula von der Leyen added that the partnership was a
global first and could become a template on how to support a just
transition around the world.
"By closing South African coal plants ahead of schedule and
investing in clean power alternatives for the people of South
Africa and supporting an equitable and inclusive transition in
South Africa's coal sector, we are following through on the pledge
the G7 partners made in Cornwall to accelerate the transition away
from coal in developing countries," noted US President Joe
Biden.
South Africa's generation stack is dominated by coal, accounting
for 85% in 2019, according to IHS Markit data. South Africa
produced 258.9 million mt of coal in 2019, according to Minerals
Council South Africa, good for seventh in the global rankings.
Revised NDC, climate change bill
In September, South Africa's government approved plans for a more
ambitious GHG emissions target for the coming decade than
previously expected.
South Africa's emissions target range is 398-510 million metric
tons (mt) of CO2-equivalent in 2025 and 350-420 million mt of
CO2-equivalent in 2030 under the plans approved by the Cabinet. The
2030 target range in March's draft NDC was 398-440 million mt
CO2-equivalent. South Africa's first NDC, submitted in October
2015, committed to emissions in a range of 398-614 million mt
CO2-equivalent for 2025 and 2030.
South Africa's cabinet approved a plan to reach net-zero
emissions by 2050 in September 2020.
This September, the cabinet finalized the NDC and the
Climate Change Bill that will lay out the roadmap to achieving the
goals spelled out in the NDC. The bill is due to be presented to
parliament any day now. Trade associations expected it to be put
before the National Assembly 1 November, although local elections
were taking place the same day. A spokesman for the Department of
Forestry, Fisheries & the Environment did not respond to a
Net-Zero Business Daily inquiry on its progress.
The bill will enhance adaptive capacity, strengthen resilience,
and reduce vulnerability to climate change, as well as spell out
that adaptation and mitigation should be based on the best
available science, evidence, and information, the ministry said
when announcing its approval by the Cabinet in September.
A segment of the decarbonization plans and shift away from
coal-fired generation involves increased renewable power capacity.
The South African government has an ongoing program known as the
Renewable Energy Independent Power Producer Procurement Programme
to encourage the diversification of the country's power stack.
Renewable RFP results
The Department of Mineral Resources & Energy on 28 October
announced the preferred bidders
under the fifth iteration of the program, which sought 2.6 GW of
proposals—consisting of 1.6 GW of onshore wind and 1 GW of
solar photovoltaic (PV) capacity. The request for proposals attracted 102 bids from
potential project developers, equivalent to more than 9.6 GW of
capacity.
The selected 25 bidders account for 2.583 GW of capacity,
divided into 1.608 GW of onshore wind and 975 MW of solar PV,
Minister of Mineral Resources and Energy Gwede Mantashe said. The
projects are expected to start generating electricity as early as
April 2024.
The energy ministry said the majority of bids were well
prepared, resulting in a high level of competition. The weighted
average price was R473.94/MWh ($30.78/MWh), the lowest price
achieved by any of the government tenders since the program was
launched in 2010, it said, adding that the average price would have
been even lower if not for grid constraints that prevented some of
the cheaper projects from being selected.
The South African government's next renewables tender will be
launched by January 2022 at the latest, the ministry said. It too
will seek 1.6 GW of onshore wind and 1 GW of solar PV project
capacity.
Following the release of the latest tender's results, South
African Wind Energy Association (SAWEA) Chair Mercia Grimbeek on 28
October said it was "a huge step towards rolling procurement, which
is what the country and wind power sector needs, in order for
renewables to be able to deliver adequate energy to the country and
help shift the economy onto a positive trajectory."
"Consecutive bidding rounds will enable local manufacturing
facilities to be re-established and the potential expansion of
already operating manufacturers, which is crucial in creating long
term sustainable jobs," she added.
However, SAWEA warned that to enable the required quantity and
quality of components will require at least two to three years of
investment and development, reinforcing the need for rolling
procurements, without interruptions or delays.
Crispian Olver, executive director of South Africa's
Presidential Climate Commission, told SAWEA's annual conference 7
October that transitioning South Africa's power system to net-zero
will require the deployment of roughly 150 GW of wind and solar
capacity by 2050, a rate of 4 GW each year, which he said would be
roughly 10 times the current pace of newbuild.
Even so, South Africa is way out front compared with its
neighbors when it comes to wind installations, so the Global Wind
Energy Council on 30 September launched an initiative to
accelerate deployment of the technology across the continent. GWEC
estimates Africa is only tapping into 0.01% of its wind
resource.
IHS Markit data show South Africa had 6.7 GW of renewable power
capacity installed at the end of 2020, which 2.5 GW was wind and
3.7 GW solar PV, including distributed generation systems. It also
has 500 MW of concentrated solar power. IHS Markit forecasts the
total will reach about 8 GW by the end of 2021.
Pathway away from load shedding
The additional capacity is badly needed. Eskom's fleet is in
shocking disrepair. On 2 November, the dominant power producer
warned of load shedding a generation unit at the Kusile power
station tripped, and a unit at the Matimba and Arnot power stations
failed to return to service as anticipated. Eskom said the
constraints could be expected to persist for the rest of the first
week of COP26, which may require load shedding to be extended.
While nearly 18 GW of capacity is shuttered due to unexpected
outages, planned maintenance is being carried out on a further 3.45
GW of capacity, Eskom said. The company asked South Africans to
"continue using electricity sparingly" as a result.
The outages have been worsening, and South African companies,
including the powerful mining industry, have had enough. They have
banded together to work on pathways to improving the country's
energy industry, launching the Energy Council of South Africa 2
November.
The initiative is led by CEOs from Anglo American, Central
Energy Fund, Exxaro, Industrial Development Corporation of South
Africa, Sasol, TotalEnergies South Africa, and Naamsa.
Such a collaborative effort was "long overdue," Department of
Mineral Resources & Energy Deputy Minister Nobuhle Nkabane said
in a 2 November speech. The energy sector must
contribute more to South Africa's GDP and the approach must be
systematic; there can't be any shortcuts, he said.
Energy is the "flywheel" for economic reconstruction, Nkabane
said, but there is an obvious need for coordination. By 2030,
coal's share of South Africa's generation portfolio will be under
60%, but the country won't be ditching it. "Our support on coal is
not anti-climate change, but a pragmatic approach based on what we
can afford," he said, adding that it would provide South Africa
with a consistent supply of baseload power.