South African state-owned utility Eskom will shut down 8-12GW of coal-fired power plants — or around 30pc of its current installed capacity — over the next 10 years as it decarbonises its business.
The average age of Eskom’s coal-fired power plants, excluding the newly built Medupi and Kusile facilities, is 41 years. It will cost the utility more than 300bn rand ($20bn) to make its ageing power plants compliant with minimum emissions standards.
“Taking into account that Eskom does not have the money and that this exercise will not add any generation capacity, this is quite a difficult balancing act,” Eskom chief executive Andre de Ruyter said.
Instead, the utility wants to use its funds to accelerate the repurposing of its power plants and actively pursue a share in renewable energy allocation.
“The costs for renewable energy technologies continue to decline and will add generation capacity sooner than other technologies, thus reducing the risk of load shedding,” de Ruyter said.
Eskom earlier this month began repurposing its Komati coal-fired power plant into a solar photovoltaic facility supported by 244MWh of battery storage. The coal-fired plant will be completely shut down by October 2022.
Komati will serve as a flagship project for subsequent projects to convert coal-fired plants at Grootvlei, Hendrina and Camden, all of which are scheduled for retirement by 2025.
South Africa should aim for the local manufacturing of renewable energy components such as turbines and batteries, as this can significantly reduce costs and boost economic growth, de Ruyter said.
“The recently released Intergovernmental Panel on Climate Change report makes it clear that urgent action is required to decarbonise our planet if we are to avoid the catastrophic impacts of anthropogenic climate change,” de Ruyter said. South Africa has to seize the opportunity to reverse “the vicious cycle of deindustrialisation and unemployment” and rebuild its industrial base by “pivoting to a cleaner and greener future”, he said.
In light of the inevitable global shift to a green economy, accessing green financing to create stimulus for reindustrialisation is critical, de Ruyter said. Eskom continues to engage with international developmental financing institutions to secure a lending facility that will help it implement its strategy and facilitate a just energy transition (JET) in South Africa.
A JET is a socially managed and agreed-upon path to the phasing out of fossil fuels while ensuring that communities and employees which are dependent on the carbon-intensive economy have access to alternative livelihoods.
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