Africa’s Eskom seeks $10 billion for shift from coal
Eskom, Africa’s largest greenhouse gas emitter, is pushing a $10 billion proposal to international lenders that would see it halt the vast majority of its coal-fired power plants by 2050 and embrace renewable energy.
A senior Eskom reveals that talks with development financing institutions like the World Bank and the African Development Bank have already begun.
“It’s a lot of money, so what we are putting on the table is to say to funders: South Africa can offer you the biggest point source of carbon emissions reduction in the world,” Mandy Rambharos, general manager at Eskom’s Just Energy Transition office said.
Eskom, which provides more than 90% of the country’s power primarily through coal combustion, is seeking about $7 to $8 each tonne of carbon dioxide equivalent it reduces from its greenhouse gas emissions. Eskom emits around 213 million tonnes of CO2 equivalent per year.
The plan is to secure some cash before the COP26 climate meeting in Glasgow, which will take place in November. The utility is already considering using solar and battery storage to “repower” its Komati coal plant, and could propose the proposal at COP26 to demonstrate its commitment to reducing emissions.
Eskom is modeling many scenarios to accomplish its goal of “net zero” emissions by 2050, according to Rambharos.
Bunnaj Africa learnt that the least aggressive path is the one the government laid out in a 2019 document called the Integrated Resource Plan, which envisaged Eskom shutting down some 35,000 megawatts (MW) of coal by 2050. As of March 2020, Eskom had around 41,000 MW of installed coal-fired capacity.
According to reports, bolder one would see even Medupi and Kusile, which will be two of the world’s largest coal plants when fully operational, shuttered in the 2040s, at least 20 years ahead of schedule and leaving Eskom with no coal by 2050 from 15 stations now.
While Eskom may employ natural gas as part of its energy shift, Rambharos stated that the ultimate goal is to replace coal with renewables. “That is the future. I don’t think we can look at 2050 and still see fossil fuels in there to be honest.”
As investors and governments grow more aware of climate problems, analysts have identified South Africa’s economy’s carbon intensity as a major risk, and Rambharos believes it is time to act.
“We will be left in this little bubble where we are not going to be able to export our wine or our fruit or our cars if we don’t transition,” she said. “The whole world is transitioning, we have to get on this bandwagon – for South Africa to remain competitive and for our economy to grow.”