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Eskom’s de Ruyter lays out Eskom’s green needs
SOUTH AFRICA
SOUTH Africa cannot ignore its carbon foot- print, and state-owned Eskom must pivot to green energy, Eskom CEO André de Ruyter said this week.
He said in an online lecture at the Univer- sity of Pretoria that Eskom must work towards a greener future in order to combat climate change.
“While it may be tempting to demand that the developed world should decarbonise, and allow South Africa to fuel its growth with coal, the reality is starkly different. Our economy, on a per capita basis, is 25% more carbon intensive than China, and double the global average. South Africa emits roughly half the total carbon emit- ted by the African continent, and Eskom emits about 44% of the total South African carbon emissions. We therefore cannot ignore our car- bonfootprint,”DeRuytersaid.
His comments come as Eskom is set to be rad- ically overhauled, with the company expected to complete its unbundling into separate transmis- sion, generation and distribution divisions by December 2022
Transmission is expected to be completed by this December, while the separation of the generation and distribution divisions is set for December 2022.
He warned that South Africa could not operate in a vacuum, with the country par- ticularly exposed to Europe’s proposed Green Deal changes, which could slap heavy taxes on exports.
“In addition, the world is penalising heavy carbon emitters. The European Union’s plan to implement carbon export tax by 2023, as part of its ‘Fit for 55’ European Green Deal package, will have a negative impact on South African indus- try. If the proposal is adopted, the European Union will reportedly impose a levy on imports in carbon-intensive sectors such as steel from countries with lower environmental standards than itself.”
“Pivoting to green energy will... create a com- petitive advantage for South African exports. Persisting with coal will lead to another era of isolation and punitive trade measures,” De Ruyter said.
Turning to Eskom itself, he said that the com- pany must now pursue a just energy transition (JET) and embrace renewable energy, while at the same time reducing its coal consumption and
CO2 emissions. He noted that the cost of renew- able energy was falling, and that wind and solar projects were faster to build that gas, nuclear or coal.
“The costs for renewable energy technolo- gies continue to decline and will add generation capacity sooner than other technologies, thus reducing the risk of load shedding. For example, solar photovoltaic (PV) projects take between 18-24 months to complete, wind projects have a lead time of between 24 and 36 months, and gas requires 24 to 60 months to complete.”
He noted that “coal and nuclear projects take between 10 and 12 years, and 12 to 15 years, respectively.”
“If Eskom embarks on the JET timeously, we can use the funds for minimum emissions stand- ards compliance to build renewable energy. To makecurrentandageingpowerstationscompli- ant, Eskom must spend more than ZAR300bn ($17bn). Taking into account that Eskom does not have the money and that this exercise will not add any generation capacity, will consume signif- icantly more water and require transportation of limestone, this is quite a difficult balancing act,” De Ruyter noted.
He also explained that investing in coal was no longer possible, as sources of capital are now wary of the dirty fuel.
“It is becoming virtually impossible to secure funding for new coal generation projects, and insurance companies are targeting large carbon emitters with punitive premiums, or outright refusal to cover, as they seek to address the root cause of increased claims caused by climate change,” De Ruyter said.
Another option for South Africa country is hydrogen. The country could produce 3.8mn tonnes per year by 2050, but only with a sup- portive commercial and policy environment. By starting soon, production could reach 0.75mn tpy by 2030.
A recent study from IHS Markit found that South Africa was well-placed to pursue a national strategy based on low-carbon hydrogen.
Hydrogen offers South Africa a “win-win” for the government’s employment and decar- bonisation goals, as the country can use its wind and sun resources to produce low-carbon hydrogen for export and for use in the domestic economy.™
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w w w . N E W S B A S E . c o m Week 33 19•August•2021