Page 6 - AfrElec Week 22 2021

AfrElec COMMENTARY AfrElec

129.5mn tpy, the report said. the country’s coal-mining capacity.
The country’s economy remains heavily Indeed, China recently defended its coal
dependent on coal for 70% of its power gener- expansion at least in the short term, claiming
ation. South Africa currently has 18 coal-fired it did not derail its ultimate net zero goals by
power plants and two of the proposed coal mines 2060. The government holds that coal is a major
are set to supply 6.3mn tpy to existing coal power source of employment and a predictable and
stations in Mpumalanga: the 2,352-MW Arnot reliable source of energy.
power station and 3,600-MW Matla power sta- The report comes as recent rallies in coal
tion. Three of the proposed coal mines are set trading prices and a rise in US coal exports point
to supply 22mn tpy to three proposed power to a surge in demand for coal worldwide as the
stations. global economy begins to enter a post-pan-
All of these proposals, the 1,200-MW demic recovery, S&P Platts noted recently.
Thabametsi coal plant outside Lephalale in Lim- This points to sustained interest in coal as a
popo, and the 300-MW Khanyisa coal plant and generating fuel, at least in the short term, to pro-
the 4,800-MW Kusile Power Station in Witbank, vide energy to boost economic recovery.
have been heavily contested. Economic growth is the main driver of this
The environmental approval for Thabametsi demand. Platts estimated that economic growth
was set aside in November 2020 by a High Court would rise to 5.6% in 2021 after falling to 3.2%
judge due to the Minister of Environmental in 2020.
Affairs’ failure to take into account the climate Coal’s long orderbook for new mines could
change impacts of this proposed coal-fired endanger the road to net zero, which the IEA
power station, while NGOs say the environmen- has dubbed “narrow but still achievable.”
tal authorisation granted to Khanyisa expired in The IEA warned that current climate pledges
2020. made by governments would fall well short of
what is required to bring global energy-related
Focus on China carbon dioxide (CO2) emissions to net zero by
The report noted that China leads the world in 2050.
proposed coal mining capacity, with 452mn tpy Instead of new coal, annual additions of
under construction and another 157mn tpy in solar PV capacity should rise to reach 630 GW
planning, for a total of 609mn tpy of capacity by 2030, and those of wind to reach 390 GW.
under development. Coal production has been Together, this is four times the record level set
on the rise in China since 2017, but the pressure in 2020.
for new mines accelerated after the coronavirus Crucially, the IEA called for a total coal
(COVID-19) pandemic, as provinces used new phase-out by 2040, with the date for advanced
coal projects to stimulate local economies in the economies even earlier in 2030.
wake of the economic slowdown. The key issues for coal investors will be their
While the central government recently appetite for risk, as the spectre of stranded
pledged that China will aim to reach net-zero assets, which would make any coal investment
carbon emissions by 2060, coal-dependent lose money, could hold them back.™
provinces and companies are pushing to expand

P6 www. NEWSBASE .com Week 22 03•June•2021