Page 15 - AfrElec Annual Review 2021

AfrElec AUGUST AfrElec

Eskom’s de Ruyter lays out

Eskom’s green needs

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

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