The Fossil Fuel Foundation (FFF) put up a good show at last week’s coal event in Johannesburg. The message was driven home that there must be full cognisance of the importance of coal to South Africa, even though the product is being cold-shouldered because of the need to decarbonise the world.
Carbon capture and storage is a way of winning back coal’s acceptance from an environmental point of view, but the costs associated with this burial of carbon in some rocky underground cavity are bound to weigh on coal’s use from a cost point of view.
The FFF’s reportage that investment is not being made in new coal mines is understandable. Some prospective investors are marking time and others have moved on to the provision of renewable energy.
Getting a loan from a bank to build a new coal mine is no longer an easy thing to do, but getting a loan to build a solar park or a wind farm is.
Because of the high power tariffs that Eskom is charging, some businesses have found that it pays to self-generate. Putting a solar panel or three on the roof of one’s factory can pay its way these days and turn one into a master of one’s own energy destiny. That can be a big business plus during these times of load-shedding.
The world is having to live with technological disruption. Nothing is straightforward any more. There is always a new technology popping up somewhere to keep us all on our toes.
But the reality remains: coal will be with us for decades to come. Without Eskom burning it, we will not be able to turn on as many lights as we wish.
That alone is likely to ensure that sufficient investment is made in coal to supplement renewable capacity and to back things up when the sun is not shining and the wind is not blowing.
A balance has to be reached between using the traditional and using the new.
In the meantime, those who say burning coal to generate electricity is the cheapest way of energising the world are being challenged by the day.
In the US, financial advisory firm Lazard is adamant that an inflection point has been reached that makes new renewables cheaper than existing coal-fired power stations, while, in South Africa, energy spokesperson Professor Anton Eberhard says that the prices for renewable energy are likely to drop still further.
Some of those who attended the FFF event continue to contend that coal-fired power generation remains the cheapest, but even they are becoming less strident in their utterances.
Coal will not be able to hold onto its 87% dominance of the domestic power generation industry. Besides the climate change considerations, it will be the lower cost of sun and wind power that will ultimately weigh it down most.