Eskom CEO André de Ruyter has highlighted three key resource advantages that he argues could transform the coal province of Mpumalanga into a global “flagship” of the just energy transition.
In an address to the Mpumalanga Energy Summit, De Ruyter argued that the province’s skilled human resources, its access to grid infrastructure and its solar and wind resources, which were superior to those in most other jurisdictions, even if not the best in the country, placed it in a strong position to transition to renewables.
“The worst solar radiation in South Africa is orders of magnitude better than anything available in Europe, with the exception of Spain.”
De Ruyter said that the province’s coal heritage meant that it was already home to many technically skilled people, who could be retrained to build and operate renewable-energy plants, become employed in the manufacture of renewables components, or become active in other new industries emerging as a result of the repurposing of old power stations.
Eskom plans to integrate a large retraining component to the repurposing and repowering of the Komati power station, which has been identified as pilot site for its initial just energy transition roll-out later this year.
Speaking after an address by Premier Refilwe Mtsweni-Tsipane, he urged national and provincial government to pursue the development of a special economic zone in the province, where solar and wind components could be produced for domestic roll-out as well as for export.
The province’s extensive grid infrastructure was held up as a key competitive advantage to the province attracting new renewables investment, particularly given that Eskom estimated that it would take about ten years to extend the network to the Northern, Eastern and Western Cape provinces, where the country’s best renewables acreage is located.
Eskom is seeking to leverage that grid advantage in the near-term by inviting renewables developers to bid for long-term leases on grid-ready land in and around two of its power stations in the province.
De Ruyter reported that 21 bids had been received from independent power producers keen to take advantage of the market reform allowing projects below 100 MW in size to proceed without a licence and to wheel electricity over the network.
Eskom expects to announce the winning bidders by the end of June.
Making the transition a just one, however, would require a leveraging of Mpumalanga’s advantages in a way that prioritised support for workers, communities and businesses whose lives and livelihoods were tied to the coal value chain.
However, it also required an acknowledgement of the inevitability of the transition from coal, including by vested interests that were currently engaging in a “concerted fight-back campaign”.
“You would have seen media reports of extensive sabotage at some of our power stations.
“This is completely deplorable and, to my mind, utterly incomprehensible that anybody would want to deprive hospitals, schools, businesses, factories and homes of electricity through acts of sabotage.
“The irony, of course, is that those individuals engaging in these acts are, in fact, accelerating the demise of the coal fleet by making it less reliable.”
Any just transition should also seek to secure concessional financing and spend such money “responsibly, wisely and without attracting corruption”.
European Union (EU) deputy head of delegation Raul de Luzenberger confirmed that work was under way to advance the just energy transition offer made to South Africa as part of a political declaration concluded with the EU, France, Germany, the UK and the US at COP26 in November.
The political declaration included an offer of $8.5-billion to support South Africa’s transition.
“In support of this partnership, France, Germany, and the EU have committed over R50-billion for the first phase of financing, through various mechanisms, like grants and concessional loans, increasing in the future as necessary,” De Luzenberger reported.
“Together with South Africa’s Climate Finance Task Team, we are fully committed to translate the political declaration into a comprehensive financing plan before COP27.”
He promised that the financing plan would be “reflective of strong ownership by South Africa, supportive of the country’s transition efforts and aligned with your economic, social and environmental realities as well as the national approach to a just transition”.
“It is the efforts that you decide upon that we will support.”
Energy and chemicals group Sasol, which has its large coal-to-liquids complex of Secunda in Mpumalanga, indicated that it, too, aimed to pursue a just transition as it reduced its reliance on coal as a feedstock over the coming decades.
Sasol’s Victor Bester noted that a Just Transition Office has been established to support its employees and host communities as it pursued a goal of net-zero carbon emission by 2050.
“We are moving at pace with the procurement of renewable energy and we are on track to conclude the first 600 MW of contracts in the next quarter,” Bester announced.
He also reported that it was implementing projects to prepare for additional gas volumes into Secunda and reduce coal demand by 25% by 2030.
Sasol would also seek to create new business and employment opportunities in green hydrogen, by repurposing Secunda to produce sustainable products, and scaling up renewable energy in South Africa and Namibia.
Meanwhile, Eskom and the Mpumalanga Provincial Government signed a memorandum of agreement (MoA) to foster collaboration on inclusive growth, crime prevention and socioeconomic development, including through 'Just Energy Transition' initiatives.
“We believe that the MoA will enable Eskom to obtain the necessary and timeous technical, political, and security support that will strengthen and help stabilise Eskom operations in the province, as well as the timely roll-out of Eskom infrastructure delivery projects, thereby giving impetus to our collective efforts to achieve energy security for the country," De Ruyter said.