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Can SA provide a template for Africa’s just energy transition?

AT the COP26 climate conference in Glasgow last year, climate experts demonstrated how Africa can contribute to global emission reduction owing to its massive green energy potential.

A chorus of how the continent could benefit from the dynamics of the global energy transition reverberated throughout the 12-day conference.

But unlike the previous forums where rich nations only paid lip service to Africa’s bid to decarbonise, the aforementioned states pledged financial incentives to the vision, starting with South Africa which is still dependent on coal.

British Prime Minister Boris Johnson told the meeting in Glasgow that the multi-billion dollar initiative would help the world reach its climate targets.

According to Johnson, the move was part of a push to “choke off international finance for coal”.

The 8.5 billion US dollars pledged is expected to be invested over the next five years to support South Africa’s decarbonization efforts.

According to a new report from the World Economic Forum, held in Davos last month, SA’s coal-dominated economy will require at least 250 billion US dollars over the next three decades to close down its coal-fired power plants.

By offering South Africa financial incentives to stop burning coal, the West is seen as killing two birds with one stone –– helping Africa abandon dirty fuels while ensuring it remains energy secure.

It also shows the West is finally listening to energy stakeholders in Africa who have reasoned that the continent can’t be forced to dump fossils without a stable alternative.

South Africa’s huge energy requirements and ageing generating coal fleet offer a great opportunity to showcase how this can be done, according to many players, like Mojabeng Manthata, Acting Head, Energy, Environment and ICT, at the Development Bank of South Africa (DBSA). The country’s coal-fired power stations are on average over 50 years old.

“We have both the challenges and the opportunities and can serve as an example to the rest of the world,” Manthata said of the challenges of transitioning to green energy, at the #EnlitAfrica2022 conference in Cape Town, according to Energy News Africa.

“We now have the opportunity to replace assets for the future,” she said.

Global supply chain disruptions due to the war in Ukraine that have pushed up fuel prices and triggered shortages in Africa
have shown that while many countries are still vulnerable to energy disruptions, those in Africa are often more disproportionately affected.

African countries will be watching closely to see whether promises from the UK, US, France, Germany and the EU to help South Africa dump coal, were not just talking points.

Efforts to decarbonise Africa come as countries in that continent continue to discover vast oil and gas deposits, the latest being Namibia.

According to S&P Global Platts, nearly 40 per cent of global new gas discoveries in the last decade were in Africa, mainly in Senegal, Mauritania, Mozambique and Tanzania, with 17 countries already producing gas with seven net exporters and seven net importers, according to the African Energy Commission.

It is on that premise that advocates of fossils have called for a just energy transition in Africa, given it only contributes less than 4 per cent of the world’s greenhouse gas emissions.

US Treasury climate counsellor John Morton flagged any public steps by South Africa to integrate more coal into its future energy mix as inconsistent with the Just Energy Transition Partnership (JET-P) signed at COP26, according to South African publication, Engineering News.

“While South Africa has made great progress in carrying out necessary reforms, we must be cognizant of new and avoidable challenges to South Africa’s clean-energy future,” he said during the Enlit Africa conference.

“Any new coal generation capacity would be inconsistent with South Africa’s updated Nationally Determined Contribution (NDC) and would be inconsistent with the spirit and intentions of our shared partnership, which aims to expedite South Africa’s transition away from coal and toward a cleaner and greener energy future,” Morton said.

But with a pressing need for new energy sources and with ever-increasing stocks of gas, oil and coal, thanks to new discoveries, African countries are unlikely to sit back and wait for very long.

South Africa’s Integrated Resource Plan of 2019 (IRP2019) still allocates 1 500 MW of new coal to be introduced to its fleet before 2030.

The head of the country’s huge, state-owned, electricity supplier, Eskom, has said that even if coal is removed, the country will still need stable generation and has suggested that increasingly available regional supplies of gas be used instead.

And from across Africa, the chorus for the continent to be offered special dispensation and continue to pump oil, burn coal and develop gas, has been growing, with many questioning the need for renewables, since African countries already “have” large reserves of available carbon based fuels.

However, the availability of financing for major investments in clean energy like wind, solar and green hydrogen, could still be the game-changer. Most gas and oil reserves are fairly recent discoveries, meaning they all require significant investment infrastructure. While that is usually provided by oil and gas majors, the actual power generation facilities are not. And with China having pulled out of financing new coal stations outside of China, the financing opportunities – as well as high costs and complexities – could push countries to look more closely at renewables.

While the “just energy” narrative appears to be growing, according to S.A-based Centurion Law Group, a just energy transition in Africa is one that ensures there are energy banks under JET-P that mobilise finances into the sector.

“In order for Africa to achieve its goal of industrializing the continent, it is critical that it has access to reliable, affordable, and sustainable modern energy services as well as adequate financing,” it said in its analysis in April.

Reports from the African Development Bank (AfDB) show that bank financing in Kenya, Morocco, and the Democratic Republic of Congo has supported geothermal, solar and hydropower projects that are clean, renewable, and which bring electricity to undeserved households and small business markets.

OPEC Secretary-General Mohammed Barkindo and his counterpart at the African Petroleum Producers Organisation (APPO) Omar Farouk Ibrahim have insisted that only a “dual carriageway” will propel Africa’s energy agenda –– where fossils and renewables are ingredients in the continent’s energy cocktail.

At a meeting in Brazzaville, Congo last year, the two industry captains pushed for an adaptive and market-driven approach to the energy transition, where hydrocarbons are not excluded or eradicated.

“We will not allow billions of barrels of oil to go to waste and we will not be bamboozled into projects that we don’t need – ones which will not address energy poverty. We need to sit down and have an honest conversation about the energy transition,” Ibrahim said. Those sentiments were echoed by Barkindo.

“We in OPEC also categorically reject the narrative that the energy transition is from hydrocarbons to renewables because this narrative is completely misrepresenting science,” Barkindo reiterated.

“We believe that all sources of energy are required today and in the future to meet the challenges of climate change and future energy demand. According to our World Oil Outlook at OPEC, energy demand will grow by a minimum of 25 per cent between now and 2045. Therefore, we have to promote all energy resources in an efficient and sustainable manner. Our industry, therefore, is part of the solution to climate change.”

But the EU appears cognizant of that.

Early this year, Brussels announced plans to label natural gas and nuclear projects as ‘green’ investments.

“Taking account of scientific advice and current technological progress, as well as varying transition challenges across the Member States, the Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future,” the European Commission said in a press statement released on January 1.

According to the Commission, gas and nuclear projects will be considered green if they produce emissions below 270g of CO2 equivalent per kilowatt-hour (kWh).

Vijaya Ramachandran, director for energy and development at the Breakthrough Institute in Berkeley, California told bird that the Commission’s decision was a step in the right direction but should be followed through with action.

“If the EU acts in a fair manner, it will afford Africa a just energy transition by enabling investments in natural gas just as it does for its member countries,” she said.

“However, it may decide to follow one set of policies at home (classifying natural gas as green) while still opposing the financing of natural gas by the World Bank and the European Investment Bank. If this is the case, these actions can be termed immoral and unjust; a form of green colonialism.”

Balancing a “just transition” that takes into account the needs of future generations (and their right to a stable climate as well as stable and abundant power supplies) will take nuance, good communication, political will and clear heads. With its abundance of sunlight, wind and coal, South Africa could well become the test case for how this works elsewhere, now and in the future.

/bird story agency



By SETH ONYANGO, BIRD STORY AGENCY

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