SA commits to green energy but can't ditch coal yet
Although South Africa has committed to driving renewable energy, the country cannot ditch coal yet.
This was the word from energy minister Jeff Radebe yesterday during Africa Utility Week in Cape Town.
In his welcome speech, Radebe said through the Renewable Energy Independent Power Producer programme, the Department of Energy has sent out strong signals with regard to SA as an investment destination for energy infrastructure development.
"We have successfully implemented bidding rounds to which the response has been over R250 billion in investment to date," he said.
However, the minister said with regard to SA's energy mix, the country cannot ignore the fact that it has abundant coal reserves.
"The price of local coal remains relatively low. However, this is counter-balanced by the high carbon content that coal has, and this cost was internalised when we analysed policy options where emissions reduction targets and carbon taxes are introduced."
According to Radebe, the energy sector alone contributes close to 80% towards total emissions, of which 50% are from electricity generation and liquid fuel production alone.
"While a paradigm shift is required for these emission reduction targets to be realised, as government we cannot do this in a manner that is unjust relative to those that would be negatively affected by these adjustments.
"Our vast coal deposits cannot be sterilised simply because we cannot explore technological innovations to exploit the coal. The timing of the transition to a low carbon economy, in line with our accession to the Paris Agreement, must be in a manner that is not insensitive to the potential impacts on jobs and local economies."
He noted that carbon capture and storage, underground coal gasification, coal to liquids and other clean coal technologies are critical considerations that will enable SA to continue using its coal resources in an environmentally responsible way.
Radebe added that with the increased penetration of renewable energy technologies, particularly wind and solar, the need for gas infrastructure has become critical.
"Southern Africa will be able to expand electricity generation through the use of gas given the huge potential and opportunity in this regard. For South Africa, we were excited a few weeks ago when Total announced the Brulpadda resource discovery in the Outeniqua Basin."
He pointed out that Schedule 4B of the Constitution of SA gives the mandate to municipalities to undertake electricity reticulation, and municipalities are also keen to generate their own power for various reasons.
To date, he said, residents have installed approximately 150MW of rooftop photo-voltaic (PV) systems in various municipalities.
"As Eskom electricity tariffs rise, we can expect more rooftop PV systems to be installed," said Radebe.
Nonetheless, he noted that embedded generation systems based on solar and wind technologies are tricky to manage in a power system, given the variability of their energy production.
"Insofar as the legislative and regulatory frameworks that enable embedded generation technology options we have outlined, we have developed a framework under various amendments to Schedule 2 of the Electricity Regulation Act, relating to circumstances under which a generation licence may not be required."
Energy regulator NERSA has called for public comments prior to concurring to government's proposals.
The Schedule 2 amendments will address the constraints related to licensing potentially hundreds of thousands of rooftop PV systems, biogas and other small-scale embedded generators smaller than 1MW, and unlock investment in that space, the minister said.
Meanwhile, Radebe's comments regarding the future of coal was labelled typical "double speak" by energy expert Ted Blom.
According to Blom, the minister fails to see that coal does not necessarily have to be "dirty". He explained there are countries like the US where one can stand at a power station and there is clean air.
"So, the technology for clean coal is there. The point is, Eskom is bankrupt and does not have the money to buy and properly invest in this technology." Blom said there should be more pressure on Eskom to keep the air clean. "They can do it, but there is no political will."
Eskom CEO Phakamani Hadebe said the power utility is looking at a plan for cleaner coal.
"In terms of the IRP [Integrated Resource Plan] proposals, we are looking at coal being 44% of our energy supply by 2030 and it will then reduce to 30%.
"So, it questions our own strategies on what needs to be done. What we decided to do, especially in the face of diminishing funding for coal, is to work with communities so that there are other options to grow (local) economies rather than just closing shop."