South Africa is world’s 12th serious CO2 emitter

What can rich countries do to help the developing world battle climate change? What’s happening in South Africa right now embodies that central question of fairness.
Africa’s third largest economy is also the world’s 12th most serious emitter of carbon dioxide. At COP26 in Glasgow last November — the UK, US, France, Germany and the rest of the EU joined together to allocate $8.5 billiion in seed money to South Africa. It’s the world’s first Just Energy Transition Partnership (JETP), a crucial effort to ease the economic and social disruptions that poorer countries face as they attempt to lower their carbon footprints.
The money is meant to allow South Africa to retire a colossal but creaking (and corruption-riddled) fleet of coal plants. Just as importantly, the funds will support the workers who will need to find new jobs. In the country’s coal belt of Mpumalanga, some 120,000 workers are employed in coal production, mining and transportation. The region already has a 35% youth unemployment rate. The country must focus on concerted reskilling because there’s great skepticism that high-tech jobs in green hydrogen or electrical vehicles will go to former miners.
If South Africa can pull this off, it will become a template for action elsewhere. The coal plants that produce 84% of South Africa’s energy are run by state-owned Eskom Holdings SOC Ltd. The gigantic public utility has been failing for more than a decade — and not just financially. Many of the power plants are spluttering to the end of their lives.
This year is the worst ever, with South Africans suffering through more outages — called “load shedding” — than before. Considered uninvestable by international finance, Eskom has been a drag on the whole economy as it soaks up huge government subsidies.
The answer is to restructure Eskom into two parts: one with good finances and the other with distressed assets that can be slowly liquidated. With a “cordon sanitaire” put around the poorly performing parts, “good” Eskom — with funds from the World Bank and other international financial institutions — can become a platform for reliable and clean energy generation, including renewables.
That’s exactly what Eskom is trying to do at its Komati power station. For 60 years, Komati was one of South Africa’s largest coal plants. This month, however, its last coal-burning unit will be turned off. A new workshop is already making containerized solar microgrids. These are repurposed shipping crates full of batteries powered by solar panels that will be deployed to far-flung rural communities currently off the electricity grid. Eskom also wants Komati to make agrivoltaics — solar panels erected in fields amid growing crops. Additionally, the utility will lease land around the power plant for solar farms.
But this is still a transition, not yet a termination. The country still faces tough questions about where to focus its climate investment. For example, should it put funds into improving the grid in a poorly-served part of the country that, nevertheless, has the potential for substantial growth in solar and wind power? Or should financing be targeted at mining centres like Mpumalanga, which are already electrified but will need the jobs created by the infusion of cash?
Eskom also has to maintain aging power stations and upgrade younger ones. Coal will continue to have a role, though in gradually declining amounts as wind, solar and green hydrogen are joined by new liquefied natural gas flows. If cheaper energy flourishes, coal will fizzle out quickly.

—Bloomberg