Long road to renewables for coal-rich South Africa

A coal-rich developing nation, South Africa has a long haul ahead to a low carbon future. Saliem Fakir and Monica Graaff look at the hopes – and hurdles – on the energy front.

Until ‘Black Thursday’, a day in late January 2008, the thought that South Africa had any sort of energy problem was far from most people’s minds. Then the lights went out in many parts of the country, igniting the ire of millions of consumers and costing industry billions of rand in lost earnings. The state-owned monopoly energy supplier Eskom struggled to shed its dwindling energy load as best it could, making ‘load shedding’ a dirty word and Eskom the brunt of many a bad joke.

While people were braying for answers about why a coal-rich country with a booming economy could suddenly find itself with an energy shortage, few realised that a far deeper energy crisis was unfolding behind the scenes. Or that a combination of cabinet ministers, scientists, negotiators and representatives from all walks of life were doing groundbreaking work in trying to tackle it.

The project commissioned by cabinet was dubbed, rather weightily, the Long Term Mitigation Scenarios (LTMS). Its task was to work out what to do about some rather uncomfortable facts. For although South Africa produces only a small proportion of the world’s carbon dioxide, this is still far more than its fair share. Per capita, only the member countries of the Organisation for Economic Cooperation and Development pump out more, while in terms of carbon intensity, South Africa’s emissions per unit of GDP are second only to China’s.

With international climate change mitigation commitments about to move up a rung at the Copenhagen negotiations, the Government realised it had to be ready to argue its case from a position of strength. As a developing nation, South Africa needs to ensure that it has sufficient energy to be able to meet its growth targets. But as a bad boy when it comes to emissions, it needs to show that it has a plan to clean up its energy profile and is able to find the funds to do so.

The remarkable achievement of the LTMS process [see sidebar] was that high-level representatives from all sectors of the economy, including the cabinet, bought into its most demanding emissions reduction scenario – a 30% cut by 2050.

Pockets of hope

When it was adopted by the Cabinet in 2008, the World Bank hailed it as “the first of its kind in a developing country”, an example of “international best practice” and “rigorous in its stakeholder consultation and consensus building”. It helped create a successful platform for the former Environment Minister, Marthinus van Schalkwyk, to lead the developing nations’ agenda at significant pre-Copenhagen negotiations. And there is a reasonable chance that it might be replicated elsewhere in the world, too.

But how does this square with what can be expected in the near future for the country’s energy profile? How green will South Africa’s energy production become?

In the roadmap to reducing the country’s emissions by nearly a third over the next 40 years, the energy sector is target number one. This is hardly surprising as South Africa’s economy is addicted to coal. Close to 90% of its electricity is generated from coal – and dirty coal at that. It burns inefficiently, and contains high levels of sulphur. With carbon emissions set to double by 2020, something has to be done about this – unless South Africa wants to become a pariah state.

There are good arguments for why the country needs to deploy alternatives to coal. South Africa has an unlimited furnace of solar energy to be tapped, along with thousands of kilometres of wind-swept coastlines, making it an ideal location for wind and solar energy plants.

Sadly, although the power crisis of 2007 created frenzied interest in energy efficiency and alternative energy solutions, the current economic downturn and subsequent decrease in energy demand has seen the Government allowing a sense of complacency to creep in.

Energy efficiency efforts have dwindled. Even solar water heating systems – a no-brainer for sunny South Africa – are rarely talked about. A national effort by Eskom to subsidise one million residential solar water heating systems has resulted in a pitiful total of less than a thousand residents taking up the offer. This is not only due to complacency. Even after subsidies, capital costs of solar water heating systems remain high due to import duties, and there is no significant local manufacturing sector. However, there are pockets of innovation and hope. At the beginning of 2009, the Government announced a decent set of renewable energy feed-in tariffs. It followed this up with a 15% tax rebate on capital costs for companies making investments in energy efficiency.

Many local authorities also see efficiency programmes as quick wins. Some, like the Nelson Mandela Bay Metro in the Eastern Cape, and the city of Cape Town itself, are continuing to pursue solar water heating systems despite financial obstacles. Cape Town plans to introduce regulations requiring them to be fitted on new buildings, and they’re even being installed for free in some poor areas, such as the low-cost housing development of Kuyasa on the city’s outskirts [see ‘Harnessing sunshine’].

But despite the country’s obvious potential for renewables, the Government’s policy response so far has been ‘to go clean coal and nuclear’, rather than make a radical break with the past. It has justified the nuclear option on the basis of its anticipated future carbon reduction obligations, not to mention its rich resource base of uranium. Fierce lobbying by foreign nuclear power companies is already under way to secure lucrative contracts to build four new nuclear power plants.

In its efforts to make coal cleaner, the Government launched a carbon capture and sequestration (CCS) centre in April 2009. Its aim is to establish a pilot CCS project for coal-fired power stations and coal-to-liquid plants by 2020, with the long-term goal of meeting 5% of its carbon reductions through CCS – capturing about 40 million tonnes of CO2 a year over 100 years.

Included in the equation, however, is the need to put 40 new coal mines into production to supply the demand from four new coal-fired power stations. As a coal-rich nation, South Africa has the resources to do so, but – CCS aside – this is hardly ‘going green’. For the energy mix to be significantly transformed, two streams of action need to converge. The first is strong leadership from Government and business, who have the leverage to mobilise capital and expertise. The second is the creation of an enabling environment through legislation and positive incentives that mobilise the energy and enthusiasm of its citizens.

South Africa’s roadmap to make this happen – the LTMS – provides a foundation to address its dirty energy crisis. Ignoring the possibilities and persisting with carbon intensive solutions would only make South Africa an international carbon pariah in decades to come.

4 December 2009

Monica Graaff and Saliem Fakir