Home South African R130 billion funding only the first step for Eskom

R130 billion funding only the first step for Eskom


Eskom CEO André de Ruyter said the COP26 donation is only the first step in South Africa’s ’just energy transition’.

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DAYS after the announcement that South Africa would receive R130 billion from wealthier nations to end the country’s reliance on coal, embattle Eskom struggled to keep the lights on again.

While Eskom’s chief executive André de Ruyter welcomed the COP26 climate summit deal, he cautioned it was only the first step in South Africa’s “just energy transition” that would take place over the next 15 years.

President Cyril Ramaphosa hailed the deal as “a watershed moment” for the renewable sector in which his brother-in-law and mining billionaire businessman Patrice Motsepe’s African Rainbow Energy and Power (AREP) has continued its expansion.

AREP won just under half of the projects awarded in the state’s latest push for green energy. The company, a member of the Ikamva equity consortium, won preferred bidder status for 12 of the 25 projects awarded the state’s renewable power plan announced last week.

De Ruyter said the COP26 announcement would enable “South Africa to meet its new and ambitious nationally determined contribution targets”.

But the Eskom boss said the utility would require $35bn over 15 years to wean South Africa’s 13 coal-fired power stations to more renewable energy.

South Africa presently emits the most greenhouse gases on the continent because of its reliance on coal for electricity, a blight on its carbon footprint that US president Joe Biden, at COP26, said they wanted to help tackle. “We want to help transform their economy to a clean energy economy, more quickly.”

On Friday afternoon, Eskom went from announcing load shedding Stage 2 to load shedding Stage 4, in a matter of hours. This time it was attributed to generating units having shut down at the Kendal power station and the trip of units at both Tutuka and Matimba power stations.

Energy analyst and managing director at EE Business Intelligence Chris Yelland said he was pleased to hear the COP26 announcement because South Africa’s carbon emissions were the highest in Africa.

“To reach a partnership agreement to gain access to funding that helps us do what we need to do, helps South Africa and helps decarbonise the world.”

Yelland added: “If we use this money correctly and we carry out our commitment to decarbonising our economy, this is just the beginning of our green finance.”

Yelland believed that the most efficient way to use this funding was to combine solar, wind, gas-to-power and battery energy storage systems.

“These offer the least-cost pathway for new generation capacity while generating the least amount of carbon emissions.”

The energy expert said one of the highlights of transition was two-fold job creation.

“There are jobs that occur in the construction phase and also in operation and maintenance,” Yelland said.

Additionally, he shared that more jobs were created in the renewable energy sector, despite it currently being a significant minority in the energy sector.

Senior energy analyst at Greencape Collins Nyamadzawo said choosing renewable energy sources was advantageous in many ways.

“They are a vehicle to reduce the rising global temperatures and the subsequent climate change catastrophe.”

Nyamadzawo said an ideal energy policy for South Africa was aimed to reduce the cost of electricity while increasing grid reliability.

“It looks at environmentally friendly and socially inclusive ways of powering our homes and industries,” he said.

He added: “This move also improves the country’s attractiveness as an investment destination. Now that we know better, we must do better.”

Nyamadzawo echoed Yelland’s words on how renewable energy will be pivotal for job creation.

“The growth of renewable energy means new jobs, some skills are transferable and some of them will be new jobs altogether if you look at the whole value chain.”

Independent energy analyst Andrew Kenny was critical of renewable energy sources for South Africa.

“It is good to have renewable options, but wind and solar are useless for good electricity. They are unreliable,” he said.

He added: “A good nuclear plant will last for 60 years and produce affordable and reliable electricity.”

Kenny said South Africa should learn from European countries such as Germany and Denmark.

“They moved towards solar and wind power and now their electricity prices are going through the roof, people can’t pay their bills and industries are shutting down.”

He added: “Solar and wind don’t work for good electricity, R500 billion is an enormous sum and that is crazy.”

He previously used an example of Australia, which closed coal stations, built wind turbines and some solar plants, and supplemented them with natural gas, which Australia, unlike SA, has in abundance. But electricity prices soared.

The South African consumer can ill afford  hefty electricity bills after years of power outage frustrations

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