From coal to renewable energy, South Africa faces the challenge of a “just energy transition”

It doesn’t seem like it at first glance, but a titanic project is underway in South Africa. Since 2021, the country has consolidated itself as a model of North-South cooperation in terms of “just energy transition.” That year, at 26^my Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), France, Germany, the United Kingdom, the United States and the European Union put $8.5 billion (€8 billion) on the table to support the efforts to decarbonize the South African economy, one of the most dependent on coal. Three years later, although concrete achievements are still expected, the country has undertaken profound reforms to reinvent itself.

The task was not easy at all. Because when it embarks on the Just Energy Transition Partnership (JETP) in 2021, South Africa will be on the eve of a major energy crisis. The country, the fourteenth largest emitter of greenhouse gases, depends more than 80% on coal for its electricity production, which is in the hands of a public sector giant, Eskom, whose aging coal-fired power plants are multiplying breakdowns.

The sector must be reformed but the country does not have the means. The discussion that begins then about the need for rich countries to offset their ecological debt with developing countries offers a way out. “President Cyril Ramaphosa understood that this energy transition was an opportunity to reconcile the international agenda and the domestic agenda while reducing poverty, inequality and unemployment”analyzes Audrey Rojkoff, director for Southern Africa at the French Development Agency (AFD).

To convince, South Africa arrives at COP26 with greenhouse gas reduction targets for 2030 reassessed by 31%. “At that moment we tell ourselves: something is happening, it is brave, we have to support it”remembers Audrey Rojkoff. The country details a strategy that consists, in particular, of the development of renewable energies, the production of electric vehicles and green hydrogen. But at the same time the energy crisis breaks out.

In 2023, Eskom will hit rock bottom. Power cuts aimed at avoiding saturation of the network due to not meeting demand are becoming almost daily, up to twelve hours a day. After years of wandering, the company’s situation suddenly stabilized in March 2024. Electricity has returned, but it comes at a price: to avoid going under again, Eskom has announced it will postpone the closure of three power stations until 2030. The coal initially planned before 2027.

Locks

Symbolically, the decision is terrible. This irritates some JETP partners, who were already upset by the slow progress. But Dipak Patel, one of the members of the presidential climate commission responsible for overseeing the transition, assures us: “This does not mean that we will not meet our greenhouse gas reduction goals. » The public electricity company has committed to offsetting emissions from power plants whose closure has been postponed.

Renewable energy development is also getting off to a rocky start. Many wind turbine or solar park projects are on hold, while the country has been slow to adopt reforms that should allow the arrival of private investment. Within the African National Congress (ANC), the party in power since the end of apartheid, the end of state supremacy in this area causes blockades, as does the questioning of the coal industry, which threatens more than 200,000 jobs. direct and indirect work. .

Paradoxically, power outages have driven the installation of photovoltaic panels among companies and individuals who can afford it. According to a report by the International Energy Agency (IEA), renewable energy increased by 33% in 2023 in South Africa. But the formula, which accentuates the energy disparity in the most unequal country in the world, is not satisfactory.

However, in mid-October, the country finally saw a breakthrough with the launch of a public transmission company, architect of the future electricity grid, now independent of Eskom. “Advances in institutional reforms have allowed us to prepare the ground for a global energy transition in the next three to five years”summarizes Dipak Patel, who assures that many projects should finally materialize.

The formation of a “government of national unity” in June provided a boost. After losing its absolute majority in the National Assembly for the first time since the end of apartheid, the ANC governs alongside more liberal parties. The new situation has weakened the most leftist fringe of the party. Close to the unions, the pro-coal minister previously responsible for mines and energy, Gwede Mantashe, was stripped of his energy portfolio in favor of the Electricity Minister, who promised a “aggressive approach” in terms of renewable energies.

Fiasco

“No transition is linear. It is complicated, it is long, sometimes we have to adapt to economic realities, but the trajectory is the right one. JETP has started something »Audrey Rojkoff is happy. Satisfied with this association that allowed us to start a dialogue “equal to equal” Before the South African authorities, the AFD, which has already made available a loan of 300 million euros at an advantageous interest rate, has just announced another of 400 million euros.

By forcing South Africa to detail its energy transition strategy to obtain funding, the JETP allowed the country to develop its thinking on the “social justice” aspect of the project, making it a laboratory in this area. Along with quantified greenhouse gas reduction targets, the need to support the economy in the face of climate change and make the country more resilient to natural disasters has become essential.

The closure of South Africa’s largest coal-fired power station in 2022 has become a textbook case that should not be repeated. The conversion of the plant into a renewable energy production site, announced with great fanfare, turned out to be a fiasco. If Eskom employees were relocated, the project left behind many residents of the neighboring town of Komati, whose economy was almost entirely dependent on the plant.

Aware of the need to correct this error to gain public support for the project, AFD has focused the entirety of its new loan on the “fair” dimension of the energy transition. “If we just tell people, ‘You’re going to lose your job because the Europeans and the Americans have decided that coal is no good,’ that won’t help. We need to develop perspectives”details Audrey Rojkoff.

The institution is the first international donor to focus on this dimension. “The idea is becoming stronger that the socioeconomic needs of each country must be taken into account”Say hello to Dipak Patel. The fact is that the international contribution to the South African transition is very insufficient in relation to the needs. Since 2021, new countries have joined JETP, such as the Netherlands and Denmark, bringing financing to $11.5 billion (about €10.8 billion). A historic amount but still a drop: South Africa estimates that it needs $100 billion to finance a just transition.