South Africa, the global coal junkie, tries to stop
JRAVEL EAST from Johannesburg, the economic capital of South Africa, and dusty industrial towns line the road to the town of Emalahleni (“place of coal” in the local language, Tswana). The flat veldt is dotted with mines and chimneys of coal-fired power plants.
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It is the coal belt of South Africa. Here, miners extract about three-quarters of the coal that powers one of the most coal-fueled economies in the world. Soot provides 27% of the world’s energy, but no less than 77% of that of South Africa (see graph 1). This includes almost all of its electricity and only 28% of its gasoline and diesel, which it synthesizes from coal in a process developed during an oil embargo in the 1980s aimed at end to apartheid.
The fuel that once helped preserve apartheid continues to cause problems for the party that eventually supplanted it, the African National Congress (ANC). Diversifying away from coal would help end South Africa’s decade-long energy crisis and, with it, a period of economic stagnation, marked by flat or falling incomes. The brewing political battle over whether to do so could also determine the fate of Cyril Ramaphosa, the timidly reformist president of South Africa, who hopes to win the ANC‘s nomination to run for a second term in 2024 at a party conference later this year.
The arguments for moving away from coal are simple. South Africa is windy and sunny. It can generate renewable energy by building new wind turbines and solar farms much cheaper than mining coal and shoveling it into already built power plants. (Plus, many of these coal-fired plants are old and will soon have to close.) Since wind and solar farms can be built quickly, they’re well suited to help end a desperate power shortage. The national utility, Eskom, has rationed electricity by scheduling regular blackouts every year since 2018, making it harder to run almost any type of business.
The winds blowing in international capital markets are also pushing in this direction. Although Eskom is broke and unable to repay its debts without government assistance, private investors are keen to invest in renewable projects. Western governments too. At COPAt the 26th climate conference in Glasgow last year, a group of wealthy nations including America, Britain, France and Germany pledged $8.5 billion in grants, loans market and investments to help fund South Africa’s coal phase-out. South Africa, for its part, has released ambitious new climate commitments to start reducing greenhouse gas emissions from 2025, a decade earlier than expected.
the COP agreement places particular emphasis on supporting workers and regions that will be affected by the coal phase-out. This is not nothing: the industry employs around 200,000 people, directly and indirectly, and supports the regional economy around Emalahleni. Such concern is typical of the conciliatory approach to politics of Mr. Ramaphosa, once the boss of a hardline mining union who nowadays prefers compromise to conflict and consensus to quick change.
Take the latest version of South Africa’s Integrated Resource Plan, which charts the future of energy infrastructure. The document, approved in 2019, proposed the dismantling of 35,000 of the 40,000 megawatts (MW) of coal-fired power generation capacity currently in service by 2050. Most new capacity will come from wind and solar. But little has happened since, largely due to resistance from mining unions, populists and politicians who have made their money selling overpriced coal to Eskom.
Among the most prominent coal advocates is Gwede Mantashe, minister of mines and energy and a former miner. In the 1980s, when Mr Ramaphosa led the National Union of Mineworkers, Mr Mantashe co-founded and led the union’s branch in Witbank, as Emalahleni was then known. He then rose to the top of the union.
Although once a close ally of Mr. Ramaphosa, Mr. Mantashe has tried to thwart the president’s plans to ease the electricity shortage by attracting private investment in renewable energy generation. Previously, regulations made it virtually impossible for large companies such as mines to generate their own electricity, as private generation capacity of more than one megawatt required unobtainable licenses. Mr Mantashe has stubbornly resisted efforts to raise the cap to 50MW, despite calls from companies lacking power. In an act of unusual audacity, Mr Ramaphosa canceled it last year and raised the cap to 100MW.
The episode did little to chastise Mr Mantashe, who continues to push for new coal-fired power stations, even as he drags his feet on approving deals with private investors to build wind farms and solar. It also appears determined to award an expensive 20-year contract for “emergency” electricity to Karpowership, a Turkish operator of floating power stations. That deal has been blocked by environmental regulators and also faces a legal challenge from a losing bidder, who alleged in court documents that he was asked to pay bribes to his offer to be considered. Mr Mantashe said the tender was “proper, honest and transparent”. Karpowership has also denied any wrongdoing. Yet until the case is resolved, the banks whose loans are needed will stay out of the deal.
Time is running out for Mr Ramaphosa, whose rivals within the ANC are already lining up to challenge him for the leadership of the party at its next five-year conference in December. Although national elections are more than two years away, the party has a habit of defenestrating sitting presidents. He expelled two of Mr. Ramaphosa’s predecessors, Thabo Mbeki and Jacob Zuma, before the end of their presidential terms.
Mr Mantashe may well stand with Mr Ramaphosa against the pro-corruption wing of the ANC– as he did in 2017 – although some experts believe he could also consider stabbing the president to make his own run for power. In either case, he will want the support of the country’s two main industrial unions, representing miners and metalworkers, which have some 650,000 members. Both unions support coal, a major export (see chart 2), and have opposed renewable energy, which has become a touchstone for the political left: Floyd Shivambu, a leader of the populist Economic Freedom Fighters party, thinks renewable energy is a Western-orchestrated takeover”.
While the ANC focuses on its internal power struggles, many South Africans will see the 2024 national elections as an opportunity to air their views on energy policy. The start of Mr. Ramaphosa’s campaign for the party’s presidential nomination provides an apt metaphor. While addressing a fundraising gala in Polokwane, a northern town, the electricity went out, leaving him, and the congregation ANC tall, groping in the dark. ■
This article appeared in the Middle East and Africa section of the print edition under the headline “Soot, loot, reboot”