Moving to renewable energy will boost economic growth, Valli Moosa says
We are an energy-short country, says the deputy chair of the Presidential Climate Change Coordinating Commission
Replacing SA’s ageing and inadequate electricity generation capacity with renewable energy plants is an opportunity to spur economic growth and cut emissions, the effective head of a presidential climate change commission said.
While many countries face the problem of having to idle fossil fuel-fired power stations to meet climate commitments, many of SA’s decades-old, coal-fired plants are due to close anyway, said Valli Moosa, deputy chair of the Presidential Climate Change Coordinating Commission.
“We are an energy-short country. That’s our opportunity and that hole is only going to be filled by renewables,” he said in an interview on May 28. “There is no shortage of appetite on the part of capital to invest in renewable energy in SA.”
Eskom has subjected the country to intermittent outages for more than a decade, partly because of poor maintenance at its fleet of 15 coal-fired stations. Attempts to have private companies build new coal-fired stations in the country have faltered because of the reluctance of banks to finance them.
Shifting to renewables provides SA with a chance to change its economic fortunes, said Moosa, who served as environment minister between 1999 and 2004. The country is the world’s 12th biggest source of the climate-warming gases.
The transition is “what’s going to give us the next big spurt of economic growth,” he said. “The commission is starting to look at how we can move the SA economy where it is to a low-emissions economy, because we have to. If we don’t we are not going to get the money to develop any other kind of economy, or businesses are going to become uncompetitive.”
Moosa was appointed to the 22-member commission in December and effectively runs it, as its chair is President Cyril Ramaphosa.
The main purpose of the body “is to develop a national consensus on how the SA economy moves from where it is currently to a zero emissions economy by 2050”, said Moosa.
The first big issue the climate commission, which has had two meetings so far, will address is SA’s energy challenge, said Moosa. The commission has members from major polluters, Eskom and Sasol, as well as labour unions, nongovernmental organisations and the cabinet.
“It’s going to have to build consensus on how we reduce the carbon footprint of our energy industry and at the same time grow the energy supply and make it more dependable,” he said.
As a first step in reducing the country’s emissions, the commission will meet on June 4 to make a recommendation on whether it supports the environment ministry’s proposed greenhouse gas reduction targets, known as nationally determined contributions, for 2025 and 2030.
The proposal, to be submitted ahead of the UN Climate Change Conference to be held in the UK in November, estimates that to implement its targets the country will need to access $4.5bn per year from multilateral and bilateral sources by 2025, and $8bn a year by 2030.
A draft proposal released in March that improved on previous greenhouse-gas emission targets has been criticised by several environmental organisations for not being ambitious enough. Under the new targets, maximum emissions will not exceed 510-million tonnes of carbon dioxide equivalent units in 2025 and 440-million tonnes of carbon dioxide equivalent units in 2030.
“There is scope for us to do much more to bring in capital, including concessionary type capital for this,” said Moosa, who helped establish two private equity funds and Lereko Investments.
“There is capital that’s looking for these projects in countries like SA, and remember that we are a developing country, we are in Africa, we are disadvantaged etcetera, etcetera.”
Bloomberg News. More stories like this are available on bloomberg.com
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.