SA saved from the R12.57bn environmental disaster that Thabametsi would have been
More private coal plant projects are likely to be abandoned as banks start to constrain their funding
Two weeks ago plans for the 557MW Thabametsi coal-fired power station, to be built outside Lephalale, Limpopo, were shelved for good. More private coal plant projects are likely to follow suit. Thabametsi would have been a climate and environmental disaster that would have cost our country R12.57bn more than a least-cost electricity system.
In 2015, the year SA ratified the Paris climate agreement, as many as 13 private coal power plants were being planned under the 1,000MW coal-baseload independent power producer procurement programme. The following year two coal power plants, Thabametsi and Khanyisa, were announced as preferred bidders under the first bid window of this programme.
Thabametsi was backed by South Korea’s Kepco and Japan’s Marubeni. Marubeni had stepped in as lead developer after French company Engie withdrew its stake, under pressure from environmental justice groups, in 2015. Khanyisa, planned for Mpumalanga, is backed by Saudi company ACWA.
Environmental justice group Earthlife Africa challenged Thabametsi’s environmental approval in court, represented by the Centre for Environmental Rights. In March 2017, in a landmark judgment, the high court in Pretoria set aside the environmental approval for the plant, holding that the environmental affairs minister was obliged to consider climate impacts in her decision but had failed to do so. This was SA’s first climate change court case.
Based on the government’s specifications both Thabametsi and Khanyisa were designed to be greenhouse gas (GHG) emission intensive. Thabametsi’s own climate change impact assessment showed that it would be one of the most GHG emission-intensive plants in the world — 60% higher than Medupi, for instance. That impact assessment also showed that the project’s existence was at risk due to water scarcity, which would be worsened by climate change.
Despite all of this, in early 2018 the environmental affairs minister again upheld Thabametsi’s environmental authorisation, on the basis that the 2010 integrated resource plan (IRP) for electricity generation called for new coal-fired power capacity and had already assessed climate impacts. Environmental justice group groundWork joined Earthlife in launching new court proceedings, arguing that the minister had to exercise her own discretion and consider the project-specific climate impacts of the Thabametsi project instead of treating the country’s electricity plan as determinative of her decision.
Earthlife and groundWork complemented this judicial review by launching legal challenges of all other approvals given for Thabametsi, Khanyisa and a series of other proposed private coal plants.
In that same year, modelling by the University of Cape Town’s Energy Research Centre showed that, in fact, neither Thabametsi nor Khanyisa was required for SA’s electricity system. On the contrary, these two unnecessary coal plants would cost SA almost R20bn more than a least-cost electricity system, and would require costly increased mitigation efforts in the power sector to meet climate commitments.
Though it took many months of pressure from community and NGO activists and shareholders, private banks Standard Bank, FirstRand, Nedbank and Absa eventually agreed to withdraw from funding Thabametsi and Khanyisa. All four banks have since released policies that constrain their future funding of coal power. Nedbank has confirmed it will not fund any new coal plants, regardless of technology.
Towards the end of 2019 the department of environmental affairs advised that Khanyisa’s environmental authorisation had expired — a development disputed by the ACWA consortium. In July 2020 Khanyisa received another blow when the Water Tribunal set aside its water licence on procedural grounds, confirming for the first time that climate impacts are relevant considerations when considering a water licence application.
By October Thabametsi had reached the end of the road. The Development Bank of Southern Africa, the Public Investment Corporation and the Industrial Development Corporation all withdrew their financing for Thabametsi, and investors Kepco and Marubeni announced their withdrawal too. Thabametsi agreed to the setting aside of its environmental authorisation, settling the litigation with Earthlife and groundWork, and notified the government that it was cancelling the project.
The shelving of Thabametsi means that:
- Carbon dioxide GHG emissions equivalent to 136.1m tonnes will never enter the atmosphere. If Khanyisa is also shelved, a further 75.9m tonnes of carbon dioxide equivalent GHG emissions will be spared;
- Precious water estimated at 720,000m³ per annum, for 30 years, have been saved — a crucial win in a water-scarce region of our water-scarce country, forecast to be particularly hard hit as the climate crisis intensifies;
- Air pollution that would have harmed the lives and health of residents of Lephalale and surrounds — already affected by Eskom’s Medupi and Matimba — has been avoided; and
- The SA public has been spared unnecessary expenditure of R12.57bn compared to a least-cost electricity system (which is renewable and flexible and has no new coal). If Khanyisa is also shelved alongside Thabametsi that would save SA a total of R19.68bn.
Globally, plans for new coal plants are rapidly being abandoned, and the UN secretary-general has implored nations to cease building new coal plants from 2020. The consequences of continuing on the fossil fuel development trajectory are dire for our health, economy and continued life on a habitable planet.
Despite all of this, the energy minister’s September IRP determination calls for 1,500MW of electricity to be generated from new coal plants, and the government still appears to be backing a brand new 3,300MW coal plant to accompany the Musina Makhado Special Economic Zone — a proposed metallurgical industrial complex in Limpopo.
Both science and economics now powerfully motivate for all new coal projects to be abandoned and replaced with cheaper renewable energy — owned not only by private interests but by community co-operatives, local government and Eskom and generating clean, cheap people’s power.
• The authors lead the Centre for Environmental Rights, GroundWork (Friends of the Earth SA) and Earthlife Africa respectively. Collectively these three organisations make up the Life After Coal/ Impilo Ngaphandle Kwamalahle campaign.
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