SHAMMY LUVHENGO AND CLARENCE TSHITEREKE: SA’s green energy and the European coal resurgence

It is now a year since Russia invaded Ukraine. Apart from lives lost or displaced and the destruction of property and infrastructure in Ukraine, one of the profound consequences of the war has been rising energy costs as Russia dialled-up restrictions of its gas supplies to Europe in retaliation against sanctions.

Consequently, in some European countries such as Moldova, which relied 100% on Russian gas, energy costs tripled against pre-invasion levels. Among other reasons, rising energy costs forced Moldovan prime minister Natalia Gavrilita to resign earlier this month. In the Czech Republic, by October 2022 consumers were paying more than 10 times what they paid a year earlier for electricity. Such skyrocketing prices spawned frustration and even protests in parts of Europe in the second half of 2022.

While there has been relative success in securing alternative sources of liquefied natural gas from Qatar, the US and Nigeria, among others, there has also been a resurgence of the primacy of coal — “black gold” — in meeting increasing energy demands. The European Commission’s moral considerations of global warming and the reduction of greenhouse emissions have been tossed aside by many countries — it is about fact versus value.

Gas shortages have forced several EU member states to restart coal-fired power stations that were mothballed due to climate change considerations. In response to increasing energy costs the German government gave approval to restart 27 coal-fired stations. Similarly, other EU member countries have announced decisions to restart coal-fired power stations.

It is important to underscore the value of pragmatism in Europe’s decisions to restart coal-fired power stations, which are primarily based on national interest considerations. Coal-fired power stations are becoming a new normal for Europe, with Poland projected to continue generating over 70% of its energy needs from coal until 2049.

While the realities of the coal resurgence are encouraging to coal producers, it is interesting that SA’s position on coal is erratic and not definitive. Further, the current global outlook for coal as a source of energy raises legitimate questions of the sustainability of Eskom’s decision to close some of its coal-fired power stations.

Coal-fired power stations provide reliable energy, have durable lifespans of as much as 50 years, and SA has enough reserves to burn coal for the next 200 years. It is worth considering the current coal-generated energy in at least seven countries, compared with how much is planned or under construction:

• China: 973MW existing, 199MW planned.
• US: 259MW and 0.
• India: 221MW and 94MW.
• Russia: 48MW and 5MW.
• Germany: 47MW and 3MW.
• Japan: 46MW and 15MW.
• SA: 42MW and 14MW.

Of these seven countries, SA produces the lowest amount of energy from coal, while China and the US produce 23 and six times more respectively. This necessarily means associated carbon emissions for China and the US are multiples of ours. Therefore, while arguments for environmental considerations are compelling, the rationality of such arguments must be weighed against SA’s recent experiences of stage 6 load-shedding and its adverse effects.

Recently, the SA Reserve Bank disclosed that rolling blackouts, which are necessary to safeguard the national grid from collapse, are costing the economy about R1bn per day. This cost is neither desirable nor sustainable for the national fiscus — and if the situation persists, it might compromise government’s ability to meet rising demands for social provisions. For now, projections are not encouraging as the Reserve Bank reduced its economic growth forecast for 2023 from 1.1% to 0.3%, down from 2.5% in 2022.

While acknowledging that critical decisions need to be taken against a calculus of competing interests, there is equally a need to recognise the current national energy situational constraints. Sustainable development requires acknowledging reality in the public interest. It is therefore fair that we formulate a cohesive strategy of phasing-out our coal-fired power stations only when equivalent output and capacity from alternative generating sources becomes available. Perhaps there is a need to determine desired threshold of baseload capacity we need from coal and the supplementary contributions from renewable sources.

While we plan to shut down coal-fired power stations, from the table above it is interesting to note that additional planned capacity for China and India far exceed our current capacity. Our relative contribution to global greenhouse emissions from coal-fired power stations pales in comparison to China, India and the US, which makes our reconciliation of climate and energy policies rather complex. Whether our contributions to global greenhouse emissions from coal-fired power stations calls for drastic changes to our energy sources remains moot.

While acknowledging that efforts to resolve our current energy crisis remain the primary preoccupation of government, such efforts should not sacrifice our comparative advantages when it comes to coal reserves. Therefore, our energy transition to a low-carbon economy need not be premised on meeting the demands for climate, energy and environmental justice, but on pragmatic provision of reliable and uninterrupted supply of electricity.

It is fair for a period of such transition to be defined within what is practical, affordable and sustainable. For now, as we pivot from coal, those who advanced and sold us low-carbon alternatives are urging us to do as they say, but not as they do. Coal may be the lesser evil.

• Luvhengo is executive director of black-owned mid-tier coal producer Ndalamo Resources. Dr Tshitereke is researching the potential socioeconomic impact of reducing SA’s reliance on coal-fired power stations.