WHILE THE WORLD TALKS COAL AND CLIMATE IN EGYPT, COMPANIES NEED TO THINK BEYOND THE RHETORIC

By Volker Von Widdern

As South Africa’s energy crisis persists, stirring national frustration and rattling business owners, Eskom has announced its plan to spend a whopping R170 billion at minimum in a bid to restore and maintain our coal-fired power station fleet.

This begs some key questions: is this solve a sensible one or is it merely hampering our onus to make a meaningful shift towards renewable energy? Is a staggering amount of good money being thrown at a bad move? What if the R170 billion is understated because it's all that Eskom can afford? What is driving companies that wish to go green and manage their risk?

Our continuing dependence on coal is an issue to continue interrogating. With more countries pledging to develop and realise their renewable energy plans, are we destined to be left behind on a global playing field?

This debate is also intensifying as world leaders meet in Egypt this week at COP-27 to debate the debilitating effects of climate change and coal dependence will be at the heart of discussions.

Last year was supposed to signal the beginning of the end for so-called dirty fuel use. However, the pandemic upset that apple cart and an industrial rebound drove coal consumption to record levels. There is every indication that intense haggling over this issue will result in little activity in Egypt.

Locally as far as the coal spend is concerned, we must acknowledge money has been allocated and prioritised, to avoid an accelerated decline in economic activity and the dire consequences that follow. In the short term, there is no turning back for South Africa.

By announcing its plans, Eskom will seek collaboration with organisations that have similar interests when it comes to preserving our power stations. At the same time, there is the risk of contract hijacking, while fraudsters are given plenty of warning to network and prepare.

In all the chaos and questioning, there are still doors to open to mitigate the problematic aspects of this shift. For a start, substantial levels of private sector participation and control could soften hard edges and set us up for positive transitions.

Eskom’s maintenance plan makes way for complex outcomes. Even with Kusile and Medupi up and running full steam ahead, and there is no guarantee of that happening any time soon, we are still looking at 80% generation capacity in the new power stations as an optimistic result. At his junction, intense preparation for risk scenarios is needed more than ever.

There are a few short-term risk management strategies that should be considered. . Accelerating the retirement of old power stations leaves more money for the remainder – its better to have 80% availability from half of the fleet than 40% from the full fleet – focus and efficiencies improve materially.

We need an accelerated build of transmission networks for renewable power in combination with IPP’s and supported by offtake agreements from metro’s where new power feeds are connected directly to the cities. Containerised / “pebble bed” nuclear power can be deployed faster than we build coal-fired power stations – these provide flexible deployment options and address our carbon footprint.

I am also encouraged by this year’s launch of the South African Hydrogen Society Roadmap focusing on sector prioritisation, an overarching policy framework and the macro-economic impact of the hydrogen economy. We will see the development of domestic hydrogen supply chains and eventually the production of five hundred kilotons of green hydrogen by 2030. There is a target of 15 GW of power generation based on hydrogen by 2040.

While coal dependence remains with us, collaboration in industrial sectors can make a mini nuclear plant or a new IPP network viable. Companies need to engage in strategic risk analysis of this, look at their own energy needs and how they will plan and manage better sustainable solutions. It is no longer a vision, but a pressing priority.