South Africa Extends Life of Coal-Fired Power

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--South Africa's state-owned energy company Eskom (Sandton) has announced that it will have to run some key coal-fired plants longer than expected in order to combat grid instability.

"We'll continue some of our coal operations that were earmarked for shutting down," Eskom Chief Executive Officer Dan Marokane told a recent press conference in Cape Town. "We'll review that process on shorter time intervals going to 2030, but we'll place ourselves in a position where we are not made vulnerable by early shutting down of those stations."

The country, which relies on coal-fired power for almost 85% of its power needs, has suffered massive ongoing grid instability since 2007 due to chronic under-investment in plants and infrastructure. As a result, Eskom has been regularly forced to impose periods of load-shedding--planned rolling blackouts based on a rotating schedule, which in turn has negatively impacted the country's economy. The company said that it will be virtually impossible to decommission three of its plants--Camden, Grootvlei and Hendrina--over the next few years as originally intended. Many nations have pledged massive amounts of funding to help South Africa transition away from fossil-fuel and kickstart its shift towards renewables. In 2021, at the United Nations COP26 climate event in Glasgow, countries including Germany, the U.K., France, the U.S. and the European Union (EU) offered more than $9 billion under the Just Energy Transition (JET) Partnership to help with the shift. Eskom's delays have called into question the country's commitment to transitioning and the potential loss of international aid.

"There are some concerns with regards to how our strategy will impact some of the commitments the government has made, and also how it will affect some of the funding earmarked for these initiatives," Marokane admitted. "We have spoken to them [partners], we've engaged with them and explained our rationale and the need for tactical cost adjustment and they've all understood this."

Industrial Info is tracking 18 operational coal-fired plants in South Africa and 46 coal-fired projects worth almost $8.5 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the plant data and here for the projects.

According to recent Eskom estimates, it's going to cost US$21 billion to expand its grid to accommodate the addition of large amounts of renewable energy. It wants to build almost 9,000 miles of new power lines over the next decade--three times more than it has installed in the past decade. At the end of last year, the U.K. government confirmed its commitment to the JET Partnership: "South Africa's introduction of vital energy policy reforms has led to rapid private sector development of electricity generation from renewable sources, which will both enhance energy security and reduce emissions - over 66 gigawatts (GW) of private renewable projects are already in development. Most of these projects will take significant time to be connected to the grid but they will help South Africa address its energy security needs and meet its climate commitments. For context, approximately 70 GW of renewables is required to be connected to the grid by 2030 to achieve the carbon reductions set by South Africa in 2021, known as the Nationally Determined Contribution (NDC). The IPG is providing key technical assistance and grants to Eskom to help with renewable energy planning and green grid management."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).