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With Eskom being the country’s largest emitter of CO2 through the burning of coal for power generation, what is Eskom doing to reduce its carbon footprint, what are the key ingredients for unlocking a just energy transition in South Africa, and what role should Eskom be playing in this transition?
I must stress that Eskom fully recognises the importance of climate change and the fact that it has a negative impact, not only on the world, but in particular on South Africa as well.
South Africa is a signatory to the Paris Agreement and, therefore, as a major emitter of greenhouse gasses, we need to contribute to global efforts to address climate change. But that implies there is going to be a very wrenching adjustment from an economy built on cheap coal and cheap energy to an economy that is far more resilient and far less reliant on carbon.
The structural underpinnings of our economy have not changed yet and we are not very well prepared for the energy transition that is underway globally. That does not mean we can resist the energy transition. I think we need to accelerate very quickly on this long road in order to catch up and take advantage of the latest developments in technology.
If you look at the cost curves for renewable energy, compared to those for fossil-based energy, it is clear the technology developments and affordability of renewable energy have been such that you cannot afford to ignore this. It is beyond any doubt that wind and solar energy will play a key role in our energy portfolio and mix going forward. But that does not mean we will be able to back out of coal overnight.
This is going to be a long passage as we wind down our reliance on coal and, unfortunately, I think we will be a major coal consumer and hence a major emitter of greenhouse gasses and associated pollutants for some time.
We are now on the verge of retiring some of our older coal-fired power stations. This affords us the opportunity to consider repurposing them to natural gas and to use the vacant land around those power stations, where we can rehabilitate open-cast mines for solar or wind power generation.
These properties are now owned by Eskom to use and you may be aware that Eskom recently issued a request for expressions of interest and proposals for the repurposing of decommissioned coal-fired power stations, with a closing date of 10 June 2020.
Some may see old coal-fired power stations that have reached the end of their economic life, and are heavy emitters of carbon and also other pollutants, as a liability. We see these as potential assets and exciting opportunities that can be used to create a just transition.
So, the call for expressions of interest and proposals on our website is an indication of the seriousness with which we take this repurposing. We believe that, if we do this right, we can also enable solutions to the significant decommissioning costs we would have to incur.
By extending the life of these power stations we can enable a just social transition and a just energy transition. At the same time, this will allow some of the private entities and communities that have expressed an interest in investing in these repurposed power stations to participate with us in public-private partnerships (PPPs).
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