The drastic reduction of coal power in South Africa (SA) is bound to be costly, and will only add to the country’s economic woes

During a panel discussion at the Coal and Energy Transition Day conference, I raised concerns about SA’s ability to afford a power system overhaul to suit renewables given the country’s sluggish GDP growth rate.  

This year, we only managed to realise a growth of 0.4%, a far cry from the country’s actual economic potential. My stance was that South Africa’s priority should be creating more jobs and closing the widening poverty gap instead of spending vast amounts of money on renewables. According to the Just Energy Plan about R648 billion is needed for the 2023-2027 period to integrate green energy resources, and reduce coal usage.   

I still maintain that renewable energy is the most expensive resource in the world. Amongst available baseload suppliers, hydrogen is rated at as the most expensive at an estimated cost of $239 (USD) MWh, followed by nuclear power at $225 MWh, while coal is about $74 per MWh, gas is about $94 per MWh. 

It does not make sense to me that we are planning to disrupt SA’s third biggest mining industry employer at a time when job scarcity is at its highest.  Coal mining has created over 90 000 employment opportunities and has the potential to generate more. 

The reality is that high investments in renewables could see the country losing out in potential economic benefits from the coal value chain. For instance, solar panels are produced in China and we do not produce wind turbines in South Africa. But when a coal mine is opened, we can employ between 400-800 people.   

I emphasised that the government needs to enhance private sector involvement, cut the red tape, and take decisive action in resolving the Transnet issues. I believe that despite the challenges coal’s resilient nature will see it evolve and maintain its position as a significant contributor to the world’s energy mix. To support environmental compliance Eskom needs to invest in clean coal technology through retrofitting or building power stations with carbon capture functionality to support reliable energy supply.