South Africa’s state-owned power utility Eskom Holdings and two of its biggest coal suppliers have agreed to work toward shifting to renewable energy projects at mines that produce the fuel.
Exxaro Resources and Seriti Resources “aim to achieve both carbon reduction and cost savings” with the support of Eskom, said the companies, which together supply about 80% of the coal used annually by the utility. The first phase of the project will involve building solar facilities, with subsequent installations that could include energy storage and wind.
Eskom is South Africa’s biggest producer of greenhouse gases. The loss-making utility is struggling to transform the business while moving from its dependence on coal to low-carbon energy sources such as renewables.
A significant challenge for Africa’s most industrialised nation with the highest unemployment rate among 82 countries tracked by Bloomberg will be to prevent the loss of jobs through such a transition. South Africa’s coal industry employs about 90 000 workers and reducing use of the fuel will also affect the broader communities around the mines.
“The parties aim to create employment and re-skilling opportunities for communities living and working at and around their operations,” the companies said Monday in the statement.
The plans could result in a potential reduction in CO2 emissions of up to 350 000 tons a year for Seriti, more than half of its current emissions, and 130 000 tons a year for Exxaro at its Matla coal mine.
The initial solar projects will start as soon as possible, subject to regulatory approvals, the companies said.
© 2021 Bloomberg