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Rich nations head to South Africa seeking coal exit deal

Developed economies ‘have a responsibility’ to fund the transition to a low carbon economy – SA Department of Environmental Affairs spokesperson.
SA’s use of coal has made it the world’s 12th biggest emitter of greenhouses gases. Image: Waldo Swiegers/Bloomberg

Four of the world’s richest nations will send a delegation to South Africa as soon as next week to seek a deal to begin closing the country’s coal-fired plants, according to people familiar with the matter.

Officials from the US, UK, France and Germany are looking for an agreement with Eskom, which generates almost all of South Africa’s power from a fleet of 15 coal plants.

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Any deal struck could be announced during the United Nations climate talks known as COP26, set to start in Glasgow, Scotland, on October 31, one of the people said.

“The developed economies have a responsibility to fund the just transition to a low carbon economy and climate resilient society,” said Albi Modise, a spokesperson for South Africa’s environment department. He confirmed that John Murton, the UK’s envoy to COP26, will visit the country “to assess opportunities for enhanced cooperation” but added that the dates are still being finalised.

Alok Sharma, the COP26 president, has said he wants to use the summit to “consign coal to history.” But he’s met resistance from a number of middle-income countries that rely on coal. A Group of 20 meeting in July failed to reach an agreement on phasing out coal.

South Africa’s use of coal has made it the world’s 12th biggest emitter of greenhouses gases, ahead of the UK, which has an economy eight times its size. Eskom alone accounts for more than 40% of South Africa’s emissions.

Debt burden

While the utility has laid out plans to start closing down its coal plants and having them at least partially replaced with renewable energy, gas-fired generation and battery storage, its debt burden of R402 billion hinders it from borrowing more money to pay for the energy transition.

With about 20 000 power plant workers, 90 000 coal miners and many thousands more involved in the transport of the fuel, there are also social implications to take into account.

In July, Eskom CEO Andre de Ruyter suggested a facility from development-finance institutions that would be paid over a number of years. In an August presentation to the government, the company said it was in initial talks to raise R33 billion from five such organisations. Mandy Rambharos, the head of Eskom’s Just Energy Transition department, has previously said the phase-out could cost more than $10 billion.

Multilateral development banks including the World Bank are under pressure from the United Nations to speed up the green transition. Earlier this year the Asian Development Bank became the first to announce plans to help pay for the early retirement of coal plants.

Funding options

A range of funding options will be discussed during the South Africa visit, the people said.

One potential option is access to as much as $2 billion that the US, France, the UK and Germany pledged at June’s G-7 meeting to help phase out coal globally.

John E Morton, the US Treasury’s first Climate Counsellor, will also attend, according to one of the people, who asked not be identified. The US Treasury declined to comment. A spokesperson for the French environment ministry confirmed that discussions are talking place.

“One of the major challenges of COP26 will be the decarbonisation of the electricity mix throughout the world, particularly in the major emerging countries,” they said.

The UK and German governments didn’t immediately respond to requests for comment.

© 2021 Bloomberg


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Every government intervention comes at the expense of someone and leads to a decline in economic activity and entrepreneurship. Every coercive act shrinks the tax base, increases unemployment, and robs consumers of their privileges.

The irrational attempt to protect jobs and communities in the coal-mining industry comes at the expense of jobs and communities in the green energy industry. The only difference is that the former has a pulse, is visible, while the latter is stillborn.

The government aborted the development of green energy to buy votes by “saving jobs” for members of the Tripartite Alliance. This comes at the expense of more sustainable and economically beneficial jobs in the green energy sector. It is also to the detriment of communities that could benefit from the local beneficiation projects of green energy projects.

The cost of government intervention is borne by everyone who overpays for electricity, breathes polluted air, forfeits the financial benefits of green energy projects, is unable to get a job at a wind farm, and has to pay more for food because of global warming.

Take the amount that the target group stands to benefit from the government intervention, multiply it by a thousand times, and you will arrive at the cost to the rest of society. It is through this kind of myopic populism that you bankrupt a nation.

Are you suggesting green energy will happen without government interference then you wrong its more expensive than coal.What would happen is nuclear energy the cheapest available ,less invasive and safe today thats what i support

Gert, thank you for sharing your opinion. You are dead wrong though. Wind and sun energy can generate electricity for less than 60c per kWh while Eskom runs at more than R1.20 per kWh and new coal is twice as expensive still. Nuclear is the most expensive by far.

Study the facts and reconsider your position. If the government did not protect the Eskom monopoly at the expense of consumers over the past decade, we would not have load-shedding, and electricity prices would have been lower. The economy is able to grow at 5% per year if the government steps aside.

“..nuclear energy the cheapest available ,less invasive and safe today”
Good luck convincing the woke champagne sipping Guardian reading socialists that idea and most have seeped into western governments

Nuclear is the future though

I wonder if Euro politicians ever watched the green energy myth Michael Moore released or how they expect various metal ore industries to continue being part of a myriad requiring intensive energy supplies 24/7 ..cement production being another

Perhaps “other” countries want to “capture” the African consumption market which is the next big market globally to happen

Dear Gert — I already generate the majority of my electrical energy from solar and only use Eksdom as a backup and on extended rainy days !!

Yes the transformation will happen even without the “enthusiastic” response of SA government and climate denialists !!

Green energy is already happening all by itself. I have been off grid for 5 years. Solar all the way. New projects will all self generate. Eskom will just be there to supply the non-payers, and taxpayers will service its loans.

A small addition. Where renewable energy is planned, Eskom wants to have the control and lions share of the business. Recipe, now well proven, for disaster. Only one real option in my view; privatise, except maybe for the grid, cleanly fairly and to ensure competition. No BEE / tenderpreneur crookedness. Never happen I know.

@ Casper1

Your green credentials might be impressive if you disconnected yourself from Eskom altogether. Otherwise you merely prove in your own little way that renewables alone are not viable: base load power (whether nuclear, gas or coal) always has to be available for those rainy days and dark nights.

Dear P — I am an engineer and after 40 years realise that everything in life has a cost/benefit analysis attached.
You can be fanatical in any enedeavour but then you lose sight of what is economically best for yourself.
I can cut the Eksdom string tomorrow if I so choose and you can continue in your own merry way — no one to stop you and I do not have to convince you or anyone of anything !!

I’m not an engineer and I am off grid. So easy, if you remember high school electrical calculations. V, A and Ah and away you go.

Thanks casper1!

Dear C1
I’m a (retired) electrical engineer. I look forward to reading your forthcoming report on your experience off-grid – when you do decide to take the plunge and pull the plug. Oh, and I’m not trying to convince anyone of anything, just trying to make a relevant contribution.

@DogEatDog – What setup do you have? and what was the cost? Where can I get the materials/components at a good price?

Look at “The Sun Pays” and do the work yourself

You gotta love that green coal fired electric whatever

“The developed economies have a responsibility to fund the just transition to a low carbon economy and climate resilient society”

The absolute entitlement of this statement is mind blowing !!!

Funding comes at a cost, that might be more expensive in the long-term than running coal. Current coal expenses are hugely overstated due to ‘mismanagement’ at Eskom.

As opposed to those who do nothing and leave their kids with the bill?

And the loan is free, leaving the kids unencumbered?

It is obvious in which direction energy production is moving, even if the climate change theories are not precise.

Check out the surge in gas and coal prices. Even if coal fired power stations shut down there will still be demand for coal and gas, be it from a smaller customer base.

Producers in SA should start focusing on alternative uses for their product.

So by South Africa changing over, it will save the planet? Oh please, tell us what your real intentions are? You are trying to snooker China and have one up on them. The point I am trying to make is this – stop pointing fingers when three point back at you.

Did anyone actually say that? Lay off the histrionics.

Are we getting state captured again or are we carbon captured?

We can transition as long as it does not involve new loans – loans are modern slavery.

The big nations built their economies on cheap coal at the planet’s cost and now sit back and import nearly all their goods, while expecting the producers to use renewables.

Stuff that – they need to pay back what they cost the planet.

It is not difficult to calculate a carbon tax owed based on the last 100y of G7 nation economic activity. How to distribute that is the more difficult challenge. Perhaps by paying for most of the wind solar and battery systems

Economics aways finds a viable solution. When there is no oxygen it becomes viable to manufacture it. If the sea level rises is becomes viable to restrain it. When peak oil happens EV’s become viable. If there is no electricity it becomes viable to install solar panels and a battery system that saves you R1500 a month. Then you realize in SA you need to earn R2000 a month before tax to be able to have enough money to buy R1300excl VAT of prepaid electricity the payback period becomes even less, that is called an incentive and, load shedding aside (also an incentive), it makes the green solution even more viable without the need for ESG, politicians and bunny huggers to frog march you there using tax payers money.

Whatever is done to mitigate environmental risk with coal, DO NOT introduce nuclear energy!!


This whole ESG/Green drive is just another money making scheme like the Covid 19 hoax. One proper volcanic outburst releases more Co2 than all the cars on earth together! Yes, we should clean up our act as humans, but don’t sell out our country to the wolves in sheep’s clothing. They corrupt and rape Africa for their own gain! I wish Africa as a continent would grow up, the potential is endless! But as long as it’s leaders line their own pockets, Africa will not stop being the slave of the Western World. Learn from China, capitalism is not such a bad idea as long as it leads to prosperity for all!

End of comments.





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