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Answers to the question of coal in the energy transition

What is the role of traditional power generation in the energy transition in Africa, where climate finance mitigation and adaption policies still seem like rules applied to other countries, not a continent where the least cost option will be coal for a while to come?

The article appeared in ESI Africa Issue 1-2021.
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Three very different panellists addressed coal in the energy transition in an online gathering hosted by ESI Africa. Energy analyst Ted Blom called himself technology agnostic and warned against getting caught up in ever-changing fads around issues like climate change. However, he agreed with fellow panellists that contaminants could and should be cleaned up and removed from the environment.

His position is that primarily industrial economies like South Africa’s cannot move from a carbon-intensive economy to a zero-carbon emissions state without significant strides in energy storage technology. Blom does not believe renewable energy alone can ever provide the amount of electricity the country’s technologies need under normal circumstances.

Trade & Industrial Policy Strategies’ senior economist Gaylor MontmassonClair pointed out that the concept of decarbonising the economy is not about a choice to do it or not. “We’re going to decarbonise proactively and reap the benefits, or this is going to be forced on us by the world. The EU will put in a border carbon tax, which means that any product coming inside the EU from 2023 will be taxed based on its carbon content. That’s going to dramatically impact South African exports in the future if we don’t act now.

“And so for me, two choices – be proactive, try to minimise some of the short-term impacts and reap the benefits or, you know, with every head in the sand pretend this is not a problem,” said Montmasson-Clair.

A comment from the audience raised a point that an energy transition wasn’t so much a technical one as a social transformation. This comment resonated strongly with Montmasson-Clair, who answered the question in an interview after the live session: “The technology transition is happening whether we want it or not. We have to deal with it; it’s a disruptor but not something unusual. We’ve been through countless technological transitions, and we will go through more going forward.

“The social transformation is our choice – do we want to have that social transformation? Do we want to challenge the system that has created inequality, poverty and unemployment and use this technological transformation as an avenue to address these? Or not? Depending on where you fall on the political spectrum, you have a different answer, but that is the challenge.”

He believes South Africa needs an ambitious just transition agenda: “You don’t get many opportunities to address all problems at once. We’re not naïve, but it’s an opportunity to do things differently and address some of the historical injustices that happened in the country, the world. You can apply the concept to many geographies.”

He is keen to see the results of a social impact study Eskom is currently engaged in, which looks at the first set of power plants they are decommissioning. The social impact studies, combined with a request for proposals to repurpose power plants, could point to one possible way forward.

Within the energy transition in South Africa, the people who will be hit hardest, though, currently work directly or indirectly for coal mines. Coupled with the hundreds of now-defunct other mines that the government has inadvertently become responsible for, Montmasson-Clair mused out loud whether rehabilitation of mines could become a new sector of employment for those who will lose jobs in the coal mining sector.

But, just as you cannot compare jobs at a coal mine with those at the utility Eskom, it isn’t easy to immediately envisage what job a soon-to-be-ex coal miner could step into without reskilling or training.

“The primary challenge though is not the number of people employed in coal; it’s the concentration. You run the risk of creating ghost towns… it can be an opportunity, though, because you have a geographic centre to deal with and can focus your response,” said Montmasson-Clair, referring to South Africa’s concentration of coal mines in Mpumalanga and the east Gauteng.

An audience member also questioned whether carbon capture is actually worth the effort and Technical Advisor to the Geoscience Council, Dr Tony Surridge, answered the question in a post-event email interview with ESI Africa. He pointed out that CO2 is the main contributor to the anthropogenic forcing of global climate change. He cited the Stern Report (UK), which addressed the impacts of climate change and included, among others, the following economic impacts:

  • Strong, early action considerably outweighs the costs.
  • Unabated climate change could cost the world at least 5% of its GDP each year.
  • The cost of reducing emissions could be limited to around 1% of global GDP.
  • Each tonne of CO2 emitted causes damages worth at least $85.
  • Emissions can be cut at the cost of less than $25 per tonne.
  • A low-carbon path could eventually benefit the economy by $2.5 trillion a year.
  • By 2050, markets for low-carbon technologies could be worth at least $500 billion.

“Once CO2 is captured, it can be stored (in deep geological formations) as a regulatory compliance. In other words, it will cost, same as desmoking, or it can be used as feedstock for commercial products. Presently, the quantity of CO2 stored is much greater than the CO2 used, on a global basis,” said Surridge.

For the South African context, Surridge pointed out that the country’s Integrated Resources Plan (IRP2019) says coal will continue to be used for the next few decades, notwithstanding the accelerated rollout of renewable energies and the increasing energy efficiency measures that are being introduced. “Carbon capture and storage (CCS) is a transitionary measure to assist South Africa in decreasing its CO2 emissions in accordance with international commitments.

“Ameliorating global climate change will minimise negative impacts on the flora and fauna, economy and development in South Africa,” said Surridge.

The Geoscience Council is overseeing a Pilot CO2 Storage Plant project, the purpose of which is to:

  • provide a proof of concept of safe and secure CO2 storage in South African conditions;
  • increase the South African human and technical capacity;
  • raise awareness of the potential importance of CCS; and
  • work with the government to develop a South African CCS legal and regulatory environment.

The preliminary work is nearing completion, and the first injection is expected in late 2021 or early 2022.

“Another pilot plant being planned is a Carbon Capture Pilot Plant. Currently, that is in a technology assessment stage, and it should be followed by a Front End Engineering Design.

“There have been a number of CCS pilot plants worldwide. Some have completed their purpose and have closed. On the other hand, there are several operational plants worldwide that continue to operate. For example, the Sleipner Plant in Norway has been operational since 1997, sequestrating 1Mt CO2 per year. Another example is the Boundary Dam project in Canada, which is attached to a coal-fired electricity generating station.

“South Africa is still bullish regarding CCS, and the technology is supported by the Minister of Mineral Resources and Energy as a just energy transition measure,” explained Surridge.

All the panellists agreed that although the energy transition in South Africa will take decades, it has already started. The shape of the eventual transition will only be apparent in hindsight and is still very much up for discussion. ESI