HomeIndustry SectorsBusiness and marketsThe writing is on the wall for coal-fired stations in South Africa

The writing is on the wall for coal-fired stations in South Africa

The North Gauteng High Court has declared that the environmental approval for the planned Khanyisa coal-fired power station has expired. This effectively puts a halt to the proposed coal plant and has repercussions for any and all planned coal-fired stations.

In an order dated 27 May 2021 handed down on 3 June, the North Gauteng High Court declared that the environmental approval for the planned 600MW Khanyisa coal-fired power station has expired. Khanyisa would have been built on the outskirts of Emalahleni, already plagued by air pollution.

The court order is effectively the final nail in the coffin for the proposed coal plant – backed by Saudi company ACWA Power – which has met countless legal and other hurdles since its inception.

The ruling came as a result of a legal challenge to the project’s environmental authorisation by environmental justice group groundWork, represented by the Centre for Environmental Rights. groundWork launched the litigation against ACWA Power, to challenge the project, in the Pretoria High Court in 2017.

The non-profit group sought to set aside the environmental approval for the plant on the basis that ACWA Power failed adequately to assess the project’s climate change impacts, and that the Environment Minister (the late Minister Edna Molewa) failed to consider climate change impacts before approving the project.

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Repercussions of the court case

According to groundWork, stopping the Khanyisa coal power station project means that:

  • 75,9 million tonnes of carbon dioxide equivalent climate changing greenhouse gas (GHG) emissions will never be emitted into the atmosphere;
  • significant air pollution that would have harmed the lives and health of residents of the already severely polluted eMalahleni area has been avoided;
  • The pollution from the proposed toxic coal ash dump, the size of 140ha, will never leak into the Olifants Catchment, and negatively impact the important water source and livelihood for 4.2 million who rely on the catchment for their basic needs, fishing, farming, day to day use, spiritual and recreational practices; and
  • the South African public has been spared from unnecessary expenditure of $5.3 billion in comparison to a least cost electricity system (which is renewable and flexible, and has no new coal).[1]

This litigation followed the 2017 landmark Thabametsi court judgment which set a precedent confirming that climate change impacts must be assessed and considered as part of the legally-required environmental impact assessment (EIA) process.

During the course of the litigation, it came to light that Khanyisa had not complied with the conditions of its environmental authorisation, and that its authorisation had lapsed in October 2018. The Department of Forestry, Fisheries and Environment (DFFE) agreed that Khanyisa’s environmental authorisation had lapsed. ACWA, however, persisted with its position that its authorisation was still valid, but did not file answering papers in the litigation to address this. The matter therefore proceeded before the judge on an unopposed basis.

ACWA Power’s Khanyisa coal plant was appointed as one of two preferred bidders under South Africa’s first bid window for the Coal Baseload Independent Power Producer Procurement Programme under a 2012 ministerial determination that called for 2500MW of baseload coal. The other appointed preferred bidder, Thabametsi, withdrew its preferred bidder appointment in late 2020, and had its environmental authorisation set aside by the Pretoria High Court in December 2020.

The Khanyisa private coal power project has faced multiple challenges. On 21 July 2020, the power station’s water use licence (WUL) was set aside by the Water Tribunal for the failure to conduct adequate public participation. The ruling confirmed, for the first time, that climate change is a legal requirement that must be considered when deciding whether or not a WUL application should be granted to a coal-fired power station.

The Water Tribunal acknowledged that the Department of Water and Sanitation (DWS) had failed to properly consider the climate change impacts, and, if it had, it would not have concluded that the Khanyisa project would be an efficient and beneficial use of water in the public interest – as is legally required – even if such projects may be technically feasible.

Without a valid environmental authorisation or a water use licence, ACWA cannot legally commence building the power plant.

Due to pressure from environmental groups, private banks such as Standard Bank, FirstRand, Nedbank and Absa eventually agreed to withdraw from funding Khanyisa, and Thabametsi.

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The future of coal in South Africa

There are already 12 polluting coal-fired power stations in the Highveld, in addition to Sasol’s coal-to-liquids plant in Secunda, and the NatRef refinery in Sasolburg. These 14 facilities contribute to the majority of the air pollution in the Highveld.

Thomas Mnguni, campaigner at groundWork, said: “The high levels of toxic air in the Mpumalanga Highveld are a scourge that impact people’s health on a daily basis. Had Khanyisa been able to proceed, it would have exacerbated the already toxic air pollution in the Highveld, impacted negatively on the people’s health and their lives in the surrounding communities and further exposing school kids in the nearby Landau school to dangerous level of toxic emissions from the plant and ash We simply can’t have more coal plants in the Highveld.”

None of the proposed coal projects that were appointed preferred bidders under the coal baseload IPP programme were able to reach commercial and financial close. An additional proposed coal project – the KiPower coal power station – also challenged through litigation by groundWork, has also had its environmental authorisation lapse.

Although government still persists with its plans for new coal under the IRP 2019, the writing is on the wall insofar as new coal projects are concerned. A recent report by the International Energy Agency titled Net Zero by 2050: a Roadmap for the Global Energy Sector’, adds to the growing voices of the scientific and economic community – there can be no investment in new fossil fuel supply projects, and no investment decisions for new unabated coal plants.

[1]  Modelling undertaken in 2018 by UCT’s Energy Research Centre (now Energy Systems Research Group) showed that, in fact, neither Thabametsi nor Khanyisa was required for SA’s electricity system. On the contrary, these two unnecessary coal plants would cost South Africa nearly R20 billion more than a least-cost electricity system, and would require costly increased mitigation efforts in the power sector in order to meet climate commitments.

This article originally was published by groundWork