Spotlight Activity: South Africa is Moving Slowly Away from Coal
South Africa’s indigenous energy resource base is dominated by coal. Approximately 77% of South Africa’s primary energy needs are supplied by coal. South Africa is highly dependent on coal as an energy source; the fuel provides approximately 73% of primary energy and almost 90% of its energy comes from coal-fired power stations. Coal currently accounts for 91% of electricity production and 25-30% of liquid fuels consumption through the conversion of coal-to-liquids by Sasol. South African coal production has floated between 250-260 Megaton (Mt) per annum over the past 15 years, reaching 261 Mt in 2014. Between 70-75% of production is used domestically and around 25-30% is exported. Mostly, coal is exported to countries in Asia such as China, India, and Japan. In 2018, from January to September, South Africa exported 56 million tonnes of coal, with 27.5 million tonnes going to India.
Coal production in South Africa is concentrated in large mines, with eight mines accounting for 61% of the output. The South African coal sector has undergone a number of mergers and acquisitions and name changes over the last few years. The merging consists of three major coal producers such as BHP Billiton Energy Coal South Africa, Anglo American Coal, and Xstrata. The fourth largest is Exxaro Resources Limited, South Africa’s largest black-controlled diversified mining company, whose entrance into the market was preempted by a merger of the Eyesizwe and Kumba’s coal base and industrial minerals divisions. Sasol, Total and Optimum are also major producers.
The key role played by South Africa’s coal reserves is in the economy, by the fact that Eskom (South Africa’s state-owned electricity utility) ranks first in the world as a steam coal user and seventh as an electricity generator. Sasol is the largest coal-to-chemicals producer. As a result, the public utility Eskom and chemical firm Sasol together account for more than 50% of South Africa’s greenhouse gas emissions and 85% of the coal used in the local market by volume.
In order to meet its commitments to the Paris Climate Agreement signed in 2016, South Africa has to reduce its carbon emissions by just less than half by 2030. This is the context within which the South African government recently signed 27 new Independent Power Producer (IPP) contracts, after three years of delays, and announced the implementation of a carbon tax from January 2019. South Africa is intended to reduce the share of coal-generated power in the country’s electricity mix from 82% in 2016 to 31% in 2050 as outlined in the Integrated Resource Plan (IRP) 2016.
Regardless of being criticized for its heavy dependence on coal-fired power in the past, South Africa has developed Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) driven renewable energy programmes globally. It has hosted the fastest-growing clean energy market over the past five years and is now one of the world’s most attractive renewable energy (RE) investment destinations. Many union officials see the REIPPPP that was launched in 2011, as the vehicle that will deliver the privatisation of South Africa’s energy sector and—subsequent job losses. Unions such as the Congress of South African Trade Unions, the South African Federation of Trade Unions and the National Union of Metalworkers of South Africa support a transition to renewable energy. But they insist that it shouldn’t be done at the expense of ordinary South Africans.
Status: Standing Still
Although, South Africa has signed 27 new IPP contracts as an element to move towards renewable energy resources; more work still needs to be done to phase out coal to renewable energy resources. As more countries transition away from coal to renewable energy, South Africa is moving very slowly and still wants to maintain the use of coal as source of electricity.
Send a message to the National Planning Commission (NPC),
The participatory dialogue process on developing pathways for the just transition to a low-carbon, climate-resilient society is a good step to reach an agreed vision and identified pathway for a just transition. As articulated in South Africa’s National Development Plan (NDP), specifically Chapter Five, the NDP envisages that by 2030, the country will have made headway in transitioning to a society that is just, inclusive, sustainable and resilient. To achieve this, South Africa needs well researched, evidence-based input into policy processes that have long term economic, social, and political implications for development. We believe that this participatory dialogue will produce good strategies towards environmental sustainability and an equitable transition to renewable energy resources.
Send Action Alert Message to:
Department of Planning Monitoring and Evaluation: NPC
Head of Secretariat Mr Tshediso Matona
Private Bag X 944
Tel: +27 12 312 0235
Fax: +27 21 469 6433
For a more comprehensive view of Coal Resources in South Africa, see http://www.energy.gov.za/files/coal_frame.html
For a more comprehensive overview of Coal Transitions in South Africa, see https://www.news.uct.ac.za/downloads/media/COAL_2018_South_Africa.pdf
Overview of largest producers of coal in South Africa, see http://www.universalcoal.com/our-projects/coal-mining-in-south-africa/ and http://www.energy.gov.za/files/coal_frame.html
For some highlights of Political Impacts of Coal Transition in South Africa, see page 8 of the SEI Report https://www.sei.org/wp-content/uploads/2019/02/planning-a-just-transition-in-south-africa.pdf
Glossary of Terms
Renewable Energy Independent Power Producers Procurement Programme (REIPPP): is a programme developed to encourage private investment to help further develop the renewable energy sector within South Africa.
Integrated Resource Plan (IRP): is a National Electricity Plan that directs the expansion of the electricity supply over the given period.