President Cyril Ramaphosa has taken a major step in moving South Africa away from its dependency on coal energy, which will unlock approximately $8.5 billion (R140 billion) worth of investment opportunities for the country.
The president has green-lit the Just Transition Framework, which, under the Presidential Climate Commission, will set out policy measures and undertakings by different social partners to minimise the social and economic impacts of the long-term move away from coal.
Announced last month by the president of COP26, Alok Sharma, the framework underpins an agreement between South Africa, the UK, US, Germany, France and European Union to unlock $8.5 billion in investment for South Africa. The investment is aimed specifically to assist South Africa in transitioning away from coal.
“There will be a need for significant capital mobilisation from both public and private sources. Now that we have this framework we will be able to proceed apace with harnessing the benefits of the Just Energy Transition Partnership we concluded with the governments of the US, United Kingdom, Germany, France and the EU last year,” said Ramaphosa.
According to a study conducted by COP26, South Africa – the world’s 13th biggest source of greenhouse gases – will need to spend over $250 billion over the next 30 years to fund the closing of coal-fired plants and develop green alternatives.
Ramaphosa said the framework advocates for a massive expansion of renewable energy, battery storage, new energy vehicles, green minerals and the hydrogen economy.
“The consensus achieved around its production means we will be able to take the transition forward in sync with all these stakeholders. This is especially insofar as it impacts sectors such as mining, automotive, tourism and agriculture,” said Ramaphosa.
The Presidential Climate Commission added that the new framework falls precisely within the national development plan’s goals and annual government budgeting processes.
“While the framework is not an implementation plan, it presents an organising frame for us to coordinate our efforts around the just transition.
“It is a foundation for more work to follow, underpinned by significant mobilisation towards social inclusion and help reach our climate goals, with a high degree of trust between all parties and a requisite policy intervention led by government, driven by industry and entrenched in our communities,” said the commission.
The plan is for South Africa to produce a draft investment plan in July and to have a final version signed off with the partner countries by early November
The national power utility Eskom, which relies predominately on coal as a fuel source, has been under strain over the year.
Eskom recently announced that it would implement stage 5 load shedding on Wednesday and Thursday (6 and 7 July) and that rolling blackouts will continue through to the weekend.
The ruling party ANC has urged the government and Eskom to consider increasing maintenance and improving the availability of the existing power supply, ensure the utility acquires the appropriate skills, and facilitate private investment in new generation capacity.
The party also called for defunct coal-fired plants to be re-purposed to enable them to generate power from alternate sources.