Government clarifies its stance on coal in South Africa

 ·4 Nov 2022

Finance Minister Enoch Godongwana has denied reports that the National Treasury’s plan to take over a portion of Eskom’s debt will be linked to conditions that the power utility builds new coal, gas and nuclear plants.

In a statement, Finance Ministry spokesperson Mfuneko Toyana said this was “untrue” and a misunderstanding of the argument the Minister was making.

“Minister Godongwana’s point was that South Africa’s energy transition will not be an immediate and wholesale abandonment of the country’s existing electricity sources, but a phasing-out of fossil fuels that may also involve transitional measures to maintain current coal and nuclear plants, and also the use of transitional sources like gas,” he said.

Toyana said the government’s key planning instrument, the Integrated Resources Plan (IRP), envisions a combination of energy sources, including solar, wind, coal, gas and nuclear, to maintain the security of electricity supply at the most affordable cost to South Africans.

“Further, his point was that the fundamental purpose of the National Treasury’s plan to take over a portion of Eskom’s debt is to allow the utility to focus on and invest in increasing its generation capacity,” he said.

He said Godongwana was fully committed to the government’s Just Energy Transition framework and the balance it envisions of accelerating investment in new generation capacity while protecting the communities that will be worst affected by the move away from coal and other fossil fuels.

Minister Godongwana was clear about these principles in his Medium-Term Budget Policy Statement (MTBPS) last Wednesday, he said.

The MTBPS said the debt takeover, once finalised, together with other reforms, would ensure that Eskom was financially sustainable.

“The programme will allow Eskom to focus on plant performance and capital investment and ensure that it no longer relies on government bailouts,” said the Minister.

Toyana said the debt-relief relief programme was one of a suite of government interventions with the simple, but the critical goal of securing South Africa’s short and long-term energy supply needs

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