South Africa Says Emissions Will Fall Even as It Delays Closing Coal Plants

South Africa Says Emissions Will Fall Even as It Delays Closing Coal Plants

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(Bloomberg) — South Africa’s presidency, which is overseeing the deployment of $9.3 billion in climate finance, said it’s confident the country will meet its greenhouse gas emission reduction targets even as its keeps coal-fired plants open. 

South Africa won the funding from some of the world’s richest nations in a deal announced in 2021 on condition the world’s 15th-biggest emitter of climate warming gases began to close down its coal-fired plants. The country that’s beset with an energy supply crisis is yet to close down a plant under the agreement or commit to any firm decommissioning dates. 

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“It’s not about stopping decommissioning,” Rudi Dicks, head of the project management office in the presidency, said during a press conference on Tuesday. “It’s about delaying decommissioning until we have sufficient generating capacity and reserve margins.”

The climate pact, known as the Just Energy Transition Partnership, is seen as a prototype for similar agreements being negotiated with Indonesia, Vietnam and Senegal. South Africa derives more than 80% of its power from a fleet of 14 coal-fired power plants operated by state utility, Eskom Holdings SOC Ltd.

Those plants are becoming increasingly unreliable due to their age and a lack of maintenance and now South Africans are often subjected to more than 10 hours of power cuts a day. That’s crippling the economy and deterring investment. 

Even so, a Treasury official from the US said that while the delays to planned decommissioning dates are understandable, they threaten South Africa’s ability to achieve the emission reduction goals it set in its Nationally Determined Contribution, a submission to the United Nations. The US along with the UK, Germany, France, European Union, the Netherlands and Denmark are part of the JETP pact.

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The NDC target is to reduce South Africa’s emissions of carbon dioxide or its equivalent to between 350 million and 420 million tons by 2030. Joanne Yawitch, head of the project management unit for the JETP in the Presidency, said current modeling shows that South Africa could achieve these goals. 

“We are trying to get as far down as possible,” she said of the range. 

The unit is working on plans that will provide alternative employment and potentially renewable energy when Eskom’s Camden and Hendrina power plants are closed down, she said. Submissions to funders of those programs will be made by October although a firm date for closure has not been set. 

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An earlier closure of the Komati power plant using money from the World Bank and Canadian government rather than JETP funds has been widely criticized because of the impact on the local community. 

The project management unit is also working on a solution to allow Eskom, which has to ask for permission to take on additional debt as a condition of a government bailout, to raise concessional finance from the JETP partners, she said. The US Treasury official said $2.5 billion in concessional loans are available for Eskom to invest in transmission. 

“We are looking at what their plans might require,” Yawitch said. An expanded grid would allow South Africa to purchase more solar and wind power from private plants. 

The Project Management Unit is also seeking to appoint, in the next month or two, institutions to look after the various priorities of the JETP ranging from green hydrogen to skills development. The government’s Industrial Development Corp. may take charge of the green hydrogen program, Yawitch said. 

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Funding may also be deployed to take truck traffic off South Africa’s roads by enhancing the rail network, she said. 

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