Eskom plans to build their own renewable energy plants next to coal power plants

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  • Newly appointed Eskom CEO, Dan Marokane, has announced that Eskom plans to build their own renewable energy plants next to coal power plants.
  • He also said that Eskom’s decision to postpone the decommissioning of three of its older coal-fired power stations will cost the utility between R85 to R95 billion rand. 

Speaking to the South African National Energy Association, Eskom’s new appointed CEO, Dan Marokane, said that the board has decided to build their own renewable energy projects on land next to their power stations instead of leasing the land to IPP’s to develop projects. The idea is to have these plants fully commissioned before a decision is made to close coal fired power stations, ensuring a just transition for workers. The move is likely to leave independent power producers who participated in the land lease programme stranded. Read more

Eskom has kicked off this strategy by releasing an EPC tender in April for the construction of a 75MW solar farm at the Lethabo Power Station. Read more

“We have had to do some rethinking in terms of the strategy that we may have articulated before and that is to decouple the implementation of renewables programme from the shutting down of power stations,” said Marokane.

Appointed to turn Eskom around, Mr Dan Marokane becomes the 12th CEO appointed at Eskom in the last 14 years. He took office in March. Image credit: Eskom

 

In a separate address to the Presidential Climate Commission (PCC), Marokane, said that Eskom’s decision to postpone the decommissioning of three of its older coal-fired power stations will cost the utility between R85 to R95 billion rand. Eskom announced in May that the board approved plans to delay the decommissioning of Camden, Hendrina and Grootvlei power stations to 2030. Read more

Morokane also explained that the Eskom executive team is engaging with the PCC and the Just Energy Transition (JET) project management unit in the presidency to understand the storyline from the perspective of us delaying the decommissioning of some of the coal stations.

“There’s a context that needs to be taken into consideration as we begin to navigate these issues with how we transition and for us, the issue of the national circumstances is an important one. And I think I don’t have to remind the members here of the impacts of the intense load shedding that was experienced last year, and the implications on the economy as a whole. So for us as Eskom, looking at that programme of decommissioning power stations, we had to take into consideration the reality and the threat that still remains with regards to load shedding and the need to balance supply and demand.”

He also explained that the DMRE has failed to procure new generation capacity in time.

New timeline for JET

Against this background, South Africa is expected to provide a new timeline for the shutdown of coal-fired power plants in a bid to secure about US$2.5 billion in climate finance.

The timetable to be proposed to the Climate Investment Funds in June aims to ensure the country remains on track to obtain funding under the so-called Just Energy Transition Partnership — a $9.3-billion pact with some of the world’s richest nations. South Africa generates around 80% of its electricity from coal-fired power stations.

At COP 26 in November 2021, the governments of South Africa, France, Germany, the United Kingdom and the United States of America, along with the European Union, issued a Political Declaration announcing a new ambitious, long-term Just Energy Transition Partnership (JETP) with a combined pledge of US$ 8,5 billion in funding. The International Partners Group (IPG) as it is called, aims to accelerate the decarbonisation of South Africa’s economy to help it achieve the ambitious goals set out in South Africa’s updated Nationally Determined Contribution emissions goals.

Late last year, the South Africa’s Cabinet approved the Just Energy Transition Implementation Plan,  but there has been a push back from factions within the ruling party. The Secretary General of the ruling ANC party in South Africa, Fikile Mbalula, has slammed the investment partnership offer saying that the pact is responsible for the country’s blackouts. South Africa’s energy minister, Gwede Mantashe, snubbed US1 billion green energy MOU announcement with Denmark and The Netherlands. Read more

Early last year, South Africa told its partners in the pact it planned to delay the planned shutdown of its 14 coal-fired plants to address record electricity outages. The authorities didn’t set new closure dates.

“What we are presenting to the CIF is an adjustment to the decommissioning plan linked to an emissions target that we have to achieve,” comments Neil Cole, a finance manager at the Project Management Unit, which is overseeing the JETP for South Africa, within the presidency.

Author: Bryan Groenendaal

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