Think of them as zombies that refuse to die. In 2010, the integrated resource plan (IRP) called for 6 000 megawatts of coal-fired electricity to be supplied by independent power producers (IPPs).
A ministerial determination in 2012 decreed that 2 500 megawatts of coal power would be allocated, with bids in 2016 going to two coal projects — Thabametsi (577 megawatts) and Khanyisa (300 megawatts).
Based on the 2018 draft of the IRP, 1 500 megawatts of coal-fuelled energy supplied by IPPs is expected to form part of the latest incarnation of the IRP, which went to Cabinet this week. The IRP is widely expected to be accepted and gazetted this month. This document will shape electricity policy.
President Cyril Ramaphosa, in a statement issued at the time of last month’s United Nations summit on the climate emergency, said the new IRP “calls for an energy mix that includes a significantly increased component of energy from renewable sources, as well as from traditional sources that include coal, natural gas and nuclear energy”.
Japanese energy giant Marubeni and South Korea’s Kepco are the lead shareholders in Thabametsi, near Lephalale in Limpopo, while Saudi Arabia’s Acwa Power, is a shareholder in Khanyisa, near eMalahleni in Mpumalanga.
But both power stations have been subject to on-going court action by environmental justice groups, which have kept the projects stuck on the drawing board.
In addition, three local private banks — Nedbank, Standard and FirstRand — have been reviewing their funding of fossil industries and have distanced themselves from Thabametsi and Khanyisa.
And the African Development Bank (AfDB) has said it will no longer finance coal projects. “Coal is the past, renewable energy is the future. For us at AfDB, we are getting out of coal,” said the bank’s president, Akinwumi Adesina.
But, zombie-like, the two coal projects have refused to die.
Nicole Loser, of the Centre for Environmental Rights (CER), says 1 000 megawatts of new coal power appear to be earmarked for Thabametsi and Khanyisa
The Life After Coal Campaign, which includes Earthlife Africa, the CER and groundWork, contend that these coal power stations should not be built. They say the country does not need this electricity and that it will be much more expensive than renewable energy.
“A recent report by the Energy Research Centre found that the coal IPPs would add some R20-billion to a least-cost energy system, in circumstances where we do not need them to meet demand and ensure security of electricity supply,” the Life After Coal Campaign says.
“If the department of energy were to publish the least-cost plan that civil society organisations have been demanding, it would not include any new coal. Allowing the two new coal plants contemplated by the draft IRP to go ahead would be disastrous for water resources, air quality, health, land, and the climate.”
Loser says Marubeni, Thabametsi’s co-shareholder, has decided not to build new coal plants.
The Japanese energy giant released a coal policy in September last year pledging to halve its coal-fired power investments by 2030, to increase its renewable energy investment, and to avoid any new coal-fired power projects “as a general principle”, the Institute for Energy Economics and Financial Analysis (IEEFA) reported.
Marubeni announced last week it was pulling out of a proposed 300 megawatt extension to the Morupule B coal-fired power plant in Botswana, according to the IEEFA. It had been in a 50:50 joint venture with South Korean company Posco to build the Morupule B extension consisting of two 150 megawatt units.
Marubeni has meanwhile issued a notice calling on entities with “bid ready” wind and solar photovoltaic project sites in South Africa to approach it with a view to potentially jointly submitting the project as part of any future renewables auction that could be launched by government, Engineering News reported.
“Marubeni has a growing renewables footprint globally, but has not yet participated in South Africa’s [renewable energy programme], under which more than 6 000 megawatts of renewable energy capacity has been procured from over 90 projects.”
But Marubeni told the publication that Thabametsi would not have been affected by the company’s September 18 policy decision not to enter into new coal-fired power generation deals. Marubeni told Engineering News Online that the policy dealt only with “new” coal-fired power generation. “So the policy is not applicable to Thabametsi,” it said.
The IEEFA reported that Botswana, which has had a set of coal misadventures, is getting out of coal, last month disclosing it and Namibia are considering a 20-year five gigawatt solar development plan. “With far more capacity than is needed to meet demand in Botswana and Namibia, the great majority of power generated would be for export around Africa,” the institute reported.
“Faced by a wave of cheap renewable energy projects, coal power proponents will increasingly find a lack of export credit agency and bank support for their proposals,” says IEEFA analyst Simon Nicholas.
“Marubeni’s Botswana coal project has fallen over due to a lack of support from export credit agencies, banks and Botswana itself which is now turning towards renewables,” he says, predicting that Marubeni will struggle to finance its Thabametsi project.
Financiers are increasingly scrutinising coal investments as climate concerns raise insurance and financing risks while falling renewable energy costs mean they are cheaper, cleaner and less risky than fossil fuel power.
But somehow Thabametsi and Khanyisa refuse to die. Loser, for one, is not predicting their imminent death, saying that the Industrial and Commercial Development Bank of China is already earmarked to fund Khanyisa. It, or others like it, may fill the funding gap left by South Africa’s commercial banks.
The zombies could still stalk the blighted coal landscape for some time.