South Africa’s Dependence on Coal
The energy industry in South Africa is heavily reliant on non-renewable energy, particularly coal. More than 84% of South Africa’s energy in 2021 came from coal-fired power plants, with clean energy sources making up just 13.7%.
The environmental costs of the country’s overreliance on coal are significant: in 2019, South Africa ranked as the world’s 12th-highest emitter of carbon dioxide. Furthermore, as South Africa’s economy struggles to recover from the pandemic, the economic repercussions of an energy sector driven by coal are disastrous for many citizens of the country.
In the long run, South Africa’s transition away from a coal-intensive energy system and the economy will be crucial for achieving sustainable growth and development in a country with a high dependence on coal and energy, as well as an economy marked by extremely high levels of inequality and poverty (more than half of the population lives in poverty).
Employment in coal mining decreases
Employment in the coal industry reached a peak in 1981 and has since fallen as a result of the increased mechanization of mine operations. Over the past 20 years, the sector has become more skill-intensive and employs significantly fewer people than it did previously. In the coal mining industry, there are about half as many skilled and semi-skilled workers as there are unskilled people.
As mining technology advances and automated mining becomes the norm, this might get worse. In the mining industry generally and coal mining specifically, there is already an employment issue that needs to be managed and resourced by the government.
compared to 2015, there will be 28,200 more employees by 2050, down from 78,000. The direct increased use of coal by the industrial sector, which expands over time, limits the influence on overall employment in the coal mining industry. However, as a whole, the NDC scenario represents the least-cost energy option for South Africa, with annual coal production declining by 1.1% between 2017 and 2050.
This shows that South Africa needs to plan since the relative economics of new supply choices are so compelling. Even if climate change policy is only partially implemented, coal is no longer South Africa’s future.
Ongoing Challenges with Energy Grid Failures
According to the South African government, 3.4 million households lacked electricity in the country in 2015. As a result, there is an urgent need to address energy poverty in South Africa. State-owned energy provider Eskom in South Africa recently went on strike, which prolonged power outages and exacerbated already-existing issues with the aging, decrepit coal-fired power plants, and poor management. These blackouts can cause up to eight hours each day without electricity for many South Africans.
Eskom has relied on load-shedding, or rotating blackouts since 2008 to lessen the effect on consumers of the country’s inadequate electricity supply. The economic effects of the more frequent blackouts in 2022 are significant, escalating inequality in a country where, according to the most recent World Bank data, more than half of the population lived in poverty in 2014.
Blackouts have a disproportionately negative impact on impoverished families living in townships and informal settlements, and demand for electricity is only rising as South Africa’s population quickly urbanizes. These recent electricity system failures and their detrimental implications on poverty testify to the necessity to diversify South Africa’s energy sector.
Notably, South Africa has historically made significant progress in increasing access to electricity – from 36% to an astonishing 87% of households were electrified between 1994 and 2012. Renewable energy sources have the ability to continue to fill the nation’s current void, reducing the energy poverty that millions still endure. The South African Department of Energy established a goal in 2014 to eliminate 90% of backlogs by providing electricity to 3 million households on the grid and an extra 300,000 households via non-grid solar energy. Although South Africa has not yet accomplished this objective, the government has started to focus on renewable energy as an important component of its strategy.
What are Energy expect saying about the transition to renewable energy?
Experts in renewable energy have long hoped that solar and wind energy might one day be the least expensive means of producing electricity, enabling a global move away from fossil fuels. According to Faaiqa Hartley, an energy economist at the University of Cape Town in South Africa’s Energy Research Centre, that day has already come, considerably sooner than anticipated. It might open the door for renewable energy sources to surpass their current 26 percent share and eventually make up the majority of the world’s electricity generation.
Hartley on what reaching this threshold means, particularly for developing countries, and about some new issues that are likely to surface as the globe transitions to a renewable future. Hartley co-authored a paper on the topic in the 2019 Annual Review of Resource Economics.
Prices for renewable electricity have been falling for many years
Yes, experts have predicted a drop in pricing. The velocity at which these prices have dropped, however, is what has truly changed the game. Electricity generated by solar and wind has consistently turned out to be less expensive than experts had anticipated.
Currently, the price of installing new coal and nuclear power plants is comparable to that of renewable energy. Existing, older power plants are less expensive because the capital investment has already been made; nevertheless, many of these facilities are nearing retirement age, at least in South Africa.
The terrain has shifted as a result. Power generation now has a low-cost, environmentally friendly option. The issue of whether to decarbonize our power industry and increase electricity costs, which would have a negative impact on our economy, is no longer an issue. We are now discovering that producing greener electricity is advantageous because it is less expensive.
How does that affect the wider economy?
Compared to constructing new coal or nuclear power plants, switching to renewable energy sources needs significantly less investment in your power sector. Lower electricity costs result from this, which affects every aspect of the economy. Lower electricity costs result in lower manufacturing costs and higher profits. Households benefit from it as well because they may spend more on other things by using less power. From that vantage point, developing renewable energy actually boosts the economy. If we switch to renewable energy, you may potentially see more than a million new jobs in South Africa by 2050.
Will the Poorer will benefit from renewable energy
Not everyone has access to electricity in many developing nations because the infrastructure needed to connect them to the system is lacking. With the development of energy production closer to demand centers and, in the case of solar, even on people’s roofs, renewable technologies can allow nations to abandon the need for massive power infrastructures. Given that these homes do not already have electricity, this is quite effective. Around 20% of people living in rural regions lack access to electricity, even in South Africa, which is regarded as one of the continent’s leaders in infrastructure development.
Does the lower cost of renewables mean there is no longer a good reason to build fossil-fuel electric generating plants?
Where you are in the world will determine this. Resources are available to many nations in various forms. Building renewable energy makes sense for us in South Africa. We have a fairly developed grid, so all that is necessary to generate solar or wind electricity is to link those sources to the grid. There is enough land in South Africa to erect these power plants. And perhaps more importantly, because South Africa has such excellent solar and wind resources, we can essentially build it anywhere in the nation without greatly reducing its efficiency. However, some nations, like Bangladesh, don’t have as much land that is appropriate for constructing renewable energy sources on a huge scale.
How long will the transition take?
In fact, South Africa is in a great position to transition to renewable energy. From 2030 to 2040, several of our coal power facilities will be shut down, therefore we need to start adding capacity. The issue is whether to increase coal, nuclear, or renewable energy capacity. By 2050, South Africa may rely on renewable energy for 70 to 80 percent of its energy needs.
Will that happen automatically, or will policy changes be required?
We need to change the current policies in South Africa so that we can transition to renewable energy at the required rate. It is the nation’s least expensive option, according to numerous surveys. However, the current strategy continues to call for new coal plants to be built until 2050.
The government cites the absence of a transition strategy for the coal mining industry as their justification. There are lobbying organizations that profit from the extraction of coal. There are unions whose members work in the coal sector. The federal government must strike a balance. With the use of renewable energy, more jobs are being created throughout the economy, but coal miners are losing their jobs. As a result, you need to have a plan in place that either assist in retraining these workers or, if they are getting close to retirement age, looks at alternative financial arrangements. You need to put rules in place that consider how to perhaps add more manufacturing, wind, or solar farms in coal-mining districts. Therefore, those are the items that must be planned.
Will clean electricity bring other environmental benefits?
We do need to discover measures to reduce carbon emissions even further, but they don’t always have to come from the power industry. For instance, because electric vehicles employ a clean energy source, the transportation sector can now transition away from fossil fuels. That will cut back on emissions. When the transportation sector stops utilizing fossil fuels, there is no longer a need to create large amounts of gasoline and diesel, which lowers emissions in the industry that produces fossil fuels. But for everything to work out, the government must back it.