ESKOM chief executive Andre de Ruyter has come out in full support of renewables, saying that pivoting to green energy will create a competitive advantage for South African exports.
Delivering the keynote address at the Dr Hendrik Johannes van der Bijl Memorial Lecture last night, De Ruyter said the economy had to keep in mind the changes taking place in other countries.
De Ruyter said South Africa had to beneficiate its solar and wind acreage, particularly because Eskom intended to retire 22 gigawatts of coal-fired generation capacity over the next 15 years.
He said the cost of renewable energy technologies continued to decline and would add generation capacity sooner than other technologies, thus reducing the risk of loadshedding.
“It is clear that we have an opportunity to pivot away from Eskom’s carbon-intensive history and lay the groundwork for a cleaner and greener electricity supply industry,” De Ruyter said. “And it is more than an opportunity; it is an economic, social and environmental imperative.”
De Ruyter said the country should rejuvenate an industrial economy to catalyse job creation in light of the collapsed manufacturing sector.
However, South Africa’s economy was 25 percent more carbon intensive than China’s on a per capita basis, and double the global average.
De Ruyter said although it might be tempting to demand that the developed world should decarbonise and allow South Africa to fuel its growth with coal, the reality was starkly different.
He said South Africa emitted roughly half the total carbon emitted by the African continent, and Eskom emitted about 44 percent of the total South African carbon emissions.
“We therefore cannot ignore our carbon footprint,” De Ruyter said.
“In addition, the world is penalising heavy carbon emitters. Global capital is recognising these phenomena.”
In response to these trends, Eskom was pursuing the Just Energy Transition strategy to accelerate the repurposing and repowering of stations.
The power utility needed to spend more than R300 billion to make its ageing power stations compliant with the minimum emissions standards, but this would not add any generation capacity.
De Ruyter said it was becoming virtually impossible to secure funding for new coal generation projects, and insurance companies were targeting large carbon emitters with punitive premiums.
“In light of the inevitable global shift to a green economy, accessing green financing to create stimulus for reindustrialisation is critical,” De Ruyter said.
“Pivoting to green energy will therefore create a competitive advantage for South African exports. Persisting with coal will lead to another era of isolation and punitive trade measures.”
BUSINESS REPORT ONLINE