The politics of weaning Africa off coal

Mbongeni Mguni | Monday March 7, 2022 06:00

“Someone came to me and said renewable energy will create 330,000 jobs in South Africa and I said give me the formula looking at the 90,000 jobs we have in coal.

“I have not found that formula.

“I grew up in the Eastern Cape and I recently took a drive to a wind farm and found that it had five people working there permanently.

“This is an argument against distorting information to convince everyone else.”

South African Mineral Resources and Energy minister, Gwede Mantashe is unapologetic about Africa wanting to dictate the pace of its energy transition. Speaking this week at the African Energy Indaba in Cape Town to a roomful of delegates, Mantashe maintained a stance that has seen him labelled a “defender of coal”.

“Africa must define its own energy transition that will empower its own economies and growth,” Mantashe said.

'As a small economy, we feel sometimes feel unsettled that we don’t have time to develop our own strategies and are becoming conduits for developed countries and their own strategies.'

While African countries, including Botswana, have generally committed to a green energy transition, the debate over the nature of this change and the pace at which it should happen is still boiling.

At the UN climate summit in Glasgow last November, Botswana and 40 other countries signed a pledge to ease the use of coal. Critically, however, the local delegation declined to sign a key clause in the deal, which would have required Botswana to commit itself to not issuing any new coal licences.

Several countries placed their own Ts and Cs on the deal, while others, including major players such as the United Kingdom, which was hosting the summit, declined to fix a date to phase out fossil fuels.

Global scientists and politicians agree that coal is one of the major contributors to adverse climate change, through the emission of high amounts of carbon dioxide when being burnt for electricity. Scientists have long warned that the world is reaching the point of no return in climate change, the point where the crisis at a global level will escalate and throw millions into hunger, poverty and economic distress, regardless of what major interventions are taken.

On Monday a 3,500-page UN climate report again repeated dire forecasts for countries such as Botswana, including severely reduced rainfall, more heatwaves and disease should the current rate of climate change continue unabated.

Botswana, which currently has a capacity of just six megawatts of energy from renewable sources, plans to increase this to more than a third of the country’s demand by 2036, through the Integrated Resource Plan (IRP). At least 82% of the more than 800MW of electricity the government intends to install in the next 20 years will come from clean energy sources such as solar and wind.

While Botswana will largely carry the cost of procuring this generation from Independent Power Producers (IPP), South Africa, the continent biggest carbon emissions polluter, has its road to transition paved by an US$8.5 billion (P99 billion) offer of loans and grants from the world’s richest countries.

The deal, unveiled at the Glasgow climate conference, requires South Africa to close its existing coal mines and replace them with clean energy generation. Bloomberg this week reported that a senior US official stressed that funds have to go towards replacing the coal mines and not, as suggested by SA, producing electric vehicles and green hydrogen.

These types of conditions frustrate African policymakers and heighten concerns that the green transition in Africa could entrench debt dependency and technology inequality with more developed countries. The situation is further aggravated by the fact that while being most vulnerable to climate change, Africa as a whole contributes less than four percent of global carbon emissions and yet has the least coverage of electricity in the world, a key ingredient for development.

“We are expected to move quickly towards low carbon emissions despite the fact that the actual accused in this case are the developed nations,” Mantashe said.

“Africa is at the bottom of the pollution barometer.

“We must not be ambivalent about a just energy transition.

“Many of us talk about moving from coal to renewables but it cannot be a pendulum shift.

“It has to be a balanced approach with a mix of technology and at its heart must be the people and livelihoods.”

A Catch 22 of sort has developed, some analysts say. Low electricity coverage is associated with weak industrialisation and the attendant stagnant employment creation across the continent, which in turn means existing jobs, such as those in coal mines and coal-fired power stations, are fiercely protected from sudden erosion by politicians.

South Africa, with a historically disadvantaged black population, which also makes up the majority of semi-skilled workers in the coal sector, is particularly sensitive about the wholesale adoption of new, imported technologies that could erase those jobs and worsen a long running jobs crisis. On the other hand, green technology lobbyists say renewable energy holds a key solution to these challenges. “The energy transition is not just about carbon emissions, it is also about energy affordability,” Simon Nicholas, Energy Finance Analyst at the Institute for Energy Economics and Financial Analysis, tells Mmegi.

“Many areas of Africa lack access to electricity grids but there is no point extending grids to people if the resulting power is too expensive because it is generated using expensive fossil fuels.

“People in Botswana and South Africa know all about significant power tariff increases.

“It is no coincidence that both countries are dependent on coal for power generation.”

In Nicholas’ base of Australia, the addition of wind and solar power to the grid has reduced the cost of power generation. Lower cost of power generation means lower power tariffs for consumers and businesses which helps support developing economies and employment.

“African nations would be far better off without fossil fuel projects,” says Nicholas.

“Such projects have been developed in Africa for decades but have not led to universal access to electricity.

“They tend to be export projects - western companies coming to Africa to extract resources for export to other countries. The host nation doesn’t do well from these developments.

“African nations that have been dependent on the extraction and export of fossil fuels have generally developed more slowly than those that are not.”

Funding is a particularly sore point in the debate over the green energy transition. Louis van Pletsen, director at energy investment firm, InAfrica Holdings, argues that the $8.5 billion pledged by wealthy nations to South Africa could have been more optimally used, if the conditions were relaxed.

“If you had that $8.5 billion, would you use it to shut down your coal mines or do something else?

“You could provide 500 million homes with basic solar systems, which means they stop chopping down trees and can have decent education, small fridge and others.

“South Africa has 50,000MW of installed coal fired capacity and these power station have between 15 and 25 years left.

“Is that the best use of money to close these down and write off 15 to 25 years of economic life?

“The reality is that nowhere in the world can we get by with a single source of energy generation.”

Funding for other African countries is hit and miss. While rich nations have said they will make funding available to help countries such as Botswana transition to clean energy, little of this funding has been forthcoming over the years. In 2009, rich countries promised to make US$100 billion available every year in climate funding until 2020, but they have consistently missed this target, amidst criticism that even the funding that was said to have been made available was over-exaggerated or included loans charged at market value, rather than concessional.

The European Union, which is on a drive to renew relations with Africa, has proposed a Green Deal to cut carbon emissions by reducing its imports of goods manufactured through fossil fuels, a broad plan that could shake Africa’s trade with the world’s single largest market. The Green Deal proposes annual investments of 260 billion euros (P3.3 trillion) to help the European Union’s transition, of which Africa would also benefit.

African states are concerned about the Carbon Border Adjustment Mechanism (CBAM) under the Green Deal, which is essentially a measure to ensure that goods imported into the EU pay a price for their carbon emissions that is comparable to the price paid by EU domestic producers under the tighter carbon targets.

The arrangement may have implications for Botswana’s rough diamonds, with the country’s mines currently some of the largest consumers of coal-fired electricity. Brussels in Belgium is a major importer of the country’s rough diamonds.

“The key question relates to the CBAM where Africans are pushing for language related to 'unilateral actions by partners' on climate change or in the area of investments,” Faten Aggad, Senior Advisor on Climate Diplomacy and Geopolitics at the African Climate Foundation, explains to Mmegi.

“Diamonds would be affected where they have an industrial application in new technologies.

“But, so far, the EU does not see diamonds as a critical mineral and therefore it is not directly affected.

“However, the effect may come from additional taxes that may be imposed on them due to how energy intensive diamond mining can be.

“But for now, there are no clear limitations yet.”

In the energy transition debate, analysts do however agree that with the demands the world is making on Africa, there appears to be a hypocrisy in the developed world, where some countries have not committed to phasing out coal and others are actually setting up new mines.

“Western nations need to end their hypocrisy and stop fossil fuel development at home if there is to be any real sense of a just transition in Africa,” says Nicholas.

“If rich nations and development banks are going to restrict finance for fossil fuel projects in Africa, there ought to be more finance for renewable energy and this needs to be ensured.”

The pressure to transition is also not fairly applied across continents by the world’s wealthiest countries.

“Look at China,” says Pletsen.

“In 2021, they added more solar than the rest of the world combined but they also added 150,000 MW of coal fired power, which is three times the total generation of South Africa.

“There has to be a transition over time and it has already started.

“In fact, the improvements in renewable energy technology and tariffs are due to those early investments that we made.”

An Afro-centric just and gradual transition appears to be the solution, with a measured adoption and mixing of technologies to ease off coal use. While developed countries have a UN commitment to end coal use by 2030, developing countries such as Botswana have up to 2050, but with the debate on the pace and structure still roaring, changes may take longer than expected.