South Africa's need for sustainable energy solutions to address a deepening energy crisis and climate change is becoming increasingly urgent, according to André de Ruyter, former CEO of the state-owned power utility Eskom.
De Ruyter highlighted this reality in his keynote address at Daily Maverick’s first Earth Edition of The Gathering event at the Cape Town International Convention Centre (CTICC) on May 26.
Addressing a large audience of energy analysts, climate activists, journalists, government executives, and community and business leaders via a video-link, De Ruyter emphasised the need for decarbonisation to allay South Africa's energy crisis, restore investor confidence and create jobs.
He noted that the energy transition must be equitable and that it presents an opportunity for South Africa to lead the world in environmental competitiveness, Daily Maverick reports.
According to De Ruyter, there are five arguments for decarbonisation:
De Ruyter said that South Africa can allay the energy crisis by rapidly deploying renewable energy at scale. “We now have a proven technology, both wind and solar,” he explained.
“That is the cheapest, more than competitive against new coal, new gas, new nuclear, but more importantly [it] can be deployed within between 18 months and two years at utility scale, thereby addressing the much-needed shortfall of round about six gigawatts in generation capacity that the country requires.”
By removing the constraints that the energy crisis places on the economy, South Africa can restore investor confidence, De Ruyter pointed out. That can catalyse an enormous amount of investment amounting to approximately ZAR1.2 trillion ($60.7bn). South Africa can do this by making use of concessional finance that is available to it from the rich nations who are keen to assist it with the just energy transition.
“Of course, then we need to behave reasonably, we need to choose our partners carefully,” he warned. “And we need to account for the fact that geopolitics are at play, and we can’t just pick and choose our friends and ignore our own interests by siding with the pariahs of the world.”
The former CEO explained that coal miners’ concerns that their jobs may be imperilled by the transition away from coal are justifiable. However, numerous studies have indicated that up to 300,000 new jobs could be created “if this new energy profile decision is deployed wisely and in a structured manner rather than chaotically, which is pretty much the case at the moment.”
So, there is a real opportunity for South Africa by focusing on the just energy transition to combat the 38% unemployment rate, which is “simply catastrophic and unsustainable,” De Ruyter added.
“Very importantly, we can protect our exports,” he continued. Carbon border adjustment mechanisms (CBAMs), or carbon taxes are the reality. And they will be applied by South Africa’s trading partners, like the European Union and the United States, in the very near future, De Ruyter said.
“This will make our exports increasingly uncompetitive in a world where decarbonisation is already one of the major themes that occupy the minds of policymakers everywhere.”
“South Africa is the 12th largest carbon emitter in the world. Having an economy that is one and a half times more carbon-intensive than China, twice as carbon-intensive as the global average, we are at a unique disadvantage when it comes to the carbon intensity of the goods that we export,” he noted.
“If we want to maintain our export markets, then we better pay attention to how we can quickly and effectively decarbonise our electricity supply,” De Ruyter suggested.
“South Africa is uniquely susceptible, by some accounts twice as susceptible as other countries [to] the risks of climate change. And we cannot ignore that, we cannot pretend that we have the right to continue to burn coal and ignore the impact that climate change will have on our country,” De Ruyter told the audience.
“Burning the amount of coal that we do, about 160mn tonnes or so per annum, has a huge negative impact on the health of our people, and there are reportedly more than 2,000 premature deaths annually due to the effects of coal burning,” he added.
Decarbonisation, according to De Ruyter, will bring other benefits like creating a resilient water-supply system in the water-scarce country. Shutting down 22-23GW of coal-fired power generation capacity by 2035 will release sufficient water back into the Vaal River system to supply 220 litres of water per day for 200 million people.
“So that’s about three times the population of South Africa,” he said, adding that the extra water will become available without significant investment because the dam and irrigation infrastructure in the country already exists.
De Ruyter said his fifth argument for decarbonisation was the most challenging one. He spoke about the importance of implementing the changes without creating a legacy of negative social implications by leaving ghost towns behind as had happened in the north of England after the closing of coal mines.
“If we do not engage in a constructive, positive and enlightened way with people who will be affected by this transition, it is my fear that we will run into a brick wall of opposition,” De Ruyter cautioned. “We need to engage, and engage in a way that demonstrates empathy, understanding and a willingness to listen and to co-create solutions with those people who will be affected by this transition.”
De Ruyter mentioned that, during his time at Eskom, he was able to oversee the development of an assembly line for modular micro-grids at the Komati solar plant. He spoke about a training college initiative for the repurposing and reskilling of people for gainful employment in the new industry.
The former CEO added, “this is a huge opportunity, but it requires us to have a coherent policy environment.” He emphasised the need for new industrial, labour, environmental policies to be created for the country to be able to implement the transition carefully and deliberately.
To achieve this, a new kind of leadership is required, he said. De Ruyter believes that this leadership should increasingly come from civil societies, opinion-formers and the media to ensure that South Africa can manage the transition for the benefit of its people.
Summarising his address, De Ruyter said: “Let’s be clear, this is not a moon-shot. This is not impossible. This is not something that we cannot do as a country.”
“This is eminently within our grasp, but it requires resolve, it requires urgency, and it requires leadership to grasp this opportunity. And it is an opportunity, it is not a threat. And once we do that, we will be able to move forward and to ensure that South Africa rather than, once again for poor policy reasons becoming a pariah on the world stage, can lead the world and can ensure that we become and remain a competitive country from an environmental perspective, from an export perspective, but also from an energy perspective,” he concluded.