- To this point, South Africa and Senegal are the one African international locations to have agreed to a Simply Vitality Transition Partnerships (JETP), with South Africa securing a deal for $8.5 billion, whereas Senegal secured one for $2.7 billion.
- How South Africa and Senegal intend to leverage these offers differ drastically, nevertheless, as do their energy era circumstances.
- At the moment, coal continues to dominate South Africa’s power portfolio, at over 80 per cent of the nation’s energy era combine.
Simply Vitality Transition Partnerships (JETP) have been launched lately to supply monetary assist to creating nations as they transition away from fossil fuels. In 2021, in the course of the twenty sixth UN Local weather Change Convention of the Events (COP26), South Africa turned the primary nation to signal such a deal. Senegal and the Worldwide Companions Group (IGP) signed a JETP in June 2023.
I’ve stated earlier than that the easiest way for Western international locations, and the developed world at giant, to assist Africa transition from fossil fuels is thru funding and collaboration, not patronization. That is exactly what the JETP applications search to do, help power rising economies which might be depending on coal to transition away from fossil fuels whereas leaving room to deal with the related social penalties.
That’s funding, that’s collaboration, and above all, it’s respectful of the fact that Africa can transfer solely by itself schedule on this matter. Arbitrarily forbidding us from utilizing our pure assets will solely do extra hurt than good.
To this point, South Africa and Senegal are the one African international locations to have agreed to a JETP, with South Africa securing a deal for $8.5 billion, whereas Senegal secured one for $2.7 billion. How South Africa and Senegal intend to leverage these offers differ drastically, nevertheless, as do their energy era circumstances.
South Africa: Pulled Between Priorities
Coal continues to dominate South Africa’s power portfolio, at over 80 per cent of the nation’s energy era combine. Attributable to continual load shedding and power scarcity points, the nation is now being pulled between two priorities, guaranteeing power safety and adhering to its decarbonization plans. Basic energy outages have plagued the nation since 2008 however intensified lately and successfully hamstrung South Africa’s financial system, which has not surpassed even 1 per cent gross home product (GDP) annual progress within the final decade.
The nation’s growing older coal fleet faces important upkeep points which led to a number of of the nation’s largest coal models being rendered inoperable in 2023. That yr additionally noticed the worst load shedding the nation has confronted but, greater than twice what it skilled in 2022, resulting in power shortages for 335 days out of the yr.
This load shedding led to a pointy improve in demand for photo voltaic panels and batteries, however Eskom (South Africa’s energy utility) has needed to prioritize power safety as an alternative, prolonging its reliance on coal-fired crops and slowing down their decommissioning. To their credit score, Eskom has made important enhancements to their coal crops’ upkeep and restore because of a restoration technique launched in early 2023, they usually haven’t suffered one other load-shedding occasion since March 26, 2024.
Nonetheless, the choice to extend their reliance on coal is at odds with South Africa’s JETP. It has additionally instantly led to the South African authorities looking for renegotiation of finance offers tied to its transition to cleaner power sources, amounting to some $2.6 billion of the initially agreed to $8.5 billion.
Above all, proper now South Africa requires an answer that can guarantee its power safety whereas additionally retaining the nation on monitor with its JETP commitments, particularly given its peak demand by 2030 is anticipated to achieve 38 gigawatts (GW), a full 6 GW greater than its present peak. And regardless that 13.6 GW of recent energy crops are anticipated to come back on-line by 2027, with photo voltaic PV accounting for over half and onshore wind accounting for 25 per cent of the brand new capability, coal continues to be anticipated to fulfill two-thirds of day by day demand.
Battery storage belongings awarded by South Africa’s Battery Vitality Storage Unbiased Energy Producers Procurement Programme (BESIPPP) can even contribute to this new capability. Renewable-based era in South Africa can be anticipated to develop from almost 14.1 per cent at present to almost 29 per cent by 2030.
I wish to be very clear right here: South Africa’s renewable power progress is commendable, and Eskom’s resolution to prioritize power safety through coal when an alternate resolution wasn’t instantly obtainable was comprehensible and pragmatic. However the nation’s renewables aren’t advancing quick sufficient to cowl for the growing older of its coal fleet, and no quantity of emergency upkeep campaigns can be sure that comparable points gained’t result in a load-shedding disaster once more.
If unaddressed, it is going to introduce the danger of shortfalls when the coal fleet is inevitably shut down at its finish of life. Fuel-to-power is thus essentially the most prudent possibility for South Africa to prioritize whereas it continues working to develop its renewable energy sources.
The flexibleness offered by gas-to-power will assist meet demand as soon as the coal fleet can not present South Africa’s baseload energy, leaving it with solely its Koeberg nuclear energy plant and at present restricted photo voltaic and hydropower assets to fill within the hole. Not solely is pure fuel cheaper and environment friendly as an influence supply than coal, however it is usually comparatively low cost to retrofit a previously coal-fired plant with fuel generators, permitting South Africa to each step by step part out coal whereas saving cash that will in any other case be spent constructing fully new infrastructure.
All of it will matter an excellent deal, as South Africa anticipates phasing out coal to require $99 billion {dollars} between 2023 and 2027. To this point, it has raised half between their JETP take care of the IGP, $33 billion in personal sector investments, and $10 billion from the general public sector. South Africa hopes to fill the hole by means of each home and worldwide personal entities within the type of grants, ensures, and concessional loans.
Learn additionally: Mozambique’s $80 Billion Inexperienced Vitality Gamble: A Strategic Shift with World Implications
Simply Vitality Transition in Africa: Fewer Struggles in Senegal
Senegal, in the meantime, seems to be to be having fewer troubles, being reliant on liquid gasoline sources somewhat than coal. The $2.7 billion raised by means of its JETP is anticipated to draw and mobilize additional investments from each the personal and public sectors, a lot the identical as South Africa. Senegal, nevertheless, can even be receiving technical help from its worldwide companions to spice up the combination of its renewable power infrastructure and know-how, with a heavy give attention to grid stabilization and battery storage.
This aligns nicely with its electrification plans, which purpose to attain 40 per cent of its put in capability combine offered by renewables by 2030, up significantly from the present 22 per cent. Senegal has additionally dedicated to creating an funding plan inside 12 months to establish its wants, alternatives, and allocations to fulfill its targets.
To that very same finish, Senegal plans to publish a revised nationally decided contribution (NDC) at COP30, set to happen in late 2025. The present NDC outlines an unconditional goal of 235 MW of photo voltaic PV, 150 MW of onshore wind, and 314 MW of hydro by 2030. With worldwide help, these targets are set to rise to 335 MW of photo voltaic PV, 250 MW of onshore wind, 50 MW of bioenergy and 50 MW of photo voltaic thermal.
General, each South Africa and Senegal stand to learn considerably from their JETPs, and this can be a pattern I hope to see proceed sooner or later for African states. There are, in fact, rising pains. JETPs are nonetheless a nascent program, and the primary few offers have been signed as political guarantees at first earlier than the total technical and coordination particulars might be absolutely labored out by all sides.
The implementation course of for South Africa and Senegal has thus been delayed whereas consultations and negotiations clean over the logistical particulars. As well as, JETPs alone might be nowhere close to sufficient to completely cowl the monetary burden of transitioning African international locations away from fossil fuels, and buying the personal monetary investments to bridge the hole might show tough for a lot of international locations.
This is the reason it’s essential for African states, and the world at giant, to maintain a detailed eye on how issues develop in South Africa and Senegal, as their efforts to deal with these challenges will little doubt set the instance for others.
Op-Ed By NJ Ayuk, Govt Chairman, African Vitality Chamber.
