Less coal-fired energy output: Australia reports record, South Africa uncertain
Measured over 7 days, Australia's electricity generation from coal is below 50 % for the first time. Meanwhile, South Africa's plans fall behind schedule.
Symbolic image of exhaust gases
(Image: Daniel AJ Sokolov)
Australia's National Energy Market (NEM) has generated less than half of its electricity from coal for the first time in a week. In the seven days up to and including Monday, 49.2 percent of electricity generation came from coal. Around a quarter came from wind power, around a fifth from solar cells and around a twentieth from hydropower.
This is shown by data from the Open Platform for National Electricity Market Data (OpenNEM). In 2006, 87 percent of electricity in the Australian NEM still came from coal. The NEM is not quite as national as the name suggests, but still accounts for around 80 percent of electricity production. It includes all states except Western Australia, but not the territories and outer areas. Of these, only the Australian Capital Territory (ACT) is included in the NEM. Western Australia has been generating less than half of its electricity from coal since 2015, and only a third so far this year.
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The continent's rapid transition to wind and solar power is leading to high volatility in the NEM, resulting in very high electricity prices and widespread power outages. This has prompted investors to put money at risk in huge storage batteries, which can very quickly provide balancing power if the frequency in the grid drops too low and a brownout threatens. The huge batteries have already paid off for electricity customers in Australia; whether this also applies to their shareholders remains to be seen.
South Africa needs coal-fired power plants for longer
There is less good news from South Africa. The country will have to operate three coal-fired power plants scheduled for shutdown for a few years longer, at least until 2030, in order to ensure the stability of its electricity supply. In addition, the operating life of a nuclear reactor commissioned in 1984 was recently extended until 2044. Its neighboring reactor is due to be extended next year.
South Africa is the first country to be supported by richer countries as part of a Just Energy Transition Partnership in order to achieve a significant reduction in greenhouse gas emissions. Around four-fifths of electricity there comes from coal. In 2021, the European Union, Germany, France, the United Kingdom and the United States of America pledged their support. From 2023 to 2027, 8.5 billion US dollars are to flow to accelerate South Africa's decarbonization.
Not all in cash; a mixture of subsidies, favorable loans and guarantees from the public sector, private loans and technical support is planned. 8.5 billion dollars sounds like a lot, but it is only around one twelfth of the planned investment. In the meantime, the amount has risen to 9.3 billion dollars, half a billion of which comes from the World Bank. A low-cost loan of 2.6 billion dollars is intended to help with the phase-out of coal-fired power generation, whereby the miners in the coal mines are also to be explicitly helped.
Energy crisis
Unfortunately, South Africa has been in a deep energy crisis for years. The state-owned power company Eskom is heavily indebted and is considered corrupt; conversely, the financially ailing municipalities owe Eskom billions. The development of renewable energy sources is proving difficult, not least due to the inadequate transmission grid. At the same time, the power supply is anything but secure: last year there were 205 days of shutdowns, often lasting half a day.
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Things are going better this year; in August, Eskom was able to celebrate 150 days without planned power cuts. However, the country is unable to implement the promised shutdown of three coal-fired power plants within the planned timeframe in return for the billion-euro loan. The three power plants are to continue operating until 2030. However, according to the plan, these and other coal-fired power plants are to run at a lower average capacity in order to achieve the emissions target after all.
Jennifer Morgan, State Secretary and Special Envoy for International Climate Policy at the Federal Foreign Office of the Federal Republic of Germany, is currently in South Africa. She wants to find out from the country's new government, which took office on July 1, exactly what the new roadmap looks like. This will determine whether and how the loan will flow.
Comprehensive accompanying measures with a model effect
The plans by no means only include the development of low-emission electricity sources. The electricity grid should and must also be significantly expanded. Eskom is to be deleveraged and split up: In future, South Africa wants electricity generation, transmission and distribution to households to be managed separately. Private power plants are also planned. The Just Energy Transition Implementation Plan 2023-2027 also includes the electrification of road transport, green hydrogen production and support for municipalities that currently depend on coal-fired power generation.
The partnership between the EU and other institutions and South Africa is effectively a pilot project. Much depends on its success. After South Africa, Vietnam (15.5 billion dollars), Indonesia (20 billion dollars) and Senegal (2.5 billion dollars) have also committed to a Just Energy Transition Partnership.
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