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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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South Africa's Effort to Wean Itself Off Coal Dependency Proving Difficult

Coal is one of the fossil fuels most responsible for generating greenhouse gases.
 
The effect of such emissions on the atmosphere and the consequences for long-term global warming are a major topic at the United Nations Framework Convention on Climate Change (UNFCCC) meeting currently underway in Durban, South Africa.
 
Dampening the expectations of South African environmentalists, on 1 December South African Energy Minister Dipuo Peters told journalists that Pretoria could not ignore the fact that South Africa is a coal-rich economy, "nor can we ignore the significant contribution of coal mining industry towards the economy."
 
If one regards energy reserves as good news, then South Africa is sitting pretty, as in 2010 the country’s coal reserves were estimated at 32 billion tons, which at current local consumption rates would last South Africa for more than a century.
 
So, how integral actually is coal to South Africa’s economy. Greenpeace Africa says that coal-fired plants currently generate more than 90 percent of South Africa's electricity, the nation is the world’s fifth largest producer of coal and sixth largest consumer.
 
And indigenous demand for coal is to rise, because the World Bank is granting South Africa a $3.75 billion loan to build the world's fourth largest coal-fired power plant in Mpumalanga.
 
Nevertheless, Peters assured journalists that the South African administration remains committed to reducing South Africa's overall total carbon emission, citing President Jacob Zuma's pledge at the 2009 United Nations Climate Change Conference in Copenhagen that South Africa planned to reduce greenhouse gas emissions by 34 percent in the next decade and 42 percent by 2025.
 
At the Durban conference Zuma reiterated his administration’s commitment to renewable energy, telling his audience that South Africa will soon announce the results of the bidding process for the first 3.725 megawatts of green energy to be procured under our Renewable Energy Flagship Program and that "South Africa plans to scale this up to at least 18 gigawatts, to account for 42 percent of new capacity being commissioned" before cautioning that that the biggest barriers to developing renewable energy in Africa up to now have not been technological, but financial.
 
So, what is the reality here? Is South Africa serious about reducing carbon emissions even while apparently increasing coal usage?
 
According to South Africa’s Department of Environmental Affairs, it takes 1.1 lbs of coal and a quart of water to produce just a single kilowatt-hour of electricity, leaving behind .31 lbs of ash waste and 1.98 lbs of carbon dioxide.
 
Looking closely at the overall picture, a contradictory picture emerges. The Mpumalanga power plant certainly indicates that the government is playing hard and fast with the truth. Peters however maintained that the Green Economy Accord signed by the government committed the state to focus on advancing “clean” coal technologies through projects such as underground coal gasification along with carbon capture and sequestration, adding that carbon capture technology will increasingly be a key mitigation option for South Africa and that furthermore the country’s energy sector was committed to implementing it as well.
 
According to Peters, further reductions in South Africa’s overall generation of greenhouse gases will come from other power projects under the government's Integrated Resource Plan, which foresees South Africa diversifying its renewable energy production matrix to include more than 3 700 megawatts of power produced by various natural gas, wind, hydroelectric and solar power projects.
 
But what about the rest of Africa’s relationship to coal? Simple – it’s dominated by South African exports, which provide 92 percent of the continent’s coal consumption. More than a quarter of coal mined in South Africa is exported and coal is now South Africa’s third largest source of foreign exchange, exceeded only by platinum largest and gold.
 
A further domestic consideration underscoring the difficulty of weaning South Africa off coal is the fact that around 35 percent of the liquid fuel used in South Africa is derived from coal mined by Suid Afrikaanse Steenkool en Olie, better known as Sasol Ltd., which produces gasoline and diesel from coal and natural gas using Fischer-Tropsch process at its facilities in Sasolburg and Secunda CTL. Sasol is a world leader in utilizing the Fischer-Tropsch procedure and with a revenue stream for 2011 of roughly $15.9 billion, don’t expect to see the company’s coal output shrink anytime soon.
 
But optimists may note that Zuma remarked that on 7 December the government will unveil the shortlist of foreign energy firms for its $12 billion South African Renewable Initiative (SARI), “a funding mechanism which will help us unlock South Africa's green growth potential through the funding of large-scale renewable developments. This will be achieved with the assistance of global partners - donors and Governments, who will provide innovative funding solutions to facilitate it.” Rival Chinese, Indian, American and European companies attending the UN Durban conference are already clambering over one another for a slice of one of the world's largest renewable energy deals.
 
So – South Africa is committed to renewable energy, but – right now coal not only helps keep the lights on, but is the country’s third largest source of export revenue, so the gaps between rhetoric, intentions and reality are likely to remain significant for the foreseeable future.

By. John C.K. Daly of Oilprice.com




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