Latest news with #MtetoNyati
Daily Maverick
29-04-2025
- Business
- Daily Maverick
Eskom finalising plans for old coal-fired power stations to potentially run on gas, nuclear
Eskom says it will 'decouple' the shutdown of old coal plants from its Just Energy Transition strategy, and is exploring repurposing them for gas or nuclear power. 'Clean coal', natural gas or nuclear? In the next six months, South Africans should have a clearer picture of how Eskom thinks some of its aged coal-fired power plants will operate going forward following their 'repurposing'. In 2021, as part of its Just Energy Transition (JET) strategy, Eskom committed to 'retiring nine coal-fired power stations by 2035, not investing in new coal plants nor returning to service coal plants'. This was in line with the 2019 Integrated Resources Plan, which anticipated that about 11,000 MW of coal capacity would be decommissioned by 2030. In the time since, the approach has evolved with the shutdowns being delayed and managed to balance emission reduction commitments with the need to maintain grid stability and avoid exacerbating load shedding. In recent weeks, that approach has been codified into a strategy that may see coal stations that were once due to be shut down finding a second life as nuclear power stations. Presenting its Strategic Corporate Plan for 2025-2030, its Shareholder Compact for 2025-2026 and Budget for 2025-2026 to Parliament's portfolio committee on energy and electricity, Eskom board chairperson Mteto Nyati last week explained: 'What we have also done is to decouple the shutdown of the power stations from the implementation of the JET strategy and that decoupling has meant that now we are going to be doing what we're calling 'repurposing' of those power stations way before we shut them down so that we do not negatively impact the communities that depend on those power stations.' The JET was one element of Eskom's part of South Africa's broader energy transition, where the country would, in line with international treaties, climate imperatives and the realities of the energy market, reduce the carbon intensity of South African society and its economy. South Africa has pledged to reduce emissions to between 350 and 420 million metric tons annually by 2030, down from the current 442 million tons per year under its updated Nationally Determined Contribution (NDC) submitted to the United Nations Framework Convention on Climate Change in 2021. Eskom is the largest contributor to South Africa's greenhouse gas emissions and the majority of those emissions, in turn, come from the utility's fleet of coal-fired power stations. Gas, nuclear or something else? Speaking to Daily Maverick in Parliament last week, Acting Director-General of the Ministry of Electricity and Energy Subesh Pillay said that whether the repurposing of the stations would mean they would generate electricity using natural gas or nuclear energy, or something else altogether, hadn't yet been finalised. 'The repurposing of power stations, firstly, is technology neutral. So it could be nuclear, it could be clean coal technology, it could be gas. Yes, nuclear is a big consideration because if you look at SMR (small modular reactors) as a technology, the location of the existing power plants makes it (feasible because of) grid access, you've got EIA (environmental impact authorisation) approvals, you've got a site that's designed for those kind of applications. So existing sites does lend itself to maximise the assets that you've got there, to invest in small modular reactor technology on those existing sites. That detailed work is what Eskom is currently finalising now,' said Pillay. Briefing Parliament's portfolio committee on energy and electricity a day earlier than Eskom, Nuclear Energy Corporation of South Africa CEO Loyiso Tyabashe said: 'We're looking at partnering with Eskom for fleet rollout and repurposing of their coal power stations going forward.' In response to a question from members about specific timelines, Nuclear Energy Corporation of South Africa board chairperson David Nicholls said: 'My view is that if we were to go with a (small modular reactor) design that is currently in commercial operation, for example the Chinese or the Russians, but quite likely the Chinese because the technology is PBMR (pebble bed modular reactor) style, then we could have the lead unit up and running on the Pelindaba site probably around 2031/2032. 'Prior to the startup of the actual reactor, it would be highly credible for follow-on machines to be ordered because we would know the Chinese design works and we'd have got far enough in the construction of the first one to sort out licensing, regulations, economics and the rest of it, so idealistically by the mid-2030s we could be rolling out small modular reactors on to decommissioned sites of the old coal stations,' Nicholls said. Asked about which power stations would be earmarked for such repurposing and which technologies would be used, Pillay said: 'At the programmatic level, within the next six months, we should be able to say which power stations, what technology are we pursuing and that will include across the board, gas, nuclear and clean coal.' Health impact While the details about Eskom's coal fleet's future are being worked on, the cost of delay mounts. A 2023 report from the Centre for Research on Energy and Clean Air found that if the decommissioning of the country's coal plants only begins in 2030 or beyond, it would cause a projected 15,300 excess air pollution-related deaths and economic costs of R345-billion. How this changes if the stations are repurposed is less apparent. Ntombi Maphosa, an attorney at the Centre for Environmental Rights, told Daily Maverick that she was unable to comment fully without knowing which plants were due for repurposing. 'What I can highlight, though, is that in 2024, former minister Barbara Creecy directed Eskom to submit detailed decommissioning plans for Camden, Hendrina, Arnot, Grootvlei, and Kriel. Eskom has indicated that these will be submitted in May this year. Eskom is obliged to run a participation process on the decommissioning plans, and that is one of the fora where meaningful engagement must take place with affected communities. 'We have always advocated for the timely decommissioning of ageing power plants, especially because most Eskom power stations do not operate in accordance with air pollution laws (the Minimum Emission Standards). Furthermore, the five power stations mentioned above have been granted suspensions from the emission standards, meaning they will be allowed to pollute at higher levels than allowed in the Minimum Emission Standards until they are decommission,' said Maphosa. 'Keeping the power stations operational for longer and in non-compliance with the Minimum Emission Standards will impact the health and wellbeing of affected communities and exacerbate air pollution in the Highveld (which is already extremely polluted, resulting in deaths and illness). This is taking place, despite the Deadly Air judgment, which was recently confirmed by the Supreme Court of Appeal.' 'The Deadly Air judgment holds that the right to an environment not harmful to health and wellbeing is immediately realisable. This principle should always be considered in every decision-making process and how it is going to affect people,' she said. Francesca de Gasparis, Executive Director at the South African Faith Communities' Environmental Institute echoed Maphosa's sentiments. 'Plans like those proposed by Eskom for the power plant repurposing need effective public participation and much more information in the public realm on the true costs (whole life cycle of energy system), jobs, climate and safety implications, and affordability of the electricity from these sources. A Just Energy Transition requires Eskom to start operating in a very different way from what it has done historically,' she said. 'Communities are not being given the opportunity to be meaningfully consulted. This is at risk of repeating patterns of exclusion, once again not realising the opportunity for development or to strengthen democratic processes and community participation. 'The government seems not to be following democratic processes or understanding its role in terms of service delivery or what will be necessary to tackle climate change and ensure vulnerable communities do not suffer as a result of poor decision making. Eskom is beset with problems and is increasing electricity tariffs by double digits each year, and yet their planning and updated strategy show how out of touch they are with lived reality for many South Africans.' DM
Daily Maverick
28-04-2025
- Business
- Daily Maverick
Eskom bets big on renewables with new ‘green' subsidiary
Eskom, with its generation capacity historically dominated by coal technology, is making clear its intentions to enter and compete in the renewable energy sector with a planned new entity. In a presentation to Parliament's portfolio committee on energy and electricity, Eskom shared more details about its strategy to be a player in the renewable energy sector. The utility's executive was briefing members on their strategic corporate plan for 2025-2030, their shareholder compact for 2025-2026 and budget for 2025-2026. Eskom board chairperson Mteto Nyati explained that one of the utility's four strategic objectives was to 'facilitate a competitive future energy industry'. As part of this, Eskom aims to significantly increase its renewable energy portfolio, committing to around 5.90GW of clean energy projects by 2030. A part of this objective includes the accelerated establishment of Eskom Green Co, the company's renewable energy business. Eskom Green will be one of the four unbundled entities that will fall under the Eskom holding company. The other companies are National Transmission Company of South Africa, which is already a legal entity, National Electricity Distribution Company of South Africa and Eskom Generation, which are due to be legally separated next. 'We have embraced, as Eskom, the renewables agenda,' said Nyati. 'In the past, our strategy involved only us managing the current fleet and not participating in new generation capacity. 'That has changed. We are going to be participating in renewables in a big way, and we have already started to operationalise a business unit that makes us to be a relevant player within the space.' Almost two weeks ago, Eskom issued an invitation to tender for 'firms with a proven track record in establishing renewable energy businesses' to help it start this process. It said the objective of Eskom Green Co would be to 'operate independently of the main Eskom entity to allow for greater governance agility, competitive market positioning and enhanced Public-Private Partnerships (PPPs)'. Eskom, in a statement, said it had an 'executable initial pipeline' of at least 2GW of low and zero-carbon energy projects by 2026 and had developed a pipeline of more than 20GW of low and zero-carbon energy projects to diversify its energy mix. It plans to 'realise' roughly 5.9GW of renewable energy projects by the end of this decade. At Friday's meeting, DA MP Kevin Mileham asked for more information about the proposed new entity. 'Why are we breaking out a new entity when it's clearly part of generation? It's a division of generation. It's not a new entity. I mean, nuclear is not an entity by itself. Coal is not an entity by itself. Why is Green Co or Eskom Green a new entity? Why is it going to have its own board of directors? Why is it going to have its own finance team? Why is it going to have its own legal team and HR team, and things like that? 'Aren't we just duplicating already existing personnel capacity infrastructure and therefore increasing our costs?' In response, Eskom CEO Dan Marokane explained that the unbundling was an operationally motivated decision. 'I want to address the issue that deals with the structure of Eskom going forward, as to why are we having a separate green entity, why is it not within generation?' 'These are all aspects that are operational, that deal with how we bring into reality the strategic intent that we have. Our strategic intent is to unbundle to set up separate entities that will be efficient in their part of the value chain,' said Marokane. The new green generation part of Eskom's business, he explained, 'is an entity that is required to enable us to unbundle the generation business in a manner that does not make us run the risk of losing all the licences. These are operational matters about structuring and how to set up these transactions in a manner that allows the realisation of the objectives. 'The renewables business is going to be a different business in terms of thinking. It will involve partnerships so that Eskom's balance sheet is not the only one that is exposed. We can't afford to go to the previous levels of debt. So we'll do business as a transaction with others, with their money, on our land, with our people, using our skills and choosing to de-risk those projects because it will be in a competitive world. 'So how it's structured needs to enable that kind of a setup in line with the mandates that we're seeking to have.' DM
