Business Leadership South Africa CEO Busi Mavuso emphasises in her latest newsletter the importance of an investment plan being presented by the South African delegation at COP27 this week, for the Just Energy Transition Partnership (JETP).

The twenty-seventh Conference of the Parties is being hosted in Egypt from November 6 to 18.

The JETP involves a group of developed countries that pledged $8.5-billion of funding to South Africa during COP26, to help reduce the economy’s carbon footprint.

The delegation aims to turn the pledge into a tangible commitment to fund the country’s transition to cleaner energy.

The investment plan sets out a vision for electricity production from renewable energy, a switch to electric vehicles and a major new green hydrogen industry. Mavuso states about R1.5-trillion of new investment will be needed up to 2027 to realise government’s plans.

The plan itself still needs to go through a public consultation process, with some of the plan’s elements still needing work, Mavuso notes.

She says businesses need to pay close attention to this process. Should the delegation succeed, a major catalyst for the transition will come into play. She explains the transition is not just about decommissioning coal-fired power plants and switching to electric vehicles, but also about massively ramping up overall energy production.

“This will, of course, require huge investments in infrastructure, particularly new generating capacity and the grid, which presents opportunities for many businesses,” Mavuso points out.

She believes there to be a business case for the transition that is separate from the environmental case, in that considerable private sector participation will be required to ensure energy security, if Eskom is to decommission six of its coal-fired power stations within the next five years.

The transition will not happen overnight, Mavuso highlights, but rather it will involve a gradual ramp-down of coal mining and domestic use. She says the role of gas in the energy transition is uncertain at the moment; however, it may serve well as a transition fuel, with new opportunities emerging in the gas sector as a result.

Meanwhile, Mavuso comments positively on the R9-billion loan that Eskom signed with World Bank to convert the Komati coal-fired power station to generate electricity using renewable energy sources and battery storage.

Mavuso says this is an excellent demonstration transaction of how a just transition can be delivered.