State-owned power utility Eskom expects to complete its socioeconomic impact studies by the end of March for the planned shutdown of the Grootvlei, Komati and Hendrina power stations, in Mpumalanga, which are the first of ten coal plants scheduled for decommissioning by 2040.
The decommissioning of the three power stations is anticipated to take place over the coming five years and Eskom has initiated a process to assess the potential for ‘repowering’ some of the stations using alternative generation technologies, including renewables, gas, biomass, battery storage and hydrogen.
In parallel, the utility is assessing prospects for ‘repurposing’ the sites for nonenergy-related economic activities, such as agriculture and the provision of bulk water services and water treatment.
Eskom just energy transition office head Mandy Rambharos says the utility is keen to invest directly in renewable energy, but that any repowering of the stations will need to be pursued in partnership with private investors, owing to Eskom’s prevailing financial stresses.
Eskom is, however, assessing whether it could implement a so-called ‘just energy transition transaction’, which could enable it to secure grant and/or concessional climate finance in return for accelerated emission-reduction commitments.
Besides enabling it to invest in clean-energy solutions, such a transaction could also help the utility in reducing or refinancing its unsustainable debt, which currently stands at about R480-billion.
Speaking during the latest in a series of just-transition webinars facilitated by Trade and Industrial Policy Strategies on Tuesday, Rambharos reported that the socioeconomic impact studies for the three stations were well advanced, despite some initial delays in convening stakeholder engagement sessions as a result of Covid-19 lockdown restrictions.
The studies are assessing the impacts that the shutdowns could have on employees and communities, as well as on the environment, land use and the local, regional and national economies.
Eskom aims to use the process to establish a framework for managing the closure of stations in a way that facilitates the transition to a cleaner electricity system, but is also ‘just’ for coal-affected workers and communities.
The utility recently outlined a net-zero vision by 2050 even though it currently still intends to be producing some electricity from coal by that date. To meet the net-zero target, Rambharos said that residual emissions would be “balanced” through the purchase of carbon credits, or through investments in projects that removed carbon dioxide from the atmosphere.
The immediate focus, however, was on firming up plans for Grootvlei, Komati and Hendrina by concluding a “social compact” with affected workers and communities on a social plan for the shutdown of the plants, as well as their possible repowering and repurposing.
The compact would also outline plans for alternative economic development in the affected areas, as well as for the reskilling of workers.
Rambharos said that, while the transition would not be an abrupt change and that it would be implemented in a phased manner, it nevertheless represented a radical change for Eskom.
“We are committed to a just energy transition, where the ‘just’ and the ‘transition’ are equally important,” she said, describing that philosophy as a “peg in the ground”.