South Africa’s Just Energy Transition presents an opportunity for not only investors but also for those South Africans who will be closely affected by the transition.
This is according to Eskom Chief Executive, Andre de Ruyter, who was speaking during a panel discussion on the Just Energy Transition at the South African Investment Conference.
“The transition presents a fantastic opportunity for South Africa to grab hold of a stimulus which could change the face of the economy if we do this right.
“There are opportunities for us to create new industrial opportunities if we create sufficient scale in the manufacturing of renewable energy components…in the parts of the country that will be most affected by the move away from coal,” he said.
De Ruyter suggested that investments to train and upskill youth in those areas where these mines are based would be one way to offset any loss of income for those communities.
“In order to make the transition just, we have to pay attention specifically to the coal belt of Mpumalanga. We need to create alternative futures not only for the mines but also the communities in which they work.
“[There are] communities…around our power plants and the coal mines that feed the plants. For Eskom to simply lock the gates and walk away is not something that we’re prepared to contemplate. Therefore if we can ensure that the transition takes place in a way that is just to that particular constituency…they are the people who will be directly affected by the transition,” he said.
De Ruyter explained that the power utility’s decarbonisation plan – which is expected to take off at least 22GW of coal fired energy off the grid by 2035 – will present opportunities for investment in renewable energy capacity.
“To replace that…will require an investment of about 60 000MW of renewable capacity. In addition to that, there will need to be huge investments in storage. Now all of that creates a market and if we have the right regulatory certainty and policy certainty then I believe that investors are looking at an opportunity that could be very attractive,” he said.
Fresh off the announcement that the African Rainbow Energy will be investing at least R3 billion in renewable energy projects, the company’s chief executive Brian Dames explained that the company is looking to ensure that the infrastructure needed to carry out the transition is available.
“We need grid access. We need to build lots and lots of transmission networks in South Africa…without that, none of the [transition] is possible. We have to think about automotives…how you can get from here to Cape Town in an electrical vehicle.
“We have to be realist to some of the issues that we face so we as a company are going to invest R3 billion in the next two years and there are a lot more opportunities.”
Dames added that the company has also taken the step to involve disadvantaged groups in its ownership to ensure that they benefit from the opportunities that the just energy transition presents.
“They are huge opportunities. So what do we think is just? We have just changed the ownership of our company…39% of our company is now owned by workers, black women and black youth. [That] is because the sector, for a long time, has been seen as different and people don’t understand, we haven’t engaged, so we wanted to bring people closer so that they are part of this transition,” Dames said.