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SA needs new mindset for power generation as world moves towards renewables - Eskom's Hadebe

May 14 2019 19:00
Melanie Gosling, Fin24

South Africa needs to face the truth that there are increasingly fewer financial institutions that are willing to fund fossil fuel, Eskom’s CEO Pakamani Hadebe said on Tuesday.

“There is a growing number of fund managers looking at the role of funding energy, and a growing number that are not going to fund fossil fuel,” Hadebe said in a keynote address at the African Utility Week in Cape Town. “So where does that leave us? It says that we cannot do things as we have always done. There needs to be a new mindset.”

Hadebe said out of the four major banks in South Africa, three had already stated that they would no longer be funding fossil fuel. The world was moving towards renewable energy, but Africa was moving at a slower pace. 

Sector 'changing fast'

“The energy sector is changing very fast. Unless we adapt to the changing world, we will remain behind. Technological advances have caused a lot of rethinking on how to undertake business. There is no doubt that the world is moving out from fossil fuel to renewable energy,” Hadebe said. There were those who believed South Africa should remain in fossil fuel, he said. There were those who believed the country should move more rapidly towards renewables. If South Africa were to grow, the energy supply needed to grow, said Hadebe.  

“How do we do that if we are still looking at coal as our main source of energy?”

And the challenge was, who was going to fund that, he said.

Hadebe said in 2018 the IAE report said that for the first time the leading source of electricity was gas, which accounted for 27.4%, while coal was 25.4%. By 2024 renewable energy would account for 30% of global electricity, up from 24% in 2017. Hadebe said there was no doubt that the trend in OECD countries was towards renewables. 

In South Africa, the draft Integrated Resource Plan (IRP) was also “pointing to that direction”. By 2030 coal would account for 44% of electricity generation which would come down to 30% by 2040. The African continent had huge potential for generating renewables, and could produce 10 terawatts of solar, 1300 gigawatt of wind and 1 gigawatt of geothermal. 

Hadebe said the private sector’s renewable energy power plants had helped Eskom get through load shedding earlier this year. If it had not been for these independent power producers (IPPs), the utility would have struggled to maintain load shedding at Stage 1 and 2.

“If we didn’t have IPPs and a partnership with Mozambique, the situation would have been far more severe than we had,” Hadebe said. Another challenge was water: Eskom used 2% of South Africa’s fresh water for power generation.

Eskom planned to reduce this high amount by installing dry cooling in Medupi and Kusile. Environmental issues were important. “I am very appreciative that you are not looking only at energy issues (at the conference) but also at environmental issues,” Hadebe said.

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