Eskom CEO André de Ruyter is locking horns with energy minister Gwede Mantashe over South Africa’s future electricity generation plans.
Sunday newspaper Rapport reports that Mantashe is trying to stop the Eskom CEO and public enterprises minister Pravin Gordhan from binding South Africa to a radical shift from coal-fired power generation.
That comes after the announcement by US president Joe Biden at the 26th Conference of the Parties (COP26) that several rich nations would provide funding of $8.5 billion (R133.5 billion) to South Africa over the next three to five years to speed up the country’s move from coal to clean energy.
The commitment came following a meeting between South African government officials and climate envoys from the UK, US, Germany, France and the European Union in September 2021.
While South Africa’s public enterprises minister, environmental affairs minister, and deputy finance minister attended the meeting, Mantashe skipped it.
Mantashe said that talking about debt relief and financing was “above his paygrade” in response to questions on why he didn’t attend.
He has also said that rich nations shouldn’t force South Africa to ban new coal-power projects and impose other conditions as a requirement for funding to help reduce its environmental footprint.
Mantashe has long advocated for the continued use of coal in South Africa’s energy mix.
His vision includes building two new 750MW coal-fired power stations with cleaner technologies in 2023 and 2027.
Mantashe has said he is willing to go to court to defend the construction of these power stations.
The minister’s view on coal generation threatens the COP26 funding, as this will be dependent on South Africa switching from coal as its primary source of electricity generation.
Mantashe’s staunch support of coal comes as Eskom faces mounting pressure to drop its carbon emissions.
A study from the Centre for Research on Energy and Clean Air (CREA) found that Eskom was the world’s most polluting power company.
The report found that Eskom emits more sulfur dioxide than the entire power sectors of the EU and US, or the US and China, combined.
De Ruyter has agreed that South Africa cannot simply shift away from coal immediately.
However, he believes large and cheap funding from rich nations, like that announced at COP26, provided an excellent opportunity to switch to renewable energy sources and lower carbon emissions.
Mantashe has also blamed Eskom for the delays in the procurement of emergency power to alleviate load-shedding.
In an interview on Newzroom Afrika on Thursday, Mantashe accused Eskom of “toing and froing” about the agreements with the government’s preferred bidders in the programme.
The minister suggested that the government had done its part to ensure Eskom had 1,996MW of emergency power to tap into and that the utility was now delaying the start of construction work on infrastructure to wheel this power into the grid.
This is a far cry from reality, however.
The three Karpowership projects that will supply a combined 1,220MW of the emergency generation were met with enormous scrutiny from energy experts and were refused environmental approvals.
As a result, the department has delayed financial close for the projects by four months to January 2022.
There are also concerns about the liquified natural gas (LNG) costs required to run the turbines that generate electricity on the powerships.
Eskom is refusing to sign the agreement with Karpowership until the national energy regulator (Nersa) clarifies the formula that it will use to calculate LNG prices in South Africa.
De Ruyter has maintained that it would be a dereliction of his duty if he bound Eskom to any deals without completely understanding the financial implications.
In addition, the department is facing a legal challenge from other energy providers regarding its choice of preferred bidders.
That matter is set to be heard in court on 30 November 2021.