Extending the life of coal-fired power plants is a bad idea
Trucks and cars drive near the Duvha coal-based power station owned by power utility Eskom, in Mpumalanga. Picture: SIPHIWE SIBEKO/REUTERS
Of that funding requirement, just short of R1-trillion will have to be invested in new generation capacity, including between 50GW and 60GW of variable generation capacity from renewable sources, 10GW of storage and 6GW of “peaking” capacity such as gas-fired power. It is highly unlikely that SA will be able to provide the necessary funding through the fiscus. It will have to rely on increased access to local and international public and private finance.
Not only would such a plan direct billions of rand away from critical developments in the energy space, such as investment in upgrading the transmission grid, it would also continue to lock SA into a reliance on expensive coal-fired power when there are cheaper, renewable power alternatives available, and lock the country out of benefiting from the type of concessional finance that is available now for developed countries to invest in the decarbonisation of their economies.
Roughly $2.5bn of the $8.5bn will come from the multilateral climate finance institution Climate Investment Funds in the form of $500m in grant and concessional loan financing that will be leveraged to obtain a further $2bn in concessional loans. This funding is being made available through the CIF’s Clean Technology Fund and is specifically earmarked for investment in renewables.
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