15 May 2019

South Africa: Financing New Coal Is the Quick Road to Financial and Environmental Ruin

Photo: African Utilities Week
The 2019 African Utilities Week at the Cape Town International Convention Centre.

New investments in coal-fired power infrastructure will hinder efforts towards a progressive, just energy transition to renewable energy with potentially huge losses for South Africa's public finances. We have a window of opportunity to stop this environmental suicide.

On 1 July 2019, South Africans will be paying more for electricity when the recently approved 14% Eskom tariff hike by Nersa (the National Energy Regulator) is enforced. This hike is set to occur alongside rising food and fuel costs and will add financial pressure on South African households, hitting the poorest consumers the hardest.

Electricity from coal-fired power generation is becoming more expensive. Plans to add new coal-fired power capacity as illustrated in the draft Integrated Resource Plan (IRP) will lock South Africa into an expensive coal-dependent path at a time when the country needs to rapidly phase out coal-fired power infrastructure and urgently respond to the climate crisis.

A new report by the Climate Policy Initiative (CPI) estimates South Africa could face losses of up to R2-trillion between 2013 and 2035. This loss is as a result of transition risk which "is widely regarded as the risk that the value of assets and income are less than expected because of...

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