Eskom CEO André de Ruyter said that if South Africa clings to coal power generation, it will face the same kind of isolation and sanctions as during Apartheid, Netwerk24 reported.
Speaking at the Hendrik van der Bijl Memorial Lecture last week, De Ruyter reportedly said that ignoring the global shift to green energy will accelerate South Africa’s deindustrialisation.
De Ruyter said that, per capita, South Africa’s economy is 25% more carbon-intensive than China’s — and double the global average.
South Africa accounts for roughly half of all of Africa’s carbon emissions. Of that, Eskom accounts for 44%.
For this reason, South Africa can’t simply ignore its carbon footprint.
Besides, the world is now heavily penalising carbon emissions, said De Ruyter.
According to the report, De Ruyter said that aside from South Africa’s societal and moral responsibilities to transition to green power and a low carbon economy, it is not economically sustainable to not do it.
Like in the Apartheid era, South Africa will find itself economically punished if it refuses to move to greener forms of energy.
De Ruyter said it is becoming basically impossible to secure financing for new coal power plant projects.
Insurers also target large carbon emissions with penalties or simply refuse to provide cover because they aim to curb the main source of increased claims due to climate change.
De Ruyter argued that accelerated industrialisation is the only solution for South Africa’s poor economic growth and record-high unemployment.
If the country does not adapt and go green, it will not be able to trade with the world’s biggest markets due to the carbon penalties they will impose.
He said that if the European Union (EU) accepts a proposal to implement carbon export taxes by 2023, it will impose tariffs on carbon-intensive industries like steel.
Countries with lower environmental standards than the EU will then face carbon penalties on their goods.
De Ruyter noted that the South African automotive industry exports 64% of its vehicle production. Carbon penalties would hit such export-dependent industries hard.
The Eskom CEO’s remarks follow news of the utility’s plan to raise $10 billion (R152 billion) to shut off most of its coal-fired plants by 2050.
De Ruyter said that Eskom is proposing a multi-lender loan facility from development finance institutions that would be paid out in segments over several years.
Eskom’s plan to raise money to adapt or shutter its coal plants comes amid South Africa’s goal to reach net-zero emissions by 2050.
De Ruyter said that Eskom would retire 22,000 megawatt of its coal power plants over the next 14 years as they reach the end of their lifespan.
This represents around 45% of its total fleet.
De Ruyter said South Africa must transform the vicious circle of deindustrialisation and unemployment into a positive reinforcement loop that creates local investment opportunities and jobs.
“This is more than an opportunity — it is an economic, societal, and environmental imperative,” he said.