Eskom’s coal power stations can damage South Africa’s economy

South Africa’s reliance on coal-fired power could result in significant economic and job losses as more companies and countries want carbon-free imports.

According to Net Zero Tracker, South Africa should accelerate its shift away from coal power to remain competitive as an exporter.

It stated that more countries are implementing carbon border taxes and clean-energy industrial policies.

Considering that South Africa generates roughly 80% of its electricity through coal, it is vulnerable as companies move to decarbonise supply chains and countries penalise carbon-intensive imports.

“78% of South Africa’s exports, worth $135 billion (R2.4 trillion), are traded with 139 jurisdictions which have net-zero targets in place. Collectively, these exports support over 1.2 million domestic jobs,” Net Zero Tracker said.

It warned that failing to decarbonise supply chains could result in South Africa losing some of that trade and its associated jobs.

Net Zero Tracker said the difficulties are avoidable if the country accelerates phasing out coal and positioning itself as a “strategic supplier in low-emission value chains”.

“Unless South Africa aligns near-term energy and industrial choices with its long-term net-zero goal, it risks losing export markets, stalling investment, and deepening inequality,” said Net Zero Tracker project lead John Lang.

“South Africa has the tools to pivot — proven renewables potential, critical minerals, and seats at global tables.”

While the country has committed to shutting down a fair portion of its coal-fired power stations, an unstable power grid forced it to extend the retirement deadlines of at least three power stations in May 2024.

According to Eskom CEO Dan Marokane, shutting down the power plants prematurely would have left the national grid vulnerable.

Therefore, the power utility approved a plan to keep using at least three stations that were set for closure until 2030.

“We’ll continue some of our coal operations that were earmarked for shutting down,” said Marokane.

“We’ll review that process on shorter time intervals going to 2030, but we’ll place ourselves in a position where we are not made vulnerable by early shutting down of those stations.”

Emission relief for several coal power stations

In late March 2025, Environment Minister Dion George granted eight coal-fired Eskom power stations an extension to breach emission rules to help the power utility provide a stable electricity supply.

Lethabo, Kendal, Tutuka, Majuba, Matimba, and Medupi each received five-year extensions, while Eskom’s Duvha and Matla power stations will be allowed to breach emission rules until 2034.

Five other plants secured exemptions until June 2030.

However, the minister also issued a stern warning, saying South Africa must roll out renewable power plants “with urgency”, alongside other measures to accelerate its energy transition.

“I did not give them what they wanted,” he said, adding that Eskom had asked for longer extensions.

George added that he decided to extend the exemption for some Eskom power stations after considering the utility’s financial situation.

“We’re not out to squeeze Eskom to a point where they cannot operate,” he said. “It does put them under pressure. That’s the point.”

Responding to George’s announcement, Eskom said it would review his decision.

“Eskom is committed to working with the Department of Forestry, Fisheries, and the Environment and all stakeholders, and it will make further announcements in due course,” the power utility said.

“The company remains dedicated to aligning with regulatory requirements and implementing sustainable solutions to ensure long-term operational efficiency, reducing any negative impacts on health and environmental stewardship.”