Eskom CEO, André de Ruyter
On Wednesday, U.S President Joe Biden proclaimed that the United States and other G-7 countries will donate billions to get South Africa off coal and on renewables, to the chagrin of many on Twitter. The American leader wants coal-fired power plants replaced with renewable energy sources.
"Today’s announcement joined a portfolio of Partnership for Global Infrastructure Investment projects already underway in Africa," Biden declared at the "US- Africa Leadership Summit, "Including mobilizing $8 billion in public and private finance to help South Africa replace coal-fired power plants with renewable energy sources."
Biden also said the money would be spent helping "develop cutting-edge energy solutions like clean hydrogen, a deal worth $2 billion to build solar energy projects in Angola, $600 million high-speed communications cables that will connect Southeast Asia to Europe via Egypt and the Horn of Africa and help bring high-speed internet connectivity to countries all along the way."
South Africa's energy transition was accelerated at COP26 where world leaders adopted a "comprehensive climate strategy". In retrospect, at the time, this was seen as a forward-thinking initiative. In a three to five-year deal, South Africa would receive funding to decommission its coal mines and adopt renewable energy.
However, the situation has since become more complicated. Africa's third-largest economy is currently facing political upheaval, incessant price hikes compounded by almost day-long load-shedding.
On Wednesday, the chief executive of South Africa’s struggling state power monopoly resigned. South Africa is currently suffering its worst-ever blackouts, throwing into doubt efforts by President Cyril Ramaphosa to fix the collapsing energy supply. CEO, André de Ruyter tendered his resignation a week after a minister in the ruling African National Congress called on him to quit, the utility said in a statement.
However, De Ruyter will remain chief executive until the end of March “while we urgently embark on a search for his successor”, Mpho Makwana, Eskom’s chair, said.
South Africa has had twice as many rolling blackouts this year as in 2021 with power cuts of up to 10 hours a day as the dilapidated coal power plants have repeatedly broken down and newer replacements have malfunctioned. De Ruyter has steadily lost support in recent months amid a battle within the government over resources and support for renewables as an alternative to the coal that provides nearly all of South Africa’s electricity generation.
The indebted utility lacks funds for plant maintenance and ran out of money to replenish emergency diesel reserves weeks ago. This year Ramaphosa's government pledged to take over some of Eskom’s debt to relieve its financial burden, but relations with the utility have since frayed making Biden's measures wildly appealing. However, the decommissioning of these coal mines will have to follow the implementation of renewables. Not the other way around because currently South Africa, an energy exporter to Zimbabwe, needs more electricity, not less.
Equity Axis News
