SOUTH AFRICA – State-owned power utility Eskom has said it plans to reduce its output of coal-fired power by 8,000 to 12,000 MW through plant closures over the next decade, a cut that amounts to up to 30% of its current capacity.

The mothballed Komati power station, brought back to service in the early 2000s to help deal with chronic electricity shortages in Africa’s most advanced economy, will be completely closed by October 2022, Eskom said.

Eskom, which is Africa’s biggest greenhouse gas emitter, is pitching a US$10 billion plan to global lenders that would see it shut the vast majority of its coal-fired plants by 2050 and embrace renewable energy, a company official told Reuters in June.

A fleet of ageing coal-fired plants provides most of South Africa’s electricity needs, but a lack of investment and poor maintenance has led to regular blackouts that have scared investors and cost the economy billions of dollars in lost output.

Eskom currently has a nominal installed power capacity of about 42,000 MW.

“Eskom plans to repower Komati using solar photovoltaic (PV) plant supported by 244 MWh battery storage,” the firm said, adding that Komati was ideally positioned to be a flagship “Just Energy Transition” project.

Similar projects were planned at the Grootvlei, Hendrina and Camden power plants, all of which were scheduled for closure by 2025.

Eskom, which is heavily indebted, said it wanted to act as an anchor market for electric vehicles, which it sees as an important growth opportunity for its business.

Just a few weeks ago, Eskom said it is in discussions with various lenders and foreign governments to “confirm their interest and appetite” for cleaner energy projects.

The power utility responded to questions from Fin24 following a report by Bloomberg that it was seeking to raise R33.1 billion (US$2.23 billion) from five Development Finance Institutions (DFI).

“Eskom plans to repower Komati using solar photovoltaic (PV) plant supported by 244 MWh battery storage”


The funding would be used to help repurpose coal-fired power plants to become sites for renewable energy, Bloomberg reported.

Eskom told Fin24 its funding plan incorporates finance from both DFIs and multilateral banks and said its funding plans would also cover social elements of these clean energy projects, as part of its Just Energy Transition (JET) strategy.

In a presentation to the Presidential Climate Change Coordinating Commission (PCCCC), Eskom CEO André de Ruyter said the power utility is proposing a JET Financing Facility to speed up the transition from coal to other forms of electricity generation.

“We have not opted for making available a single large pot of money, but rather, in order to ensure that there is discipline and governance over the funding of such a facility, we have proposed a multi-tranche, multi-year facility to be funded by a multi-lender syndicate,” said De Ruyter. This syndicate would provide concessional funding for such JET projects on a “pay-for-performance” basis.

In other words, as new, low- or no-carbon capacity is added or as existing coal-fired capacity is retired, funding will be released. “There will be a link between decarbonization and the making available of funds,” he said.

De Ruyter said there had been good feedback on the financing facility from the World Bank as well as the US, UK, Germany and France.

The power utility said it is crucial that the transition is just and that it had conducted socio-economic impact studies.

De Ruyter previously said that the transition should not leave behind “ghost towns” as have been seen in Wales and England after shifts from coal.

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