Eskom, which has focused almost exclusively on distributing coal-generated electricity, is looking to become an unlikely pioneer of agrivoltaic technology as it repurposes its decommissioned Komati power station.
South Africa, one of the world’s largest greenhouse gas emitters, secured funding to the tune of $497 million (about R9 billion) from the World Bank to finance the Komati power station’s transition to renewable energy.
Of this amount, $47.5 million is from the Canadian Clean Energy and Forest Climate Facility. This project aims to reduce greenhouse gases and create economic opportunities.
In its ambitious plan, Eskom said it wanted to grow crops under solar panels. The shade protects crops, meaning less water is needed, and boosts yields while producing energy.
Kenya uses agri-voltaic technology, but this will be a first for South Africa.
"In its simplest form, the plan is to build a renewable energy power plant at the site to facilitate the switch from coal-generated power to energy generated from renewables,“ explained energy expert Professor Mark Swilling.
Swilling expected the project to take at least two years to complete.
"A lot of work to clear the way has already been done,“ he said, adding that now that the finance had been secured, it should get off the ground.
The significance of the Komati project was in line with South Africa’s efforts to achieve energy security, and the project would contribute to reducing load shedding.
The repurposed Komati station is expected to generate about 500MW of energy and was part of plans to generate about 1800MW of renewable energy from Eskom’s old coal power stations.
Eskom CEO André de Ruyter told the Africa Energy conference in March that, to ensure security of supply, the country needed 30GW of new generation capacity, 70% of which would be renewables, by 2030.
"Significant transmission infrastructure upgrades are required in the short and medium term at a cost of R180 billion between now and 2031,“ he said.
De Ruyter also shared “innovative projects” that were on the cards, including rolling out mini grids.
One of the projects involved repurposing shipping containers with an inverter and battery as off-grid renewable power plants in line with the Just Energy Transition plan.
Regarding the World Bank loan, an economist from the North-West University Business School, Professor Raymond Parsons, said the cash injection should be welcomed.
“It is another key step towards securing the considerable necessary finance needed if SA is to steadily make a ‘just transition’ to a greener economy.”
The loan also comes amid concerns by African countries that rich nations were not honouring commitments they made at COP26 in 2021 to help emerging economies reduce dependency on fossil fuels.
South Africa is expected to share its Just Energy Transition Investment Plan at COP27 in Sharm El-Sheikh, Egypt, which starts today.
Economist Ulrich Joubert told Weekend Argus that the project was “much-needed”.
“At the end of the day, we do need to pay a lot of money back, but the loan is guaranteed by Treasury – it’s important to take that into account. We need to do away with coal,” he said.
Swilling said: "The World Bank loan will be paid back through the energy generated. It's a straightforward deal.“
The full plan for the Komati power station includes building a micro-grids manufacturing facility, implementing agri-voltaics, providing renewables skills training for employees and local residents, and redirecting the water the coal plant used to the community.
Eskom on Friday said the loan would be guaranteed by the National Treasury.
“This is a significant development for South Africa’s Just Energy Transition to renewable energy, as it brings the much-needed funding to enable Eskom to train its employees and members of the host communities to empower them to continue playing a central role in the provision of clean energy for the country,” said Mpho Makwana, the newly appointed chairperson of the Eskom board.
Former Eskom boss Matshela Koko believed the utility could not afford the loan, even though the government had promised to take up to two-thirds of Eskom’s R400 billion debt on to its books.
“Komati initiatives are not necessarily generating cash,” Koko told Weekend Argus.
“The revenue generated out of Komati initiatives will not be able to pay for this loan. I have a serious problem with that. Keep in mind that Eskom’s sales volumes are declining by 3% to 5% per annum.”
‘COP27 needs to address energy and climate crisis’
Meanwhile, civil society organisation The Green Connection believed that, without an integrated energy plan, the country’s climate commitments would be “nothing more than hot air”.
“While the National Energy Act was enacted by Parliament in 2008, section 6 (which addresses decarbonisation) had not yet been brought into operation, and to date we have no final integrated energy plan,” the organisation said.
African Development Bank Group’s acting chief economist and vice-president Kevin Urama called for more robust development and research on the impact of climate change in Africa.
Urama said Africa was home to most of the world’s green development minerals, including lithium, nickel, cobalt, manganese, rare earth, copper, and aluminium. These had the potential to position the continent as the leader in the emerging climate-resilient development markets.
"Continued investment in high-carbon energy sources presents significant asset-stranding risks, as technologies, policies and markets are increasingly shifting towards the green transition,” he said.
Weekend Argus