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For the first time, Australia’s electricity does not come predominantly from coal
For the first time, Australia’s National Energy Market (NEM) generated less than half of its electricity from coal for a week. In the seven days up to and including Monday, 49.2 percent of electricity generation came from coal-fired power. Around a quarter came from wind power, around a fifth from solar cells and around a twentieth from hydropower.
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This shows Daten der Open Platform for National Electricity Market Data (OpenNEM). In 2006, 87 percent of the electricity in the Australian NEM came from coal. The NEM is not quite as national as the name suggests, but still represents around 80 percent of electricity production. It includes all states except Western Australia, but not the territories and outlying areas. Of these, only the Capital Territory (ACT) is included in the NEM. Western Australia has been generating less than half of its electricity from coal since 2015, and so far this year it has only generated a third.
The continent’s rapid transition to wind and solar power is causing high volatility in the NEM, resulting in very high electricity prices and widespread blackouts. This has prompted investors to risk money in huge batteries; these can very quickly provide balancing power when the frequency in the power grid drops too much and a brownout threatens. The huge batteries have already paid off for electricity customers in Australia; whether the same is true for their shareholders remains to be seen.
South Africa needs coal-fired power plants longer
The news from South Africa is less good. The country will have to operate three coal-fired power plants that were scheduled to be shut down for a few years longer, at least until 2030, in order to ensure the stability of the electricity supply. In addition, the operating life of a nuclear reactor that began operation in 1984 was recently extended until 2044. Its neighboring reactor is due to be extended next year.
South Africa is the first country to be granted a Just Energy Transition Partnership to achieve a significant reduction in greenhouse gas emissions. About four-fifths of the electricity there comes from coal. In 2021, the European Union, Germany, France, the United Kingdom and the United States of America pledged their support. From 2023 to 2027, 8.5 billion US dollars are to be provided to accelerate South Africa’s decarbonization.
Not all in cash; a mixture of subsidies, low-interest loans and guarantees from the public sector, private loans and technical support is planned. 8.5 billion dollars sounds like a lot, but it is only about a twelfth of the planned investments. The amount has now risen to 9.3 billion dollars, half a billion of which comes from the World Bank. A low-interest loan of 2.6 billion dollars is intended to help with the phase-out of coal-fired power generation, with the express aim of helping the miners in the coal mines.
Energy crisis
Unfortunately, South Africa has been in a deep energy crisis for years. The state-owned electricity company Eskom is heavily indebted and is considered corrupt; conversely, the financially ailing municipalities owe Eskom billions. The development of renewable energy sources is proving difficult, not least because of the inadequate transmission network. At the same time, the electricity supply is anything but secure: last year there were power outages on 205 days, often for half a day.
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This year things are going better; in August Eskom celebrated 150 days without any planned power outages. However, the country is unable to shut down three coal-fired power plants within the planned timeframe, as promised in return for the billion-euro loan. The three power plants are to continue operating until 2030. In return, according to the plan, these and other coal-fired power plants will run at a lower average output, so that the emissions target can still be met.
Jennifer Morgan, State Secretary and Special Representative for International Climate Policy in the Federal Foreign Office of the Federal Republic of Germany, is currently in South Africa. She wants to find out from the country’s new government, which has been in office since July 1, what the new roadmap looks like exactly. This will determine whether and how the loan will be paid out.
Comprehensive accompanying measures with exemplary effect
The plans do not just include the development of low-emission electricity sources. The electricity grid should and must also be significantly expanded. Eskom is to be relieved of its debts and divided up: In the future, South Africa wants electricity generation, electricity transmission and distribution to households to be managed separately. Private power plants are also planned. In addition, electrification of road transport, green production of hydrogen and support for municipalities that currently depend on coal-fired power generation are part of the Just Energy Transition Implementation Plan 2023–2027.
The partnership between the EU and other institutions and South Africa is essentially a pilot project. Much depends on its success. After South Africa, Vietnam (15.5 billion dollars), Indonesia (20 billion dollars) and Senegal (2.5 billion dollars) have also committed to a Just Energy Transition Partnership.
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