Relief for Eskom

South Africa has allowed eight coal-fired plants run by state-owned Eskom to breach emission rules in an attempt to help the cash-strapped utility focus resources on providing a steady electricity supply. 

The Lethabo, Kendal, Tutuka, Majuba, Matimba and Medupi plants were given five-year exemptions, while Duvha and Matla were granted extensions until 2034, Environment Minister Dion George said at a briefing in Cape Town on Monday.

Five other plants run by Eskom, the nation’s biggest emitter of greenhouse gases, secured exemptions until 2030 in June.

The most industrialised nation in Africa relies on coal for more than 80% of electricity generation.

The exemptions will help Eskom spend more on running its plants for longer in a country that’s suffered from rotational blackouts for decades.

Its plan to stabilise supply relies on extending the decommissioning dates of some coal stations.

South Africa must roll out renewable plants “with urgency” along with other measures to accelerate its energy transition, George said, adding that Eskom wanted longer extensions. “I did not give them what they wanted.”

Eskom’s plan to shift to cleaner sources of power has hit multiple delays, from grid constraints to court battles that slowed a program to build renewable plants. 

Electricity Minister Kgosientsho Ramokgopa this month warned that the system remained vulnerable because of delays in the procurement of more generation capacity.

The nation’s sole nuclear power station, once regarded as Eskom’s most-reliable plant, has been among the units that have broken down.

South Africa’s economy forfeited R481 billion in output last year due to the outages, down from as much as R2.9 trillion in 2023 when there were record blackouts, according to a Council for Scientific and Industrial Research report.

The health effects of running coal plants for longer could take a bigger toll than the economic constraints of loadshedding. 

Delays to the planned closures of coal-fired power plants alone could result in thousands of deaths from air pollution and lead to billions of dollars of health-related costs, the Helsinki-based Centre for Research on Energy and Clean Air said in a report last year.

The decision took Eskom’s financial situation into account, according to George.

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

In response to George’s statement, Eskom said it would now review the decision, which maintains its licence to operate the five power stations that contribute 29,000MW to the national grid.

“Eskom is committed to working with the DFFE 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.”

Reporting with Bloomberg