While any funding of South Africa’s embattled energy sector is welcome, South Africa should not “be pushed into a corner” on how this money should be spent, says South African National Energy Development Institute (SANEDI) CEO Dr Zwanani Titus Mathe.

“South Africa should not be dictated to on what technologies should be considered. Of course we should consider renewables…but the negative impact may be that we may be told to use this money only for solar or wind, and not for clean coal [projects].

“We should push back, if I may use that word. Yes, we need the money, but we should be able to consider all technologies. We should not be limited to only renewable energy.”

Speaking at African Energy Week 2023, held in Cape Town, Mathe reacted to a question on how the $8.5-billlion climate finance package, offered by a number of wealthy nations to help fund South Africa’s Just Energy Transition plan, should be distributed.

The multibillion-dollar deal will consist of a mix of loans, investments, risk-sharing instruments and grants.

The fear in the coal sector is that this funding will only support renewable energy, such as solar and wind projects.

Around 87% of South Africa’s electricity is produced by coal.

In Africa this number is 29%, with gas the primary energy source, at 39%, said Mathe.

Mathe added that funders should rather tie the money to an emissions target, such as reducing the country’s greenhouse gas emissions by 30% over the next ten years, for example, and “then we try and do that”.

“How we get there – we should be given options to do that.”

Eskom Primary Energy GM Dan Mashigo echoed Mathe as he noted that the capital injection should afford South Africa the opportunity to expand its energy base, but that “we should have the luxury to choose different technologies”.

He said the “modalities on how the funding should be dispersed have not been finalised yet. There is an argument from Eskom’s side to use it as an additive component on the energy base and not to substitute. You’ll substitute naturally as things progress.”

Mashigo added that the funding should not be used to accelerate the decommissioning of the current fleet of older coal-fired power stations while South Africa was sitting with an energy deficiency – “it can’t be just when you are sitting in the darkness.”

Globally, electricity generation from coal increased in 2022 by 1%, to capture a share of 35.4%, noted Mathe.

Renewable energy saw 15% growth.