SOUTH AFRICA

South Africa dominates coal power generation, representing nearly 80% of coal power capacity in all of Africa and the Middle East. The country is the most coal-reliant economy among the G20 and has the sixth largest coal fleet in the world for operational capacity. Its coal production and consumption are ranked seventh in the world as of 2021, with reported production at 258 million tonnes. More than a quarter of coal mined in South Africa is exported. Coal power generation has been declining since 2007, even despite capacity increases since 2015. Approximately 40% of South Africa's current coal power capacity is scheduled to close within the next decade, requiring immediate investments in energy generation to meet national power demand. In 2019, South Africa’s Integrated Resource Plan (IRP) laid out intentions to diversify the country's power mix by 2030. It outlined its goal to decommission over 35,000 MW of coal (of 42,000 MW assumed operating) by 2050. The plan would still allow the country to burn coal with no exit date yet agreed.

South Africa has pledged to be carbon-neutral by 2050. The challenge of decarbonizing the country’s coal-reliant energy system is made even more difficult by the reliability issues plaguing the grid, and the dire corruption, sabotage and financial situation of the state-owned utility Eskom. Amid skyrocketing blackouts in 2022, the South African government was considering delays in retiring some of its existing coal fleet. In an updated draft IRP released in January 2024, possible scenarios did include delayed closures of coal plants and up to 6,000 MW of “clean coal.” However, the pressures from environmental lobbying and recent litigation have set a precedent for future investments, requiring projects to complete climate impact assessments before receiving a license.

Under a draft Paris Agreement plan released in March 2021, South Africa planned to cut CO2 emissions by 28% compared with its 2015 pledge, which capped annual emissions at 614 million tonnes. In a September 2021 update to the plan, South Africa committed to peak its annual emissions at 398-510 million tonnes CO2-eq between 2021-2025, and lower them to 350-420 million tonnes CO2-eq from 2026-2030. Climate Action Tracker has deemed this target insufficient for meeting Paris climate goals.

South Africa’s Just Energy Transition Partnership, launched in November 2021 at COP26, represents an unprecedented opportunity to make progress and a potential model for other nations: an initial US$8.5 billion of international climate finance could support just transition interventions, power sector decarbonization, and economic diversification into future energy sectors, including electric vehicles and green hydrogen. The South African government approved the Just Energy Transition Investment Plan in November 2023.