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Story Publication logo October 9, 2024

The Road to a Just Energy Transition

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Road to Transition Project Page
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There will be a shifting of power from parts of the country.

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Image provided by The Outlier. South Africa.

A road trip through five of South Africa's provinces, exploring the risks and opportunities of the transition to cleaner energy. To view the complete interactive report in The Outlier, click here.


As the world overhauls its energy systems to capitalise on new technologies and avert a climate catastrophe, South Africa is preparing to implement a plan that aims to ensure no communities or workers are left stranded.

The country’s just energy transition is being partly funded by a group of wealthy nations, who have pledged at least $11.7-billion (more than R200-billion) in the form of cheap loans, guarantees, commercial debt, and non-repayable grants.

Similar climate finance agreements are in the works in Indonesia, Vietnam, and Senegal. Like South Africa, these developing countries are heavily reliant on coal — the dirtiest fossil fuel — and oil, and need financial assistance to scale up their clean energy sectors and protect vulnerable communities at the same time.


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Why the just transition?

To limit climate change to relatively safe levels, by 2030 the world needs to reduce its greenhouse gas emissions so they are 45% lower than they were in 2010, and then reach net zero emissions by 2050, scientists say. This means we must quickly shift away from coal, oil and gas — a task that wealthy nations have agreed to take the lead on.

The pursuit of alternative energy sources has led to a dramatic decline in the cost of solar, wind and battery storage technologies. Solar, in particular, is now the cheapest source of electricity in history, according to the International Energy Agency (IEA).

This all means that the energy transition is both necessary for the stability of the climate, and inevitable due to favourable economics.

Many wealthy countries, and some in the Global South, are already relatively far along in their shifts to cleaner energy. For instance, Germany, the UK and the US state of California source more than half of their electricity from low-carbon sources, while renewables now meet virtually all of Uruguay’s power needs.

Some emerging markets, however, are falling behind, partly because they do not have the funding required to scale up their clean energy industries.

In this context, South Africa was an obvious candidate for a major climate finance deal.

Because coal accounts for more than 80% of the nation’s electricity mix – an unusually high proportion – the country ranks among the 15 largest emitters of greenhouse gases from fossil fuels.

At the same time, a large share of Eskom’s coal-fired power plants are scheduled for decommissioning over the next 10 years as they are due to reach their normal end of life.

So while the just energy transition plan doesn’t meaningfully accelerate coal plant closures, tens of thousands of workers across the value chain nevertheless face an uncertain future.

$11.7-billion has been pledged towards funding SA's energy transition

In 2021, at the UN climate conference in Glasgow (COP26), the International Partners Group (IPG), which comprises France, Germany, the UK, the US and the EU, plus Denmark and the Netherlands, announced a partnership with South Africa to help accelerate the decarbonisation of the economy. Financing of $8.97bn was pledged. It increased to $9.3bn in 2023 and a further $2.32bn was later pledged by Spain, Switzerland and Canada.

Almost half of the pledges are in the form of concessional loans.

Grants make up 7% ($820m) of the pledged funding. The presidency’s grant register breaks down $613m of that funding into 152 projects, of which 48 are completed and 87 are at the implementation phase.

Germany pledged $285m, about a third of the grant money, as of 30 June 2024. The grants are divided into six portfolios: Electricity, JT-Mpumalanga (JT is just transition), Green hydrogen, Municipalities, Skills, and New energy vehicles (NEVs).

The funds are divided as follows:

  • 28% for Electricity. This includes decommissioning coal power plants, transmission projects, localising the clean energy chain, distribution projects, batteries and renewable capacity projects.
  • 23% for Green hydrogen projects.
  • 24% for JT-Mpumalanga. This include skills development, diversifying local economies, as well as mine rehabilitation and coal plant repurposing.
  • 25% for Skills, New energy vehicles and Municipalities for planning, policy, training on the just transition process and technical assistance to revise tariff structures.

Progress on the strategy has been slow, despite the urgent need for new generating capacity.

This is partly because projects take time to materialize, and because of disagreements on the best way forward. Some senior politicians are skeptical about the need for a climate finance deal in the first place.

South Africa's latest draft energy plan proposes a less ambitious clean energy programme and instead calls for substantial investments in gas power, alongside the rehabilitation of ageing coal plants.

This is at odds with the cabinet-approved Just Energy Transition Investment Plan, which says South Africa should ramp up its investments in renewable energy while retraining workers in the coal sector who are at risk of losing their jobs.

If this plan takes precedence over the draft energy strategy, the country’s energy system will look vastly different in the decades ahead.

As envisaged, renewables would account for a little over 30% of the nation’s electricity mix by 2030 — behind the world average of just over 40%, according to the IEA’s projections. Towards the middle of the century, the electricity system will be increasingly dominated by renewables and storage.

Meanwhile, the country will have switched from an exporter of coal to an exporter of clean energy in the form of green hydrogen and its various derivatives. South Africa’s hydrogen will also be used to produce low-carbon steel and other industrial goods, which will be deployed at home or sold abroad.

The country will also be a key supplier of electric vehicles, which are expected to dominate the global automobile industry in the years ahead.

Towns that were once reliant on the coal sector will be clean energy, manufacturing and agricultural centres, and will finally breathe clean air.

This vision for the future, of course, remains subject to the policy direction that South Africa ultimately takes.


Read more


Writers: Nick Hedley, Shaun Smillie, Shoks Mzolo, Jeanne van der Merwe, Laura Grant

Researchers: Laura Grant, Gemma Ritchie, Gemma Gatticchi, Ro Manoim

Photographers: Barry Christianson, Paul Botes
Thanks to EIMS and Cape Town Solar for additional photographs

Editing: Laura Grant, Anne Taylor

Design & Programming: Alastair Otter, Ro Manoim

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