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The Just Energy Transition In AfricaJust Energy Transition Partnerships (JETP) have been introduced in recent years to provide financial support to developing nations as they transition away from fossil fuels. In 2021, during the 26th UN Climate Change Conference of the Parties (COP26), South Africa became the first nation to sign such a deal. Senegal and the International Partners Group (IGP) signed a JETP in June 2023. The best way for Western countries, and the developed world at large, to help Africa transition from fossil fuels is through investment and collaboration, not patronization. This is precisely what the JETP programs seek to do, assist energy emerging economies that are dependent on coal to transition away from fossil fuels while leaving room to address the associated social consequences. That is investment, that is collaboration, and above all, it is respectful of the reality that Africa can move only on its own schedule in this matter. Arbitrarily forbidding us from using our natural resources will only do more harm than good. So far, South Africa and Senegal are the only African countries to have agreed to a JETP, with South Africa securing a deal for US$8.5 billion, while Senegal secured one for US$2.7 billion. How South Africa and Senegal intend to leverage these deals differ drastically, however, as do their power generation circumstances. Coal continues to dominate South Africa’s energy portfolio, at over 80% of the country’s power generation mix. Due to chronic load shedding and energy shortage issues, the country is now being pulled between two priorities, ensuring energy security and adhering to its decarbonization plans. General power outages have plagued the country since 2008 but intensified in recent years and effectively hamstrung South Africa’s economy, which has not surpassed even 1% gross domestic product (GDP) annual growth in the last decade. The country’s aging coal fleet faces significant maintenance issues which led to several of the country’s largest coal units being rendered inoperable in 2023. That year also saw the worst load shedding the country has faced yet, more than twice what it experienced in 2022, leading to energy shortages for 335 days out of the year. This load shedding led to a sharp increase in demand for solar panels and batteries, but Eskom (South Africa’s power utility) has had to prioritize energy security instead, prolonging its reliance on coal-fired plants and slowing down their decommissioning. To their credit, Eskom has made significant improvements to their coal plants’ maintenance and repair thanks to a recovery strategy launched in early 2023, and they have not suffered another load-shedding event since March 26, 2024. Nevertheless, the decision to prolong their reliance on coal is at odds with South Africa’s JETP. It has also directly led to the South African government seeking renegotiation of finance deals tied to its transition to cleaner energy sources, amounting to some US$2.6 billion of the originally agreed to US$8.5 billion. Above all, right now South Africa requires a solution that will ensure its energy security while also keeping the country on track with its JETP commitments, especially given its peak demand by 2030 is expected to reach 38 gigawatts (GW), a full 6 GW more than its current peak. And even though 13.6 GW of new power plants are expected to come online by 2027, with solar PV accounting for over half and onshore wind accounting for 25% of the new capacity, coal is still expected to meet two-thirds of daily demand. Battery storage assets awarded by South Africa’s Battery Energy Storage Independent Power Producers Procurement Programme (BESIPPP) will also contribute to this new capacity. Renewable-based generation in South Africa is also expected to grow from nearly 14.1% currently to nearly 29% by 2030. South Africa’s renewable energy growth is commendable, and Eskom’s decision to prioritize energy security via coal when an alternative solution wasn’t immediately available was understandable and pragmatic. But the country’s renewables are not advancing fast enough to cover for the aging of its coal fleet, and no amount of emergency maintenance campaigns can ensure that similar issues won’t lead to a load-shedding crisis again. If unaddressed, it will introduce the risk of shortfalls when the coal fleet is inevitably shut down at its end of life. Gas-to-power is thus the most prudent option for South Africa to prioritize while it continues working to expand its renewable power sources. The flexibility provided by gas-to-power will help meet demand once the coal fleet can no longer provide South Africa’s baseload power, leaving it with only its Koeberg nuclear power plant and currently limited solar and hydropower resources to fill in the gap. Not only is natural gas more cost-effective and efficient as a power source than coal, but it is also relatively cheap to retrofit a formerly coal-fired plant with gas turbines, allowing South Africa to both gradually phase out coal while saving money that would otherwise be spent building entirely new infrastructure. All of this will matter a great deal, as South Africa anticipates phasing out coal to require US$99 billion dollars between 2023 and 2027. So far, it has raised half between their JETP deal with the IGP, US$33 billion in private sector investments, and US$10 billion from the public sector. South Africa hopes to fill the gap through both domestic and international private entities in the form of grants, guarantees, and concessional loans. Senegal, meanwhile, looks to be having fewer troubles, being reliant on liquid fuel sources rather than coal. The US$2.7 billion raised through its JETP is expected to attract and mobilize further investments from both the private and public sectors, much the same as South Africa. Senegal, however, will also be receiving technical assistance from its international partners to boost the integration of its renewable energy infrastructure and technology, with a heavy focus on grid stabilization and battery storage. This aligns well with its electrification plans, which aim to achieve 40% of its installed capacity mix provided by renewables by 2030, up considerably from the current 22%. Senegal has also committed to developing an investment plan within 12 months to identify its needs, opportunities, and allocations to meet its targets. To that same end, Senegal plans to publish a revised nationally determined contribution (NDC) at COP30, set to take place in late 2025. The current NDC outlines an unconditional target of 235 MW of solar PV, 150 MW of onshore wind, and 314 MW of hydro by 2030. With international assistance, these targets are set to rise to 335 MW of solar PV, 250 MW of onshore wind, 50 MW of bioenergy and 50 MW of solar thermal. Overall, both South Africa and Senegal stand to benefit significantly from their JETPs, and this is a trend we hope to see continue in the future for African states. There are, of course, growing pains. JETPs are still a nascent program, and the first few deals were signed as political promises first and foremost before the full technical and coordination details could be fully worked out by all sides. The implementation process for South Africa and Senegal has thus been delayed while consultations and negotiations smooth over the logistical details. In addition, JETPs alone will be nowhere near enough to fully cover the financial burden of transitioning African countries away from fossil fuels, and acquiring the private financial investments to bridge the gap may prove difficult for many countries. This is why it is crucial for African states, and the world at large, to keep a close eye on how things develop in South Africa and Senegal, as their efforts to address these challenges will no doubt set the example for others. Want more stuff like this? Join over 65, 400 subscribers and receive our weekly eNewsletter! Please check your inbox or spam folder to confirm your subscription.

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Jan 15, 2025

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