John Kane-Berman questions the wisdom of the deal signed between Cyril and the US, UK, EU, France and Germany
Has Cyril Ramaphosa sold out to the eco-colonialists and their eco-hypocrisy?
Three weeks ago this column suggested that rich countries would do a “decarbonisation” deal with South Africa and then pull that deal like a rabbit out of a hat at the COP26 climate conference now winding up in Glasgow.
The deal was announced last week by South Africa, along with the United States (US), the United Kingdom (UK), the European Union (EU), France, and Germany. South Africa will get an initial $8.5 billion over the next three to five years in grants and loans. According to the various governments’ joint declaration, this will encourage the “accelerated decarbonisation” of its electricity system and accelerate “the retirement of coal power”.
The declaration goes on at some length about the “ground-breaking international just energy transition partnership with South Africa”. There is talk of green industrialistion, green technology, green jobs, green hydrogen, electric vehicles, and deployment of “renewables”.
But the whole thing is really about getting rid of coal in pursuit of the prevailing global ideology of “net zero” and its accompanying “de-growth” agenda. Some of the signatories emphasised this point in statements issued on their behalf by the EU’s delegation in South Africa. Our coal plants would be closed “ahead of schedule”, explained Joe Biden, while Ursula von der Leyden, president of the European Commission, said it meant “speeding up the phasing out of coal”.
Having provided COP26 with something that can be depicted as a success while Greta Thunberg chanted obscenities outside about its failure, Cyril Ramaphosa is now the West’s toast of the town. He saved their face. It cost $8.5 billion in promises. That sounds like a lot, until one remembers that these faces don’t come cheap.
President Ramaphosa struck his deal to speed up the closing of coal-fired power stations in South Africa while some of the other signatories, including the US, are actually stepping up their consumption of coal. “Moving away from coal is essential,” declared Boris Johnson even as the UK has increased its coal consumption in response to energy shortages that have pushed up the price of power.
As for Germany, which the outgoing chancellor, Angela Merkel, sought to wean from both coal and nuclear power in favour of wind energy, that country has also ramped up its coal consumption. Comparing the first half of this year with the first half of last year, the contribution of wind power to the national grid dropped from 29% to 22%. The contribution of conventional energy sources rose, coal alone accounting for more than 27% of Germany’s electricity.
Commenting on the deal with Mr Ramaphosa, Ms Merkel said she was very pleased that her country was part of the important partnership with South Africa, and that “we can share our experience with a just transition”. What experience would that be? How to make your electricity among the most costly in Europe?
The stark contradiction between what Mr Ramaphosa’s fellow signatories want South Africa to do and what they themselves are doing is but one aspect of this deal.
Another is that Mr Ramaphosa signed the deal to speed up the closing of Eskom’s power stations at a time when South Africa is entering its fifteenth year of load shedding. This, according to Mike Schüssler, a well-known economist, has already caused the loss of more than a million jobs, while PwC, an accounting firm, says another 350 000 job losses are likely given the drop in economic growth that load shedding will continue to cause.
The Eskom monopoly is of course unreliable and the sooner it is broken up the better. But ageing and inefficient as so many of these coal-fired power stations undoubtedly are, they are just about all we have (apart from a bit of nuclear power and some hydro). They provide around 90% of the country’s electricity.
Closing them down to satisfy local green lobbies, international eco-fanatics, or foreign governments would be an act of economic self-destruction. It would make a desperate situation even worse.
Supposedly “renewable” energy in the form of wind turbines and solar panels is likely to be even more unreliable than Eskom. Close down the coal-fired stations while they still have life in them and we will hasten the day when we have no backup for when intermittent renewables fail because there is not enough wind or sunshine.
When Europeans run short of electricity, or when their renewables fail, they can import nuclear power or coal-generated electricity or even renewable energy or natural gas from their neighbours, including the Russians. We cannot.
What South Africa should be doing with coal is exactly the opposite of what Mr Ramaphosa has signed up to. We should auction off the Eskom power stations to the private sector, which would run them better than the once-proud Eskom now can.
We should encourage the construction of more coal-fired power stations and so make use of our huge reserves of coal. In addition, we should also open up more opportunities to exploit onshore and offshore natural gas, as well as to install more nuclear power.
All this should be done by the private sector, which must shoulder the risk and find the investment capital, tapping into private equity if necessary as politically correct bankers and listed companies blacklist fossil fuels.
Instead of accepting from the rich countries what amounts to a cheap bribe that will impoverish us, South Africa should be following the examples of China and India in pursing rapid rates of economic growth using cheap and reliable energy.
* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. Readers are invited to take a stand with the IRR by clicking here or sending an SMS with your name to 32823. Each SMS costs R1. Ts and Cs apply.