The Future of Coal in South Africa: An Interview with Mandy Rambharos
The coal-fired Athlone Power Station in Cape Town, South Africa was decommissioned in 2003 and demolished in 2010. Now, there are talks of reopening the site. Photo by Danie van der Merwe.
As the largest carbon emitter in the African continent, South Africa is in a unique position to lead the region’s formulation and implementation of long-term carbon policy. Recently, the country’s green energy efforts have attracted foreign investment through the Just Energy Transition Partnership (JETP), an international funding agreement aimed at phasing out coal in developing countries. To take a deeper dive into the complexities and challenges of reducing coal in South Africa, I spoke with Mandy Rambharos, the Vice President of Global Climate Cooperation at the Environmental Defense Fund. Ms. Rambharos previously worked at Eskom, South Africa’s largest electricity company, as General Manager for Just Energy Transition. In this role, Ms. Rambharos played an integral role during international climate negotiations for the South African delegation.
During our conversation, Rambharos and I touched on many key issues for South Africa, including ensuring job security, combating misinformation and coal industry lobbying against renewable energy developments, and coordinating government policies and sources of investment.
Photo courtesy of Mandy Rambharos.
As a spectator and instrumental player in the South African energy transition for the past few decades, how have you experienced just energy and environmental change in the past 15 years?
I think there has been quite a lot of positive change. Environmental activists and civil society have played quite a role in changing the landscape in the last 15 years. We have also seen a shift in business’s views on climate and the environment. Fifteen years ago, in the early 2000s, there was still a view that we had to push profit, and there was not much integration of environmental issues into the business mindset. As there was more pressure from civil society, communities, and shareholders, [climate change concerns] became more mainstream and a high priority on the business radar and the government’s radar.
How do you see the interaction of international involvement, through funds like the JETP, and bottom-up activism and public involvement in prioritizing climate considerations?
There are a number of factors that have been playing together. I think the role of rating agencies, funders, and financiers [put] pressure on banks. In terms of who you lend to, are you lending to companies that are irresponsible? This has had an impact on big businesses. Then who puts the pressure on the banks? It is activists, UN agencies, and various multilateral think tanks. Communities and NGOs have played a role in highlighting who financiers are supporting by pushing profits. These communities have been changing that mindset. But also, let’s be honest, what hits businesses and governments most is “what’s going to affect my economy? What’s going to touch my bottom line?” So when rating agencies, [if] banks and funders start saying they are not going to lend unless [these companies] change their [climate] practices, then it makes a huge difference.
Specifically in the context of South Africa, what do you think the greatest challenges are for implementing a framework for a just energy transition?
The coal industry in South Africa—and [in] many other developing countries—employs the most unskilled labor in the country. Historically, people who did not have any skills went to work in the mining industry. So as you transition, you are going to impact those jobs. And the question is where do you re-employ people that are unskilled? How many people, especially in the older age group, are willing to be retrained and upskilled to work in a different industry? I think job loss is the biggest concern for most people as they transition.
[It is also difficult to] change mindsets to say you can actually be employed in a different industry. As South Africa transitions to cleaner industry, then you build renewables and community-based projects that are opportunities for employment, but people cannot see that in front of them right now. The coal lobby is much better at communications than [those] advocating for a cleaner future because they really get to the heart of people [by targeting job security]. It is worrying and it is perfectly legitimate to worry about the short-term, putting food on the table, versus long-term visions where you can see a better, greener future.
Labor unions are also big challenges because they have a vested interest in the coal industry. So they oppose the transition quite a lot. I think they are realizing that they need to look at how to transition their thinking from just supporting people in the mining industry to looking at people in manufacturing, where new jobs will be created. Labor can also be part of the solution there. But I think it's not going to happen overnight.
Government rhetoric on the topic of just energy transition is commonly centered around energy security, especially with the current electricity blackouts. How do you see this balance between just energy and environmentalism, simultaneously with energy security and ensuring equal electricity access towards different, historically underrepresented regions?
So I think there’s a lot of misinformation and misunderstanding around the just energy transition. The very phrase “just energy transition” means that it is a transition over a period of time. Nobody is saying that coal-fired power stations have to shut down overnight. When I talk about energy security, energy access is extremely important. So any initiatives that we talk about to reduce emissions and to clean up the environment should not exacerbate energy poverty, and it should lead to energy access.
If you look at where the coal plants are in South Africa and where you can build renewables, it is not exactly in the same spot. You need to start building renewables long before you start talking about shutting down the coal plants so that there’s no gap. At the moment, we have a gap. And that is what causes difficulty with shifting mindsets that renewable energy is actually good for us. As you increase the share of renewables, then you can start shutting down your coal plants. They are not mutually exclusive and need to happen in parallel, not sequentially. So as you have the coal running, providing energy, start building more renewables. This adds more electricity to the grid to deal with shortages. As you increase the renewable capacity, you make the coal capacity more redundant.
On this point of closing down coal plants, Eskom is starting by shutting down the Komati Power Station. Why is Eskom shutting this one first?
The Komati plant was at the end of its life. There are articles talking about the misinformation around Komati. Some of the coal lobby was saying we could return Komati into service to help with the energy shortages. This actually is not true. Eight units of Komati were already shut down years ago… and only has a 100-megawatt unit–the last unit. It had reached the end of its life from a legal perspective, and from an environmental perspective; it could not operate anymore. So it had to be shut down.
Shifting gears to speak to your international and NGO experience, how do you see the role of international aid continuing in South Africa?
I think it is important to have various sources of financing. As long as the country is able to fund its own transition, I think that is quite important to put money into that. If I look at South Africa, Indonesia, and Vietnam, the private sector is really keen to fund but they need enabling policy and grid infrastructure. I think we need to get public financing into things like that—into building capacity in government to produce better policies and grid infrastructure.
When we did the Just Energy Transition Plan for South Africa, it was premised on the Paris Agreement to provide financing to developing countries to help with the transition. So there is a role for grant financing and there is a role for concessional financing. But we cannot rely on one or the other. One of the important lessons coming out of the JETP work was about the ideal financial structure. In South Africa, we have a bit of grant financing to do studies and environmental impact assessments. The JETP money should be used for public infrastructure, like transmission grids. Private equity will come in with generation build, [as the] private sector will be enabled to build generation plants [after the] transmission grids [are functional]. Other countries, like Senegal, might need support to build generation plants. You will not get as much private sector investment in some of the smaller countries as you do in South Africa. So there is definitely a role for different types of financing, [including] the public sector, private sector, and carbon markets.
You have just highlighted one of the key lessons from JETP in South Africa–financing structures and balancing funding sources. What are some additional lessons we can learn from JETP in South Africa? How generalizable are these lessons to other countries?
I think infrastructure governance, enabling policy, and financial structuring lessons are the broad lessons you can take away [from JETP in South Africa], but the details underneath will differ from country to country. If a country is setting up for a just energy transition plan, it makes sense to have a government body set up to drive implementation. And I think that will work in any country. What we are seeing is that because [South Africa] has various government departments that have a vested interest, they will push their agenda. Whereas if you had a government entity, most likely linked to the executive, they will take inputs from all the government departments and not be beholden to any one of them.
I also think everybody can learn from the stakeholder engagement process. When you talk to any one of these countries [involved in just energy transitions], it does not matter which region in the world they are, one of the most common things you hear is, “I wasn’t consulted.” Communities or NGOs feel like they were not sufficiently consulted in the development of the just transition plan. So for me, one of the biggest takeaways is to ensure that you have a proper consultation and engagement processes. You need to know who your audience is, because there are some people that will just oppose a just energy transition for the sake of opposing it. But you need to know who the genuine critics are to co-create a plan that works.
What is the relationship between public government interests and private funding for just energy transitions?
The idea is for these pockets to work together, but mostly, there is a lot of policy misalignment. And that is why I think it is important that you have this one body that pulls things together. We are starting to see that now happening in South Africa, which is a good thing.
But at a [certain] point, South Africa had an energy policy misaligned with environmental policy misaligned with industrial policy. It does not make sense when you are trying to pull towards a single goal. You have to have that vision. If your vision is a just energy transition—shutting down coal plants, building renewables—then all of your policies need to be aligned in that direction. And what we were finding when we were developing the just energy transition plan was that it wasn’t. Industrial policy, for example, was placing a premium on importing electric vehicle components. South Africa is a huge exporter of motor vehicles. Our biggest export market is the European Union, and with the European Union shifting to electric vehicles, we need to start shifting the production line to EVs. But because industrial policy included import taxes on components for electric vehicles, it made no sense from an economic perspective. Similarly, with the shift from coal towards renewables, energy policy was talking about building new coal plants. It sometimes feels like government departments develop policy in isolation.
To conclude, how would you place South Africa in global climate cooperation? What role do you think South Africa should play?
There are two roles. One is that South Africa is a big player in the African group. If you look at how the negotiations are organized, they are organized by country groupings, and South Africa plays a real leading role. I think they could continue to play a role in coalescing positions in the African group. From an African continent perspective, the whole continent is a low carbon emitter. But South Africa is also the biggest emitter in the group. So clearly, all the pressure is on South Africa to reduce emissions. It can coalesce positions around emissions reductions.
Secondly, when I was involved in the negotiations, South Africa played quite a bridge building role in understanding developing countries’ needs [in the climate discussion] with a lot of the developed countries in the EU and the US in particular. [Parts of South Africa] are very developed, and then we have such poverty. So, I think even within our own country, being able to try and see how we bridge these gaps [is a position that must be highlighted]. We can escalate that to the international level. In the last couple of years, we are leaning more towards the positions of China, India, and Brazil, which personally I am very uncomfortable with. Those countries are very different from us. And I think we need to keep pushing African views, which include more concern[s] around adaptation to climate change because Africa will be very impacted by climate change [despite] having very low emissions. I think South Africa has quite a role to play in building bridges and helping people on both sides of the table to understand the issues around climate change.
Ada Baser (GS ’24) is a staff writer for CPR studying political science. Her main interests include U.S.-Middle Eastern relations, water governance, green energy policy, and transitional justice.