KEY POINTS



<ul><li>A document outlining the European Commission’s aims for the REPowerEU plan was published on Wednesday.</li><li>It highlighted the importance of energy savings, the diversification of energy imports and speeding up what it called “Europe’s clean energy transition.”</li><li>The EU’s desire to wean itself off Russian hydrocarbons means it will need to find oil and gas from other parts of the world to plug supply gaps.</li></ul>



The European Commission has fleshed out details of a plan to ramp up the EU’s renewable energy capacity and reduce its reliance on Russian fossil fuels, at the same time acknowledging that existing coal facilities may have to be used for “longer than initially expected.”



A document outlining the Commission’s aims for the REPowerEU plan was published on Wednesday, highlighting the importance of energy savings, the diversification of energy imports and speeding up what it called “Europe’s clean energy transition.”



In total, it envisages extra investment of 210 billion euros ($220.87 billion) between 2022 and 2027. When it comes to renewables’ share in the EU’s energy mix, the Commission has proposed that the current target of 40% by 2030 should be increased to 45%.



The Commission’s proposals came on the same day the governments of Denmark, Germany, the Netherlands and Belgium said they would aim for a combined target of at least 65 gigawatts of offshore wind capacity by 2030. By the middle of the century, they are aiming for 150 GW of capacity.



On the fossil fuel front, the situation is a challenging one. Russia was the biggest supplier of both petroleum oils and natural gas to the EU last year,&nbsp;<a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=EU_imports_of_energy_products_-_recent_developments#:~:text=Russia%20was%20the%20largest%20supplier,and%2C%20at%20some%20distance%20Algeria" target="_blank" rel="noreferrer noopener">according to Eurostat</a>.



The EU’s desire to wean itself off Russian hydrocarbons&nbsp;following the latter’s invasion of Ukraine&nbsp;means it will need to find oil and gas from other parts of the world to plug supply gaps.



The Commission said as much as 1.5 to 2 billion euros of investment would be needed to secure oil supply. To import enough liquefied natural gas and pipeline gas from other sources, an estimated 10 billion euros will be needed by 2030.



All the above comes at a time when the EU has said it wants to be carbon neutral by 2050. In the medium term, it wants net greenhouse gas emissions to be cut by at least 55% by 2030, which the EU calls its “Fit for 55” plan.



The Commission said REPowerEU could not work without what it called “a fast implementation of all Fit for 55 proposals and higher targets for renewables and energy efficiency.”



In this new reality, gas consumption in the EU would “reduce at a faster pace, limiting the role of gas as a transitional fuel,” the Commission said.



“However, shifting away from Russian fossil fuels will also require targeted investments for security of supply in gas infrastructure and very limited changes to oil infrastructure alongside large-scale investments in the electricity grid and an EU-wide hydrogen backbone,” it added.



“In parallel, some of the existing coal capacities might also be used longer than initially expected, with a role for nuclear power and domestic gas resources too,” the Commission said.



During a press conference on Wednesday the EU’s climate chief, Frans Timmermans, admitted that using less natural gas in a transitional phase would mean “you might use coal a bit longer — that has a negative impact on your emissions.”



“But if at the same time, as we propose, you rapidly speed up the introduction of renewables — solar, wind, biomethane — you then have the opposite movement,” he said.



Timmermans, who is the European Commission’s executive vice president for the European Green Deal, went on to stress the importance of finding a middle ground.



“If we can actually do what I say — reduce our energy consumption in combination with a speedier introduction of renewables — we will bring down our emissions even quicker than before,” he said.



“And then, of course we will have slightly higher emissions if people stick a bit longer to coal, but we need to strike the balance so that, on balance, we do not increase our emissions — we hopefully even decrease them more.”



Coal has a substantial effect on the environment, with Greenpeace describing it as “the dirtiest, most polluting way of producing energy.”



Elsewhere, the U.S. Energy Information Administration lists a range of emissions from coal combustion, including carbon dioxide, sulfur dioxide, particulates and nitrogen oxides.



The European Commission announcement drew criticism from a number of environmental organizations.



“These plans are supposed to fast-track the clean energy transition — but the European Commission’s latest strategy gives with one hand and takes with the other,” Eilidh Robb, an anti-fossil fuels campaigner at Friends of the Earth Europe, said.



“So-called REPowerEU contains useful and necessary strides towards renewable solutions but it simultaneously enables almost 50 fossil fuel infrastructure projects and expansions,” Robb said.

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Europe admits it’ll have to burn more coal as it tries to wean itself off Russian energy

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We all know how government’s Health department has arguably been the busiest during the pandemic, but another department that’s also been in trouble is Mineral resources and energy. Among other things, they’ve had to make sure that enough power is generated for Eskom to keep our lights on. Mineral Resources &amp; Energy Minister, Gwede Mantashe joins CNBC Africa to unpack South Africa’s energy plan.

Minister Gwede Mantashe on latest developments in South Africa’s energy sector

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In this year’s World Economic Forum Energy Report, it has been illustrated that there is positive direction in the global energy transition.

WEF_GOMEZ

WEF’s Gomez on the need make the energy transition process more resilient to disruptions

BOSTON (Reuters) &#8211; Top asset managers Vanguard Group Inc and BlackRock Inc&nbsp;<a href="https://www.reuters.com/companies/BLK.N">BLK.N</a>&nbsp;on Thursday introduced new exchange-traded funds that exclude oil companies, coal producers and other industries that a growing number of investors want to avoid.



The so-called ESG funds use environmental, social or governance criteria to pick investments.



“In our conversations clients continuously bring up the topic,” said Rich Powers, head of ETF product management for Vanguard, the largest mutual fund company with $6.6 trillion under management.



Researcher Morningstar Inc&nbsp;<a href="https://www.reuters.com/companies/MORN.O">MORN.O</a>&nbsp;found flows into such funds reached a record pace this year, taking in $20.9 billion through June, just shy of the annual record of $21.4 billion for all of 2019.



The demand partly reflects the performance of the funds, which has often topped traditional investment products this year. That was despite many funds being held back by strategies such as not owning high-performing energy stocks, as second-quarter results showed.



The Vanguard ESG U.S. Corporate Bond ETF&nbsp;<a href="https://www.reuters.com/companies/VCEB.O">VCEB.O</a>, the company&#8217;s first fixed income offering in the sector, will track the Bloomberg Barclays MSCI U.S. Corporate Select Index, which excludes oil and gas, alcohol and civilian firearms companies.







Previously the manager launched ESG equity products including the Vanguard ESG US Stock ETF,&nbsp;<a href="https://www.reuters.com/companies/ESGV.Z">ESGV.Z</a>&nbsp;now with about $2 billion in assets.



BlackRock, with $7 trillion in total assets, will offer three ESG stock funds that recreate exposure to S&amp;P indexes of large, mid-cap and small-cap companies.



The ETFs will screen out companies with certain levels of investment in the thermal coal, oil sands or shale energy sectors, BlackRock said.



Reporting by Ross Kerber; Editing by Richard Chang

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Vanguard, BlackRock add new climate-focused ETFs as demand soars

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As COVID-19 lock-down restrictions were imposed globally, daily global CO₂ emissions in early April 2020 were down 17 per cent compared to the emission levels in the prior year. A number of congested cities around the world are now seeing clearer skies and breathing fresher air. However, the Covid-19 lock-down is only a short-term solution to the social and economic changes that countries need to make to ensure the sustainability and the longevity of climate change actions. Rachael Antwi, Director at Nochua International joins CNBC Africa for more.

COVID-19: Does SA have a plan to wean itself off coal?

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Cecil Chikezie figured out a way to turn agricultural waste into sustainable sources of energy by carbonating the waste and turning it into briquettes that can burn longer and with less carbon footprint than coal. CNBC Africa spoke to Cecil for more.

Cecil Chikezie on entrepreneurship

Cecil Chikezie on entrepreneurship, turning agricultural waste into sustainable energy

JOHANNESBURG (Reuters) &#8211; South Africa&#8217;s mines and energy minister on Thursday said he was in talks with coal firms that supply struggling state-owned power utility Eskom to reduce coal prices in a bid to lower energy costs and boost the mining sector. 



Once the largest contributor to South Africa&#8217;s gross domestic product, mining has shrunk steadily over the last decade weighed down by higher energy costs and electricity cuts, hard-to-reach deposits, above inflation wage hikes and policy uncertainty which is deterring investment.



&#8220;These are discussions about how we reignite our economy and make it grow,&#8221; Mineral Resources and Energy Minister Gwede Mantashe said at an industry conference in Johannesburg without adding further detail. 



In March, energy regulator Nersa granted Eskom average tariff increases of 9.4%, 8.1% and 5.2% over the next three years.



The mining industry body, the Minerals Council, has said the tariff increase given to Eskom would jeopardise the viability of some marginal mines and accelerate job losses at energy-intensive operations.



Job cuts are politically sensitive in Africa&#8217;s most industrialised economy where a quarter of the labour force is unemployed, while power outages and steep price increases by Eskom are set to hurt an already fragile growth outlook.



Eskom owns and operates more than 13 coal-fired power stations and has supply agreements with firms including Exxaro Resources and South32 



The utility supplies more than 90% of the power in Africa&#8217;s most industrialised economy, but has been grappling with cashflow and high debt problems, breakdowns at its creaking coal-fired power station fleet.



The minister, who highlighted that power cuts and electricity prices remain a concern, said lowering energy costs would involve discussions with various groups in the sector including coal producers, renewable energy firms and the energy regulator. 



(Reporting by Tanisha Heiberg; editing by Emelia Sithole-Matarise)

What you need to know about S.African government’s talks with coal miners to cut prices for struggling power utility Eskom

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The United Nations (UN) cultural organization has officially called on the Kenyan Government to reassess the impact of the $2 billion coal power plant project on the heritage and natural environment of one of the oldest and best preserved Swahili settlements in the region. Samia Bwana, Board Member of deCOALonize joins CNBC Africa for more.

UN urges Kenya to reassess impact of Lamu coal plant

VICTORIA FALLS, Zimbabwe, May 18 (Reuters) &#8211; Zimbabwe needs up to $11 billion to modernise its mines and boost production to maximum capacity over the next five years, the head of the country’s Chamber of Mines said on Friday.
Foreign investor interest in the southern African nation is growing after the fall of longtime leader Robert Mugabe following a de facto military coup last November but projects are still constrained by lack of funding.
Batirai Manhando, Chamber of Mines president, said with the exception of platinum producers, all other mines, including those of gold, nickel, cobalt and coal were operating below their installed capacity.
Mining generates more than half of Zimbabwe’s export receipts — last year it earned $2.8 billion — but industry executives say it has the potential to earn more with increased investment.
“The local mining industry is currently operating below capacity on the back of capital shortages,” Manhando told an annual meeting of the mining chamber.
“At the beginning of the year the capital intensive industry required $7 billion for both ramp-up and sustenance capital. The figure has lately been revised upwards to $11 billion with renewed interest in our sector,” Manhando said.
Zimbabwe holds the second largest deposits of platinum and chrome after South Africa and has lately seen increased interest from lithium investors, who however say funding still remains a hurdle.
Manhando said mining companies in Zimbabwe faced problems that included high costs of electricity, labour and royalty fees when compared to other jurisdictions. There had also been little exploration in the country since 2000, he added.
Equipment at most mines was more than 50 years old, severely undermining efficiency and cost effectiveness of the sector, said Manhando.
Mines Minister Winston Chitando said the government would announce a new “mining vision” at the end of June and projected that the output of gold could rise to 85 tonnes in five years.
Output of gold, the biggest mineral by earnings, is expected to rise to 30 tonnes this year from 23 tonnes in 2017, according to Ministry of Mines data. (Reporting by MacDonald Dzirutwe Editing by Keith Weir)

Why Zimbabwe wants $11bn for its mines

Like many other men and women in Mozambique’s capital, Maputo, Agostinho feels optimistic about the future. After years of living in extreme poverty, he now has his own business and lives with his family in Zimpeto, a growing neighbourhood in the northern outer end of Maputo.
One of the things that has made the biggest difference to him and his family’s life has been improvements in the energy system. In Zimpeto his household is linked to the electricity grid. Agostinho buys electricity through a prepaid system called <a href="http://www.edm.co.mz/index.php?option=com_content&amp;view=article&amp;id=63&amp;Itemid=67&amp;lang=en">Credelec</a>. Thanks to Credelec Agostinho has <a href="http://onlinelibrary.wiley.com/doi/10.1111/1468-2427.12314/full">greater control</a> over his electricity spending but prices have gone up and he’s now paying more. Using electricity for cooking is too expensive.
Thus, the game changer in Agostinho’s life has been the arrival of gas. Until last year, the family relied entirely on charcoal for all their cooking needs, a <a href="https://extra.shu.ac.uk/ppp-online/wp-content/uploads/2014/12/communities-urban-energy-mozambique.pdf">common occurrence</a> in Maputo’s low income neighbourhoods. Last year he invested in a new gas cookstove and a gas cylinder. The convenience soon became apparent. The gas stove cooks faster, is cleaner and can be used inside the house. While the cookstove and gas cylinder cost a fair amount, this represents a significant advancement.
The benefits of gas improved further when in June this year <a href="https://noticias.mmo.co.mz/2017/06/preco-de-de-gas-domestico-reduz-em-mais-de-40.html">the price halved</a>. An 11kg bottle that used to cost US$13 (773 MZN) now costs US$7 (446 MZN), making it cheaper than charcoal. In a country where firewood and charcoal account for <a href="https://www.iea.org/statistics/statisticssearch/report/?country=Mozambique&amp;product=balances">77%</a> of the total energy balance, the transition to gas can make an enormous difference to the lives of the poorest people.
The drop in prices came just after Mozambique’s Minister of Mineral Resources and Energy, Leticia Klemens, and the Vice-President of Shell, Clare Harris, signed a <a href="http://clubofmozambique.com/news/mozambique-government-and-shell-enable-local-use-of-rovuma-basin-gas/">memorandum of understanding</a> for the domestic exploitation of Mozambique’s gas reserves in the Rovuma Basin. This is one of the <a href="http://www.facing-finance.org/en/database/cases/rovuma-basin-mozambique-gas-explorationrovuma-becken-mosambik-erkundung-von-gasfeldern/">largest</a> reserves of natural gas in southern Africa. The announcement of the agreement alone has been sufficient for the government to drop consumer prices.
The agreement follows a public tender to exploit gas reserves for domestic purposes. The government also awarded <a href="http://af.reuters.com/article/commoditiesNews/idAFJ8N1E702P">two other projects</a>. In the past, Mozambique’s energy policy focused on generating revenue <a href="http://www.sciencedirect.com/science/article/pii/S2214629616300354">through</a> exporting natural resources, such as hydropower and coal, at the expense of developing internal markets. If maintained, these projects will mark a significant departure from previous energy policies.
The one dark cloud hanging over this development is the <a href="https://www.theguardian.com/global-development/2017/jan/27/mozambique-fabulous-wealth-gas-reserves-pay-nurses-debt-crisis">country’s debt crisis</a>. Many expect that gas revenues will help palliate the consequences of this odious debt, but gas is still <a href="https://www.ft.com/content/be682056-5cc2-11e7-b553-e2df1b0c3220?mhq5j=e2">not flowing</a>. After last year’s scandal, the government is anxious to show that it’s able to mobilise the country’s natural gas reserves to benefit ordinary Mozambicans.
<h2>Difficult transition</h2>
The drop in gas prices was a key theme at a <a href="http://www.britac.ac.uk/sustainable-energy-access-mozambique-socio-political-factors-conflict-laden-urban-areas">workshop</a> with local leaders of some of the poorest neighbourhoods in Maputo.
“People are transitioning to gas”, explained one participant. This transition is clearly visible in Maputo. The charcoal-based urban landscape is disappearing. Gone are the days when there was a charcoal-selling point in every corner, although the charcoal depots remain strong in large markets. As deforestation advances, charcoal is produced farther and farther away, with most coming from the relatively unstable province of Gaza. Charcoal is now so expensive that gas has become a more affordable option for many people.
Yet, for now, charcoal continues to be the <a href="http://www.sciencedirect.com/science/article/pii/S0301421517300095">fuel of choice </a> for most households in Maputo. The transition to gas is, as yet, incomplete.
In their discussions, local leaders explained that gas is the new norm in cooking practices but most households have not yet adopted it. A heated discussion emerged about why people continue to use charcoal. Is it because gas cookstoves are too expensive? Is it because people prefer to cook with charcoal through habit? Or are they used to the taste of the meat cooked with charcoal? Perhaps people are unaware of the possibilities of gas and how to use it? Or maybe many families perceive gas to be unsafe?
One neighbourhood leader said:
<blockquote>We are just like this, it is difficult to change us!</blockquote>
He said this to justify the need for civic education. Yet, it’s not people who have to change. Rather, a range of institutional, infrastructural and socio-economic factors determine the possibilities for sustainable transitions to universal energy access. For example, in some neighbourhoods, accessing gas supplies is difficult whereas charcoal sellers will bring charcoal right to the door of households in portions small enough to be affordable on a day-to-day basis. Moreover, households may not provide a safe setting to install a gas cookstove, even when the family can afford it.
The transition to gas is not inevitable. As one of the community leaders in the workshop stated, “accessing energy is a process”. Gas may contribute to improve the lives of Maputo’s inhabitants. However, this depends on a gradual process of adjustment of local practices of energy use, changes in the built environment to fit gas technologies and the development of local energy markets to facilitate access to gas supplies.
*Names are pseudonyms

Maputo’s residents can now use gas. But dropping charcoal is proving hard

Kenyans pay high prices for electricity <a href="http://www.coastweek.com/3732-latest-news-Kenya-plans-to-axe-electricity-price-by-47-per-cent-in-three-years.htm">up to</a> USD$0.19/kWh for residential customers compared to about <a href="http://www.htxt.co.za/2016/04/01/here-is-how-much-youll-pay-for-electricity-from-today/">US$0.10 in South Africa</a> which is a barrier to the country’s sustainable economic development. The country is also expecting <a href="https://www.nema.go.ke/index.php?option=com_content&amp;view=article&amp;id=33&amp;Itemid=118">a steep rise in demand</a>.
To address this Kenya is modernising its electricity system and shifting away from costly diesel generators. Investments in new infrastructure are being made to <a href="https://www.nema.go.ke/index.php?option=com_content&amp;view=article&amp;id=33&amp;Itemid=118">lower</a> prices. New projects are moving forward such as <a href="http://www.renewableenergy.go.ke/index.php/content/28">geothermal</a>, <a href="https://www.esi-africa.com/news/kenya-to-build-gas-fired-power-station-in-mombasa/">natural gas</a>, wind – such as the <a href="http://ltwp.co.ke/">Lake Turkana Wind Farm</a>, and a solar photovoltaic (PV) <a href="http://cleanleap.com/kenya-build-east-central-africa%E2%80%99s-largest-solar-power-plant-garissa">project</a> in the northeastern city of Garissa.
But the most ambitious, and most controversial, is a coal-fired power plant <a href="http://www.sourcewatch.org/index.php/Lamu_Power_Project">proposed</a> for the seaside town of <a href="http://whc.unesco.org/en/list/1055">Lamu</a> – a Unesco World Heritage site.
Electricity from the Lamu project is <a href="http://www.engineeringnews.co.za/article/kenya-2016-08-05">expected</a> to have a much <a href="http://www.engineeringnews.co.za/article/kenya-2016-08-05/rep_id:4136">lower market price</a> than current prices, selling for about US$0.08/kWh. But this doesn’t include the costs of pollution, including greenhouse gases like carbon dioxide (CO2). When these are factored in, the full price of coal-fired electricity is much less attractive.
Also, although Kenya has recently identified domestic coal deposits, there is no infrastructure in place to deliver coal to the proposed facility at Lamu. The coal would be <a href="http://www.the-star.co.ke/news/2017/04/08/lamu-coal-plant-works-to-start-in-two-months_c1540169">imported from South Africa</a> until a 350km rail line is constructed from coal-producing Kitui County to Lamu.
The timeline for such a railway is uncertain and <a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/01Executive%20Summary.pdf">may take five to ten years</a> to build. The power plant will consume about <a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/01Executive%20Summary.pdf">3.6 million tonnes</a> of coal annually at an expected price of <a href="http://www.the-star.co.ke/news/2017/04/08/lamu-coal-plant-works-to-start-in-two-months_c1540169">US$50/ton</a>. The total cost of importing coal for this one facility, about $180 million each year. Kenya already has a significant trade deficit and, unless the Lamu plant significantly displaces diesel imports, coal imports could exacerbate it.
Social cost of carbon
<a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/Project%20Details.pdf">According to the project’s</a> environmental and social impact assessment, the Lamu facility will produce about 8.8 million megawatt-hours (MWh) of electricity each year. The assessment also states that each MWh of electricity from this type of plant results in one ton of carbon dioxide – making a total of 8.8 million tonnes of CO2 per year.
Environmental economists have estimated the economic value of the damage caused to human health and the environment from climate change – known as the “<a href="https://www.brookings.edu/testimonies/the-social-costs-of-carbon/">social cost of carbon</a>”.
Using the same methodology as these <a href="https://www.epa.gov/sites/production/files/2016-12/documents/social_cost_of_carbon_fact_sheet.pdf">calculations</a>, adding the social cost of carbon (USD$0.05/kWh in 2017 dollars) to the proposed coal plant’s market price (USD$0.08/kWh) results in a total cost of $0.13/kWh in coal-fired electricity production. The total cost to society of coal-fired electricity from the Lamu facility is therefore at least 40% higher than the market price which ignores the human health and environmental effects of pollution.
Lower cost options
That’s the bad news. The good news is there are lower cost options for Kenya to meet its electricity goals.
The price of renewable energy is now competitive with fossil fuels. Electricity from the <a href="http://cleanleap.com/kenya-build-east-central-africa%E2%80%99s-largest-solar-power-plant-garissa">50 MW solar PV project in Garissa</a> is priced at US$0.12/kWh. The feed-in tariff for geothermal projects is <a href="https://www.usaid.gov/sites/default/files/documents/1860/Kenya%20_IG_2015_05_03.pdf.">US$0.09/kWh</a> and the 310 MW <a href="http://ltwp.co.ke/lake-turkana-ready-to-inject-33-percent-of-the-agreed-power-into-the-national-grid/">Lake Turkana Wind project</a> is priced at just US$0.08/kWh – just a fraction of a cent above the price of coal-fired electricity and much less of the coal’s total cost when pollution is included.
These technologies are pollution-free and do not depend on fuel imports. Although wind and solar are intermittent resources and more difficult to integrate into the grid, geothermal provides baseload power – a more reliable energy source that isn’t affected by factors like weather conditions. Advances in energy storage are also making higher penetrations of solar and wind more feasible.
The outlook for solar PV is even more encouraging. In recent months, India has <a href="https://cleantechnica.com/2017/05/16/gujarat-cancellation-4-gw-power-plant-line-indias-goals-reduce-reliance-upon-coal/">cancelled</a> the construction of coal power projects – the equivalent of 14 Lamu projects – because the price of solar PV has dropped precipitously. The <a href="http://ieefa.org/ieefa-asia-indias-electricity-sector-transformation-happening-now/">most recent</a> in a string of record-breaking solar projects was a 500 MW priced at 2.44 rupees per kWh, or USD$0.038/kWh. That price is nearly half that of the Lamu coal plant ignoring the cost of pollution. It seems reasonable to expect declines in Kenya’s solar prices, even if less dramatic than those in India.
The combination of increasing global concern of climate change and the dropping costs of zero-carbon energy technologies presents a risk that the Lamu coal plant could become a stranded asset.
An OECD working paper <a href="https://www.oecd.org/sd-roundtable/papersandpublications/Divestment%20and%20Stranded%20Assets%20in%20the%20Low-carbon%20Economy%2032nd%20OECD%20RTSD.pdf">notes</a> that
energy-using equipment in electricity and other economic activities will have to be retired at an accelerated pace to make space for less carbon intensive technologies and practices. As climate policies drive this transition, some assets will become ‘stranded’ – ie. unable to recover their investment cost as intended, with a loss of value for investors.
The Lamu plant has a design life of <a href="https://www.nema.go.ke/images/Docs/EIA%20-%201270%20-%201279/EIA%201278%20Amu%20coal%20fired%20report/Project%20Details.pdf">at least</a> 30 years. There is a risk that the Lamu coal plant could become a financial liability sooner than 2050, perhaps much sooner.
Coal-fired electricity was the engine of economic growth in the 20th century, but for a variety of reasons, it’s unlikely to power the 21st. Kenya has abundant solar, geothermal, and other energy resources that, thanks to technological and financial innovations, are now cheaper than coal.
The climate change costs of coal will only increase in the coming years while innovation is driving the price of renewables down. Compared to coal, renewable energy sources such as solar, geothermal, and wind, have lower total costs, less long-term risk, and greater potential to power Kenya’s sustainable economic development.

Op-Ed: Why the Lamu coal plant doesn’t make sense. Kenya has better energy options

Miner Anglo American said on Monday it would sell its Eskom-tied domestic thermal coal operations in South Africa to a unit of Seriti Resources Holdings for 2.3 billion rand ($166.43 million).
The thermal coal operations that mainly supply coal to Eskom consist of the New Vaal, New Denmark and Kriel collieries, as well as four closed collieries , Anglo American said.
($1 = 13.8200 rand)
(Reporting by Rahul B in Bengaluru, editing by Louise Heavens)

Mining to be scaled down during South Africa’s 21-day lockdown

Anglo American to sell Eskom-tied coal operations in South Africa

A lot has changed in the world in the past year.  Not all of it good, particularly the growing threat of protectionism.  But one thing, which has not changed is the urgent need for low carbon energy for the world to have any chance at all of averting dangerous climate change and keeping the rise in average temperature &lt; 2C.  The electricity generation industry has to eliminate carbon emissions almost completely by 2040.
One more thing that hasn&#8217;t changed is that the only reliable source of low carbon base load electricity is still nuclear power.   Let&#8217;s be clear &#8211; renewables make a very important contribution.  Nobody welcomes the fall in the cost of solar, wind and other renewable energy more than me and my organisation NNWE.  Renewable energy complements nuclear but it cannot replace nuclear as a supplier of baseload electricity.
One day perhaps a form of flexible long-term low-cost electricity storage may become available but there&#8217;s no sign of it yet and it would be recklessly irresponsible for any country to make energy policy on the basis that it will happen soon.
So we come back to nuclear as an essential part of the energy mix that applies just as much here in SA as it does in UK, EU, US, China, Korea, Russia and dozens of other countries around the world which plan to keep nuclear in that mix.
<h3>Need to cut carbon emissions</h3>
		
				
		
My support for nuclear energy in the last 25 years has been closely linked to my firm conviction about the need to cut carbon emissions in order to address climate change.  But in the last few years, the need to phase out fossil fuels has become urgent for another reason.  That&#8217;s to address health concerns about air quality.  In some places this is now the biggest and most urgent driver of energy policy.
Last week I was in China where this overriding concern about air pollution has recently led to the closure of every single coal-fired power station in and around Beijing.  Here in SA air pollution doesn&#8217;t pose quite such a desperately urgent threat to human health. But even here thousands of avoidable premature deaths are caused by poor air quality.  So until we have an economically viable form of carbon capture and storage there cannot be any long-term role for coal, as many investors around the world have already concluded.
China is switching away from coal as fast as it can and it can only do so because alongside the world&#8217;s largest renewable energy investment programme, it also has the world&#8217;s largest domestic nuclear programme but coal consumption isn&#8217;t the only source of air pollution.
Vehicle emissions from cars and trucks are a substantial additional cause in every country, and particularly in every city in the world.  Many people have recently been taken by surprise by the speed of the fall in the cost of solar power.  I urge SA not to be caught by surprise by the speed of the switch away from petrol or diesel powered vehicles to electric ones.  A switch, which the residents of every major city will soon be clamouring for, for the sake of the children and grandchildren.  Of the millions of prosperous and influential middle-class citizens who see the life expectancy of the next generation threatened by a reduction, if immediate action isn&#8217;t taken to clean up the air they breathe.
<h3>Slower growth in electricity consumption by 2030</h3>
This new trend will be led by the great cities in Asia but I&#8217;m certain that just up the road from here the citizens of Johannesburg will be hot on their heels.  This new trend, currently still in an embryonic state is directly relevant to another part of the debate here in SA.  Much interest has been sparked by the recent downward revision in the predicted demand for electricity but I seriously doubt that the forecasts of slower growth in electricity consumption in 2030 take sufficient, or even any, account of the possibility of a big extra demand for power as vehicles switch away from petrol/diesel to electricity.
Last year I identified cost as the only significant barrier to the rapid expansion of nuclear power because nuclear is already proven to be a reliable, clean and secure energy source with a safety record that is among the best in the whole energy sector.
But while fossil fuel prices remain low and the cost of renewables is still falling the need for nuclear to demonstrate that it is cost competitive is as strong as ever.  The good news is that cheaper nuclear energy is quickly becoming available.
Within the next 12 months, the first of four new Korean nuclear reactors will start producing electricity in UAE at a price, which will be cost competitive with other forms of electricity generation.
Or consider the case of Rosatom, which is building more latest generation reactors globally than any other vendor.  Rosatom appears to have managed to make it to the stage where the learning curve and the economies of scale enable it to enjoy falling costs too.
As for China&#8217;s Hualong One reactor which in the UK has just started to go through the rigorous GDA process required by the UK ONR in preparation for being built at Bradwell in the UK.  Given the size of China&#8217;s domestic market, I wouldn&#8217;t bet against that design also generating cost competitive electricity before the end of the 2020s.
<h3>Nuclear opponents site high upfront costs</h3>
I&#8217;m aware that some of the strongest opponents of nuclear argue that SA can&#8217;t afford the big upfront costs.  I don&#8217;t believe that they have recognised the extent of the fall in the price of nuclear, which the offerings from each of these vendors may well provide for the benefit of SA consumers.  What&#8217;s more these offerings aren&#8217;t necessarily limited to the technologies available.  The accompanying financial packages are also important.
The terms of any loan for nuclear new build projects have a big impact on the eventual cost of the electricity generated.  So the question isn&#8217;t &#8220;Can SA afford to invest in nuclear?&#8221;.  It&#8217;s &#8220;Can SA afford not to invest in nuclear?&#8221;
This imminent prospect of affordable new nuclear power means that the time for decisions about South Africa&#8217;s energy infrastructure is now.  This economy, blessed with great natural resources and a talented workforce has not fulfilled the high hopes, which accompanied the arrival of democracy in the last few years of the last century.  Capital investment has recently lagged all the countries in the region apart from Zimbabwe.   And not surprisingly in the last five years SA&#8217;s GDP growth has been around half of its neighbours.
The Government&#8217;s National Development Plan has rightly recognised that investment in infrastructure is necessary to support development and should be prioritised.  Investment in nuclear will therefore not only guarantee a supply of secure reliable low carbon electricity, it will also give the economy a much-needed shot in the arm.
But to capture these benefits this decision must be taken very soon.  SA can&#8217;t afford to wait until 2037 for its first new nuclear units come online.  Since I spoke at Nuclear Africa last year the future of nuclear here seems to have taken two steps forward and one back.
<h3>Integrated Resource Plan for Electricity</h3>
At a difficult economic time, the Integrated Resource Plan for Electricity published last November effectively set back the wider adoption of new nuclear.  So I hope the Government will now consider the representations from across the energy sector urging revision of the Plan to prioritise development of new nuclear.
The deadline for submission of the new nuclear build programme means certainty is needed to facilitate investment and progress.  According to the conclusions of the report which NNWE commissioned from Trusted Sources, the multiplier effect of investment in nuclear would be 3.4 x the monetary value added would amount to US $77 billion.  That&#8217;s close to a quarter of SA&#8217;s current GDP. 
By contrast, much of the economic benefit of additional investment in renewable energy goes to other countries, mostly in Asia from where the bulk of the components have to be imported.
The consequence of delaying new nuclear build until the late 2030s means slower economic growth, fewer high quality jobs and a less reliable power supply.  Furthermore investment in new nuclear offers SA the chance to develop a local supply chain network which in due course will have potential export markets across Africa and further afield.
Skills development in the STEM subjects will grow to meet the demand triggered by the investment in energy infrastructure.  The opportunity, which this creates for a new generation of black industrialists who can participate in and lead the building of the power plants and the supply of goods and services to the nuclear industry, is substantial and attractive.
There are potential supply chain participants attending this event. I urge them to join me in proclaiming to the business world, to the trade unions, to the politicians the public value of nuclear to SA. This isn&#8217;t just about the profits of a few companies.  It&#8217;s about jobs, about growth, about health.  These voices need to be heard.  And heard now
Energy investment decisions cannot be short term.  The impact of how SA decides in 2017 to meet its future energy needs will be felt right through to the second half of this century.  The energy problems which Germany now faces after its mistaken decision to shut down its nuclear fleet in the wake of Fukushima are a testament to the dangers of becoming too reliant on energy sources which are beyond a country&#8217;s control.
The key to making the right choices for SA are to recognise that thinking of SA&#8217;s energy needs, only in terms of today&#8217;s demand, or even the next five years demand, would be to rob the country of the future it deserves.
Nuclear energy will provide SA with a low carbon base load power source at a predetermined cost that will help transform the entire country.  With countries like Nigeria, Kenya and Ghana moving ahead with nuclear ambitions and leading nations like UK, the US, France, China and Canada continuing with their nuclear energy programmes, it&#8217;s time for SA to follow suit or risk being left in the dark.
Speech delivered to Nuclear Africa 2017 Conference, South Africa by Tim Yeo, Chair: New Nuclear Watch Europe (NNWE)

Can SA afford NOT to invest in nuclear energy?

The Energy Centre of the CSIR has moved to provide updated and consistent information on the cost of new power from wind, solar PV, baseload coal IPP, baseload Eskom coal, and nuclear power generation technologies in South Africa.﻿
In a <a href="http://www.ee.co.za/wp-content/uploads/2016/10/New_Power_Generators_RSA-CSIR-14Oct2016.pdf">presentation dated 14 October 2016</a>, the head of CSIR’s Energy Centre, Dr. Tobias Bischof-Niemz, and Ruan Fourie, energy economist at CSIR’s Energy Centre, provide a comparative analysis for new power in South Africa based on recent coal IPP bid price announcements by Minister of Energy Tina Joemat-Pettersson on 10 October 2016, and other data.
<img decoding="async" loading="lazy" src="/media/19236460/chris-yelland-240x300.jpg" width="240" height="300" alt="Fig -1-620x 366"/>﻿
This study is seen as important for any review of the draft update to the Integrated Resource Plan for Electricity (Draft IRP) currently in progress by the Department of Energy (DoE).
The Draft IRP was to have been presented to the Cabinet last week, and thereafter made available to the public for comment, but this has since been delayed, with no further dates being given.
Since the previous due date of end March 2016, the request for proposals (RFP) for the proposed 9,6 GW new-nuclear build in South Africa has also been further delayed from the revised issue date of end September 2016.
However, it is known that in the meantime various stakeholder structures reporting to the Minister of Energy are currently reviewing the Draft IRP and its proposals for new renewable, baseload coal and nuclear power, and making further input and recommendations.
The CSIR study shows the significant reduction in the cost of energy from wind and solar PV generation technologies in South Africa since submission of bids for Window 1 of the renewable energy IPP programme  (REIPPP) on 4 November 2011, to those of the expedited round of Window 4 on 4 November 2015.﻿
<img decoding="async" loading="lazy" src="/media/19236467/fig-1-620x366_600x354.jpg" width="600" height="354" alt="Fig -1-620x 366"/>﻿
The result of this reduction is that new power from solar PV and wind today is at least 40% cheaper than that from new baseload coal today.
Recent bid prices for solar PV in Mexico at R0,49/kWh, Dubai at R0,42/kWh, Chile at R0,41/kWh and Abu Dhabi at R0,34/kWh (all based on US $1,00 = R14,00) have shown that this significantly reducing price trend is continuing still further globally.
The solar PV, wind and coal IPP tariffs presented by the CSIR for South Africa are fully comparable, because they are all based on long-term take-or-pay contracts with the same off-taker (Eskom). The tariffs have also been suitably adjusted for consistency.
In this regard, the price of R0,61/kWh for new wind and solar PV, and R1,03/kWh for new coal IPPs, reflects an adjustment of the bid prices to ensure a common base-date of April 2016, a consistent present-value-equivalent escalation index of CPI+1%-point, and exclusion of the carbon tax of R120/t of CO2 emitted from the coal IPP tariff.
The CSIR study also presents the latest updated levelised cost of electricity (LCOE) calculations for new Eskom baseload coal at R1,10 to R1,20/kWh, new baseload nuclear at R1,20 to R1,30/kWh, new mid-merit gas (CCGT) at R1,00 to R1,20/kWh, and new mid-merit coal at R1,50/kWh.﻿
<img decoding="async" loading="lazy" src="/media/19236474/fig-2-620x365_600x353.jpg" width="600" height="353" alt="Fig -2-620x 365"/>﻿
 
The CSIR study and presentation confirms <a href="http://www.ee.co.za/article/cost-electricity-new-nuclear-build-sa-various-assumptions.html">EE Publisher’s earlier LCOE calculations for the cost of for new nuclear power in South Africa</a>. The EE Publishers study calculated an LCOE of R1,30/kWh for nuclear power based on Rosatom VVER 1200 reactors, and provided a detailed sensitivity analysis for the various assumptions used.
The CSIR study and presentation of the LCOE for new Eskom baseload coal power is also in line with EE Publishers’ own <a href="http://www.ee.co.za/article/understanding-cost-electricity-medupi-kusile-ipps.html">LCOE calculation for Eskom’s new Medupi and Kusile baseload coal-fired power stations</a> of R1,05/kWh and R1,16/kWh respectively.
After first <a href="https://www.facebook.com/notes/chris-yelland/open-letter-to-eskom-regarding-lcoe-at-medupi-and-kusile/10154274940920449">rubbishing EE Publishers’ LCOE calculations for Medupi and Kusile</a>, citing its own calculation of R0,71/kWh and R0,82/kWh for Medupi and Kusile respectively, Eskom’s head of generation, Matshela Koko, subsequently undertook have Eskom’s and EE Publishers LCOE calculations independently reviewed.
However, after receiving EE Publishers’ detailed analysis of the <a href="https://www.facebook.com/notes/chris-yelland/comparison-eskom-and-ee-publishers-lcoe-calculation-methodology-and-assumptions/10154302909325449">differences between Eskom’s and EE Publishers’ methodology and assumptions</a>, Eskom has since reneged on this undertaking, and ignored all efforts to proceed with the independent review it had proposed.
Send your comments to <a href="mailto:energize@ee.co.za">energize@ee.co.za﻿</a>

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