Climate Finance in South Africa: from coal-fired swords to a beacon of clean energy and green hydrogen after JETP signed in 2015

South Africa came into the JETP agreement with their plan for a just energy transition, which focused on three sectors: electricity, new energy vehicles, and green hydrogen. Just Energy Transition’s investment plan was developed late last year. Specifically, the plan centers on decommissioning coal plants, providing alternative employment for those working in coal mining, and accelerating the development of renewable energy and the green economy. It is a clearly defined but big task.

The picture for renewable energy is similarly mixed. The heat and transport sectors remain sluggish despite significant growth in wind and solar power to generate grid electricity. Renewable energy’s share of total global energy consumption was just 19.1% in 2020, according to the latest UN tracking report, but one-third of that came from burning resources such as wood.

There were 56 indicators assessed across the 17 goals. The international climate finance mechanism that would charge fees for carbon emissions would be used to improve the lives of people in poverty. A second focuses on promoting healthy diets — including reducing the consumption of meat, the production of which requires a lot of water, energy and land. It would help people on low incomes by lowering food and energy prices.

The biggest challenge lies in translating these models to the real world. To do so, we need leaders who are not bound by outmoded thinking, are aware of the latest science and can draw on the research to build public support for the necessary energy transition. We require more national and international public institutions that are willing to address problems at the system level. A science community thatchampions knowledge and evidence is required for the rest of this.

Now a different kind of activity is taking place on the site, transforming it into a beacon of clean energy: 150 MW of solar, 70 MW of wind, and 150 MW of storage batteries. The beating of coal-fired swords into sustainable plowshares has become the new narrative for the Mpumalanga province, home to most of South Africa’s coal-fired power stations, including Komati.

The partnership between South Africa, the European countries, and the US was forged at the COP26 climate summit in Glasgow, Scotland. They brokered a deal to give $8.5 billion in loans and grants, in order to speed up the transition to renewable energy in South Africa.

There’s significant enthusiasm for JETPs in the climate finance arena, particularly given the stagnancy of global climate finance in general. At COP15 in Copenhagen in 2009, developed countries signed up to a goal of mobilizing $100 billion of climate finance for developing countries per year by 2020. None have met that target, and the agreement lapses in 2025. The hope is that more funding for clear-cut strategies and commitments will lead to quicker moves toward renewables.

Since South Africa’s deal, Indonesia has signed agreements worth $20 billion, Vietnam one worth $15.5 billion, and Senegalese one worth $2.75 billion. Discussions are taking place for a possible agreement for India. Altogether, around $100 billion is on the table.