Coal at the Mafube open-cast coal mine, operated by Exxaro Resources. (Photo: Waldo Swiegers / Bloomberg via Getty Images) 
If you can’t beat them, join them.
That seems to be an emerging mantra of the coal sector.
Confronted with an existential crisis from the green energy transition, the industry is scrambling to play a role in the process.
This comes in many forms:
- Coal is required to keep the lights on as the renewable transition unfolds;
- Surging power demand to power data and AI cannot be met without coal; or
- Developing economies require coal generation to reach a level of development, from where they can afford to clean up their act.
Carbon capture and storage is another front where coal – a commodity that has been linked in scientific stone to rapid climate change – is trying to paint itself in a green sheen.
This was all grist to the mill on Wednesday at a Coal and Energy Transition Day conference in Houghton organised by Resources For Africa.
The combination of the two is revealing. Pure coal conferences are almost a fossilised relic of the past. But the coal sector is grafting itself on to the energy transition, which some might see as an attempt to ram a square peg into a round hole.
“The exponential rise in energy demand in the age of artificial intelligence: reintroducing coal as a sustainable resource” and “investors’ perspectives in funding coal and the energy transition” were among the topics discussed.
The portrayal of coal as a “sustainable resource” and panels discussing funding for both coal and the green or just energy transition demonstrate how the industry is tilting against the winds of change.
But the fact remains that – especially in South Africa’s case – coal-fired power generation is not a critically endangered species that is about to go the way of the dodo.
“We have seen quite a big shift in the energy transition narrative globally ... and the shift has been into implementation being very practical and very business-case driven. This opens a different conversation which allows coal to have a very relevant position especially in the South African context,” James Mackay, the CEO of the Energy Council of South Africa, said in an interview on the sidelines of the conference.
“How do we transition our system over time? Well, then coal must have a voice. Because if we remove coal from the equation, we will be in big trouble and go straight back into load shedding,” he said.
SA ‘cannot go green without it’
One way of looking at it is that South Africa can’t transition to renewables without investment and economic growth, and power is needed for both. So as the move to green energy unfolds, coal – which still accounts for more than 80% of South Africa’s electricity needs – will be needed to underpin this process.
Viewed through this prism, South Africa – because of the legacy of its apartheid-era addiction to coal-fired power – can’t go green without the dark stain of fossil fuel.
“There’s consensus emerging that in the future we need much greener energy. However, our past was based on coal, and we do not have much nuclear (power), we don’t have gas. So we are a coal energy-based economy that needs to move beyond that,” the conference chairman Bernard Swanepoel told me.
“At the same time, there’s energy scarcity. The stupidity of the conversations that I was hearing five years ago was that the coal mining companies fought hard to be relevant and the renewable conversation was that we could shut down coal and there will be space for us.”
The conversation has since changed.
“Now we are having the right conversation. The country needs more energy and whatever energy. So if you magically fund and build new coal power plants, we probably would, but that’s not going to happen as we have heard at this conference, there’s no funding for that,” Swanepoel said.
“So we have a coal base and we need to produce a lot more energy, and that will most likely be coming from renewables. For me, the conversation is real now. Let’s keep the lights on and create renewable capacity.”
Shamini Harrington, the senior executive for environment and health at the Minerals Council SA, noted that: “It’s not about choosing coal or renewables — it’s about managing both responsibly during the transition”
South Africa’s slow-growth economy, it must be said, is a major headwind to this transition. As more than one panellist noted, 1% growth is too slow a pace for that needed to bring renewables to the table – a vicious cycle.
Of course, coal also has its backers in the same way that turkeys don’t vote for Christmas.
“There are people with an economic interest to extend the life of coal,” said Brian Day, who until recently was the chairman of the South African Independent Power Producers Association.
But he also noted that “you need coal while you haven’t built enough renewables and the biggest impediment to that is building the grid. And frankly, Eskom’s done a shocking job ... If you could design and build a grid today, you would not need coal. But you can’t build the grid in one day.”
The bottom line is that coal will not be phased out at the rapid timescale that many greens would – for perfectly valid reasons – like to see.
But we need to reach the point sooner rather than later where we “need” coal to go green. The flames of our burning planet are sending up alarming smoke signals, and the blaze is spreading. DM