Entrepreneurs to cash in on farewell to king coal?

The unthinkable is about to happen in Africa with the help of billions of dollars and entrepreneurs should be dancing in the streets in celebration – but will it be that simple? I fear not.

South Africa is to start the long, laborious, process of ridding itself of dirty coal – the filthiest fossil fuel on the planet.

For decades, Eskom – the national power generator – has generated most of the country’s power from huge, fume-belching, coal-fired power stations in the north of South Africa. The country is the world’s 12^th biggest emitter of climate warming gases. Eskom accounts for around 40% of South Africa’s emissions.

The plan is to spend $10 billion on creating 8,017 MW through largely solar, hydropower and gas so it can gradually wean the national grid – which has a generation capacity of around 32,000 MW- off coal.

The plan is being driven by new CEO Andre de Ruyter, the former Sasol head who was brought in to fix Eskom. He has suffered a bumpy start to the devil’s own job and was cleared of racism allegations in June; his job is to revive the fortunes of Eskom – once the pride of Africa’s power industry – that is staggering amid power cuts and corruption allegations.

This project is a sign that de Ruyter is making headway in rebooting the organisation. It is a job that has to be done, soon, because there is growing pressure from around the world for South Africa to cut down greenhouse gas.

But it all looks good in paper, but will the great switch from dirty coal to clean wind and sun may not be that simple.

If you gave me a dollar for every energy conference I have been to in Africa where I have heard the words: “We have plenty of sunshine and wind in Africa so it shouldn’t be a problem,” I would be a very rich man.

But it is a problem. Eskom says it will advance funding on a pay for performance basis. The money will be raised with a loan facility from development finance organizations.

There are plenty of renewable energy entrepreneurs around, but the question is how bold will they be and how trusting of the process?

The last time there was a major commissioning of wind and solar projects it took years of compliance and paperwork for the private power producers. It took more years for the South African governments to pay for the green energy it appeared to need so badly. To add insult to injury, there was even last-minute haggling over prices for the energy that had been agreed years before.

On top of all of this there was political mudslinging along the lines that the private power producers were trying to suck the South African government dry. Unbelievable.

The South African state – in the shape of Eskom – has to do a lot better job this time.