The gleaming new chimneys and hulking generators of what will soon be the second-largest coal-fired power plant in the Southern Hemisphere are at the center of South Africa’s $20 billion, 50-year bet to fuel economic growth and lift its population out of poverty.
Now, South Africa and its Kusile Power Station have also become a test case for whether rich nations can help poorer ones transition away from the dirtiest fossil fuel.
At the international climate summit in Glasgow, meeting host U.K. has called on negotiators from nearly every country to “consign coal power to history” as part of a broader ambition to cut global greenhouse-gas emissions to net zero by 2050. That, climate scientists say, is indispensable for limiting the rise in global temperatures to 1.5 degrees Celsius compared with preindustrial levels and containing the most catastrophic effects of climate change.
Major economies, including the U.S., the European Union and most recently China, have banned state lenders from financing overseas coal projects. Multilateral development banks and commercial lenders are following suit, making it more difficult to find funding not only for new plants but also for maintaining existing ones. The U.S. and EU are also moving to impose tariffs on imports based on the carbon dioxide emitted during their production, a policy that will make goods from coal-dependent economies less competitive.
This pressure to end coal-powered electricity generation has fired tensions between developed nations, which industrialized thanks to the inexpensive and reliable energy source, and developing ones, which have poured hundreds of billions of dollars into new coal infrastructure. Global coal capacity, now responsible for close to 40% of electricity generation world-wide, has nearly doubled since the turn of the millennium, with much of the growth coming from emerging economies, including China, India, Indonesia and Vietnam.
At the nexus of this standoff are countries like South Africa, which gets more than 80% of its electricity and nearly one-fifth of its liquid fuel from coal and says it lacks the money to overhaul its power system while repairing its pandemic-ravaged economy.
One of the top-10 coal producers in the world, the country has spent the equivalent of 6% of its annual gross domestic product on two huge coal-fired power plants that will only become fully operational in the coming years. It is the most coal-dependent country in the Group of 20 major economies.