Key findings

• Accelerated renewable energy (RE) deployment is critical
  To meet climate targets and improve air quality, South Africa should scale up renewable energy deployment to 6 GW per year. This approach is the most cost-effective and delivers:
  • Significant reductions in CO₂ emissions, with the potential for millions of tonnes of avoided emissions annually 
  • Improved air quality with significant reductions in SOx, NOx, and PM emissions  
  • Enhanced energy system resilience with improved energy access and a reduced need for load shedding
  • Installed capacity would have to make up 175 GW from 2021 to 2050 in the 2030 Closure scenario.
• Retrofitting is costly and inefficient
  Retrofitting CFPPs to meet MES is economically unviable, with estimated costs of ZAR 30–50 billion per plant. This option is more expensive and less effective than early retirement with a ramp up of the deployment of renewable energy.
• Complying with air quality standards is critical
  Full compliance with minimum emissions standards (MES) at all plants scheduled to operate beyond 2030 could prevent 2,300 deaths and economic costs of R43 billion/year, starting from 2025. That amounts to preventing 34,400 deaths and R620 bn in costs on a cumulative basis until the CFPP’s end-of-life. However, requiring the application of the best available control technology at all plants instead of the current MES would avoid 57,000 deaths from air pollution (95% confidence interval: 34,800 – 86,500) and economic costs of R1,000bn (USD 68.0 bn; 95% confidence interval: R610 – 1,500bn) compared to the Eskom plan by 2030. These costs will likely be borne by communities already marginalised and disadvantaged, perpetuating the cycle of poverty, inequality, and unemployment as people will not be able to work due to illness or premature deaths of breadwinners and heads of households.
• 2030 Closure scenario was the optimal scenario
  Decommissioning non-compliant CFPPs by 2030 and replacing them with renewables:
  • Has lower direct costs and risks than retrofitting
    • Retrofitting 8 power stations would cost about R300bn total
      • Each power station requires a refit cost of R30 – 50bn per station (R300bn total)
    • The 2025 deadline for complying with air quality standards is unachievable as it takes 7 – 10 years to build gas converter plants
    • Non-compliance risks withdrawal of Eskom’s operating license, DFFE not granting further legal indulgences, or not meeting specific loan agreement conditions.
    • Example from Eskom Sustainability Report: Tutuka power station (2023): The decision to retrofit requires funding of approximately R340 billion and would affect the operating licence of 16,000MW immediately and a further 10,000MW post-2025 leading to further load shedding
  • Avoids long-term lock-in of polluting infrastructure
  • Supports a faster transition to a low-carbon energy system
    • The ‘2030 Closure scenario shows a very high peak of wind, PV, and gas additions in 2031, which reach 8.4GW, 13.2 GW, and 19.6 GW respectively
    • The ‘2030 Retrofit’ scenario sees a more moderate peak of new build in 2031 (2.5, 6.5, and 7.7 GW of wind, PV, and gas respectively)
    • The ‘9Gt cap’ has the effect of reducing new-build gas and raising the build of wind and some PV – while still high (peak new wind reaches 9.2 GW in 2033), the overall rate of the new build is smoother than the above two cases.
• Just Transition costs must be weighed against inaction
  While transitioning away from coal requires upfront investment in social support, retraining, and economic diversification, the costs of inaction – including health impacts, environmental degradation, and stranded assets – are significantly higher