SA and China sign energy deal to help Eskom cut emissions

South Africa continues to be a benefactor of China’s largesse as the second largest economy in the world has agreed to assist South Africa to improve its ageing coal-fired electricity generation units and expand its transmission lines.

Minister of Electricity Kgosientsho Ramokgopa signed a joint memorandum of co-operation with eight Chinese entities yesterday as part of the country’s continued efforts to strengthen partnerships to advance energy security and energy transition.

The signing took place on the sidelines of the 15th BRICS Summit in Johannesburg. Eskom’s power generation from fossil fuels releases pollutant emissions that include sulphur dioxide, oxides of nitrogen, and particulate matter.

The requirements of the Minimum Emission Standards mean that Eskom has to reduce its greenhouse gas emissions and that means burning less coal, which could lead to a drop in generation capacity.

Ramokgopa said the eight companies had technology that could help Eskom to reduce emissions while improving performance at its coal-fired power plants.

“Part of the problem is that the emissions levels in some of the power stations, Kriel in particular and Kendal, they’re exceeding their licence parameters. So China sits with technologies on how fast you can resolve the emissions levels without threatening neighbouring communities and still ramp up the performance of the installed units.”

Ramokgopa also said that China would assist Eskom on the generation side. He said Eskom had only expanded its transmission network by 4 400km in the past 10 years and needed to install about 14 000km of new lines over the next decade.

The eight companies that signed the memorandum are the State Grid Corporation of China, China-Africa Development Fund, China Energy International Group, China General Nuclear Power Corporation, China National Electric Engineering Company, Huawei Technologies, TBEA Ltd, and the Global Energy Interconnection Development and Co-operation Organisation.

The signing of the memorandum with China came a day after he signed a Framework Agreement on Co-operation in Green Energy and an Exchange of Letters between South Africa and the People’s Republic of China on the donation of emergency power equipment.

China this week donated emergency power equipment worth R167 million and made available a grant of approximately R500m as development assistance to South Africa. Independent energy expert Lungile Mashele said the equipment and grants were welcome.

He said Eskom had recently bought a second-hand generator to bring Medupi Unit 4 back online in April 2024, which could alleviate almost one stage of load shedding.

Mashele said, however, that there should be transparency around which programmes all this money was targeting, because no one knew at this point whether these funds were flowing to Eskom, the National Treasury, consultants or other government agencies.

As a result, understanding what impact it would have on the energy crisis was hard to gauge.

“There are no free lunches. Similar to the R24m grant provided by the US, the basic premise is the same for the grant offered by China. You’ll use the donor country’s technical consultants for the development work with an almost certain caveat that you will have to use their engineers, equipment manufacturers and firms for implementation,” Mashele said.

“It’s a closed financial loop for their economies. We should also get increasingly concerned with all these energy sector agreements that are being signed and not made public.”