There are three great signs of hope in the sometimes rather gloomy climate world that we are reporting on today: The Just Energy Transition Partnerships (JETP) between developed countries and South Africa; the hope for an end to the coal boom in India; and the idea of a climate-neutral European Football Championship in Germany. But alas, these signs of hope come with many uncertainties, as we have to report in this edition of the Climate.Table.
Because the South African government is considering extending the life span of its run-down coal-fired power plants in order to alleviate the electricity shortage. That would be the opposite of an energy transition. But developed countries like Germany cannot insist on rules that they themselves do not comply with – for example, by burning more coal and building LNG terminals due to the Ukraine war.
A classic dilemma is also present in India, as our colleague from New Delhi, Urmi Goswami, writes: On the one hand, decarbonization is official policy. On the other hand, the country is building dozens of new coal-fired power plants. And whether the European Football Championship in Germany will be climate-neutral, as the organizers claim, is also questionable, as a closer look by our colleagues Horand Knaup and Lukas Scheid proves.
Due to problems with energy supply, the South African government is debating whether to phase out coal energy later than initially planned. This would delay the implementation of the core goal of the Just Energy Transition Partnership (JETP) with donor countries from the developed states. This would stall a showcase project for the international energy transition involving climate aid of 8.5 billion dollars.
Last week, the government discussed its plans with the German JETP envoy Rainer Baake, who is coordinating with the International Partners Group (IPG): That is, the donor countries EU, Germany, France, the UK, and the US. The donor countries later expressed their sympathy that energy security is a priority in South Africa. It is important that “the JETP’s major goal of advancing South Africa’s efforts to meet climate targets and transition to a more sustainable economy is not jeopardized,” said a follow-up statement by the German Embassy in Pretoria.
The IPG remains “committed to this ambitious partnership with South Africa, in line with the terms of the joint declaration. This includes a commitment to achieve the most ambitious possible target in the scope of South Africa’s NDC climate plan.”
Also, according to a spokesperson of the German Federal Ministry for Economic Cooperation and Development (BMZ), “the IPG, with Germany as an active member, shows understanding for the current situation and sees the need for short-term measures to address the crisis. At the same time, a clear commitment by the South African government to long-term emission reduction strategies (such as the implementation of the JETP and national contributions) is and remains an important building block of our cooperation.” The donor countries are in agreement “that their financial support under the South African JETP will not be used to fund projects and measures for burning fossil fuels.” The best and most cost-effective way out of the power crisis is “the path taken with JETP to massively build renewable energy.”
An external expert’s “status report” is to examine the situation of South Africa’s coal-fired power plants by summer. It is also supposed to examine the financial burden on the national budget caused by the financial difficulties of the state-owned energy company Eskom.
The government in Pretoria is considering keeping some of the old coal-fired power plants running longer than planned to tackle power shortages and frequent blackouts in the country. Originally, 5 of 14 coal-fired power plants were supposed to be shut down by 2030. Now, Energy Minister Kgosientsho Ramokgopa is proposing to keep three units of the Camden power plant, totaling 420 megawatts, longer on the grid than planned. “As we speak, we are short of megawatts, and if you look at Camden, it is consistently within the top five performing power stations, so I don’t think that it helps us to decommission those high-performing units,” the Minister said. There had been an “open and frank” discussion about this with the International Partners Group (IPG), which signed the JETP with South Africa.
This partnership was announced at COP26 in Glasgow. It envisages South Africa decommissioning capacities of 22 gigawatts of its coal fleet, totaling 39 gigawatts, by 2035. The power plants are old and inefficient, and should be shut down anyway, as retrofitting them would be very costly. According to South African calculations, a total of 61.8 billion dollars will be needed between 2023 and 2027 to assist in the structural change, build up renewables alternatives, recapitalize the state-owned power company Eskom and restore the country’s power grid.
According to an internal South African government report, 18.8 billion of the total sum has been secured so far – just under 8 billion from Western donor countries, six billion from the South African budget, and 4.8 billion from international development banks. “The difference shows the size of the funding gap,” the report bluntly states: So far, 43 billion dollars are missing for the next five years. Private investments have not been taken into account so far. The first tranches of JETP aid have already been paid out. At the end of 2022, 300 million dollars came from Germany and France each.
According to JETP projections, the country’s carbon emissions should ideally be cut from 470 million tonnes annually to 350 million by 2030. By 2021, emissions have already dropped to 435 million tonnes – less because of climate policy, but simply because more and more coal-fired power plants have been taken off the grid due to inefficiencies and age.
South Africa is responsible for 40 percent of all African carbon emissions and, with 70 percent coal in its energy mix, has the most carbon-heavy economy of all major emitters. The country has great wind and solar energy potential, but problems with grid expansion and bureaucracy are holding back this development.
The JETP with South Africa is important for the developed countries because it is supposed to be a blueprint for aid in the energy transition in the Global South. In the meantime, JETPs with Indonesia (20 billion dollars) and Vietnam (15.5 billion dollars) have also been initiated. Senegal and India are also candidates. In addition, Western countries are greatly interested in improving ties with South Africa. They aim to diplomatically tie the geopolitically important country closer to the West against the backdrop of the Russian attack on Ukraine. The government has so far not condemned Russian aggression at the UN and invited Russian President Vladimir Putin to the BRICS summit in August – but apparently only via virtual attendance.
The energy supply situation in South Africa is dire: blackouts repeatedly paralyze parts of the industry and public life, resulting in billions in damages and reducing the country’s industrial production growth by two percent. The state-owned energy company Eskom is in serious payment difficulties, while reports of massive nepotism, political corruption and mafia-like structures are also mounting. In February, Eskom CEO André de Ruyter surprisingly resigned from his post after accusing high-ranking ANC party officials of illegally profiting from Eskom.
The JETP course is apparently also controversial in the government of South Africa: A faction around President Ramaphosa, who favors the project, is opposed by critics who want to hold on to the traditional coal economy and the associated privileges of trade unions and the ANC.
IPG representatives are also treading carefully in South Africa because they are familiar with similar plans for longer lifetimes of fossil-fuel power plants from their countries. Germany, for example, under pressure from Russia’s attack on Ukraine and efforts to break away from Russian gas, has also prioritized energy security and brought coal-fired power plants out of retirement.
The trend is similar for liquefied natural gas. While Germany is massively investing in new LNG terminals, South Africa is now also considering securing its supply with floating gas terminals amid the energy crisis.
The coal phase-out debate in India is gaining momentum. On the one hand, experts know that the world’s most populous country must phase out fossil fuels. But just how quickly this can be realized and which alternatives exist are the subject of fierce debate in government and administration. A government plan now holds out the prospect of ending the construction of new coal-fired power plants for the first time.
The National Electricity Policy, currently being finalized, underscores by prioritizing the decarbonization of the electricity system. And a new report from India’s central bank, the Reserve Bank of India, stresses that delayed climate policy actions could be costlier, in terms of larger output losses and higher inflation. The pace of transition, however, is challenged by practical considerations of economics and energy security.
“There is a clear desire to move out of coal. However, what remains uncertain are the cost and energy security implications of doing away with existing coal. This is where there are differences in opinion within the government, which is reflected in the choice of language in different policy documents. But there is no doubt about the recognition of climate change and its impacts and the need to move away from coal,” said Vaibhav Chaturvedi, senior researcher at the Delhi-based think tank, Centre for Energy, Environment and Water.
To overhaul the national electricity policy that sets a roadmap for legislation, the 2021 government set up an expert group led by Gireesh Pradhan, former chairman of the national regulator Central Electricity Regulatory Commission. The expert group submitted its recommendation in October 2021, ahead of COP26. It consists of four objectives:
The expert group determined that, despite the continued requirement of coal-based power for base load and balancing requirements, until commercially viable energy storage solutions became viable, no new coal-based capacity would be required. There was a caveat. A coal power plant could be built only as a replacement for old and retiring units, that too only when “convincingly established that it is not viable to meet the projected demand from alternate non-fossil sources”.
By contrast, the Central Electricity Authority (CEA) came to a different conclusion in its draft National Electricity Plan in September 2022, It projected that to meet growing demand, an additional 33 GW of coal-powered capacity would be required in 2022-27. Of this, 25 GW capacity is under construction. The draft plan identified 5 GW of coal capacity for retirement in this period. It projected an additional requirement of 9 GW of coal capacity between 2027 and 2032.
Subsequently, in January, faced with projections of another summer of extreme heat and impending demand surge, the government issued a moratorium on the retirement of all coal power plants till 2030.
Taking all into account, the ministry prepared a draft National Electricity Policy in January for wider consultation. The draft available to Table.Media retains the policy objectives of the expert group and prioritizes decarbonization, but is silent on new coal plants. Reports suggest that there could be some mention of a moratorium on coal plants in the policy. However, this moratorium would exclude projects that are in the “pipeline”.
Analysts point out that “pipeline projects” can include those under construction, those for which tenders have been floated, and even those that are in the planning stage. Going by the revised Report on Optimal Generation Capacity Mix 2030, the CEA projects an additional nearly 30 GW of coal capacity, currently planned or under construction.
New coal-fired power plants even though India wants to move away from coal? “This is a problem of the transition,” said a senior official. “The decline in price of batteries has not happened at the expected speed. When the sun is shining, solar power is a viable option, it costs a little over two cents per kilowatt-hour. But what happens at night? If we use coal as flexible power, for when there is no solar or wind, it is very expensive. At the current level of production, coal power costs around 1.9 cents/kWh. Using the same capacity to produce less power drives up costs to 2.5 cents/kWh or more. It will make electricity expensive across the country. It is an issue given large sections have only recently got access to electricity.”
In politics, decarbonization and the energy transition are considered political priorities: Measures such as the Renewable Purchase Obligation that require all distribution entities to buy or produce at least 43 percent of electricity by 2030, will drive down the share of coal. “The dilemma that India faces is that right now we do not have any non-fossil fuel strategies for round-the-clock electricity generation,” said an energy sector official. The Production Linked Incentive scheme for energy storage could help address this situation.
As the government grapples with this dilemma, the Reserve Bank highlighted the implications of delayed action on climate change in its recent report. It is estimated that India’s green financing requirement is at least 2.5 percent of GDP annually till 2030, this includes the equivalent of one trillion euros by 2030 to adapt to climate change.
The defense and technology group Rheinmetall has won a 770 million euro contract for the production of heat pump compressors. The company is thus investing in an important new business field and could simultaneously reduce the dependence of the European heat pump industry on international supply chains. The company has already been awarded the contract in late 2022 – but it only became recently known that the order is for heat pump compressors.
Rheinmetall’s investments are an “important decision“, Thomas Nowak, Secretary General of the European Heat Pump Association (EHPA) told Table.Media. There is a strong dependence on Asia for compressors, according to Nowak. Rheinmetall’s investment would give heat pump manufacturers another purchase option for key components and create “a sourcing point within Europe”, Nowak said. The creation of globally distributed production standard locations would be useful to make the heat pump ramp-up “resilient”, the expert said.
The compressors are often the most expensive component of heat pumps. They account for over a quarter of the costs and are responsible for compressing and heating the coolant.
The Rheinmetall example and the current dependence on imported compressors raise a fundamental question: Will China, with its advantages in the mass production of industrial goods, also force European manufacturers out of the booming heat pump market by offering low prices? Will the story of the solar manufacturing industry, which has practically completely migrated to China, repeat itself?
So far, experts do not see any clear indications of this. It is not certain that the People’s Republic will take over the next market for energy transition products. There are several reasons for this, which show some differences to the rise of the solar industry:
Overall, European manufacturers are heavily dependent on China and Asia for some components. “There can be shortages of certain products here,” says Jan Rosenow, European CEO of the think tank Regulatory Assistance Project. During the Covid pandemic, for example, microchips were in short supply, as were unremarkable goods such as the rubber feet that heat pumps stand on. The current dependence on Asia, however, mainly concerns compressors, says Nowak.
China is also one of the world’s most important manufacturers of heat pumps. It holds a market share of 40 percent of global production. European imports of Chinese heat pumps and components more than quadrupled between 2018 and 2022, from 327 million euros to 1.37 billion euros (both heat pumps and “reversible heat pumps”). According to the International Energy Agency (IEA), China is one of the few manufacturers with a “significant share” of heat pump exports. The European market is booming. By 2030, six million heat pumps are expected to be installed in Germany alone – an increase of 500,000 units per year. The heat pump industry is currently investing far too little in new production facilities to meet global demand, the IEA writes.
According to experts, China will not shake up the heat pump market in the near future. “I can hardly imagine a similar development of dependencies as in the solar industry,” says Jan Rosenow, for example. This has multiple reasons:
The German Soccer Association (DFB) is no stranger to sustainability. It already set a certain standard at the 2006 World Cup with its Green Goal environmental concept. Now, next year’s European Championship is even set to become a climate-neutral football event. There is now a dispute about how this goal will be achieved.
Specifically, the debate revolves around the emissions presumed to be caused by the fans traveling to the event (Scope 3 emissions) and how they are compensated. The issue is compensation payments, their amount and who pays for them because the cost of a ton of CO2 varies due to the different compensation options.
In spring 2022, the German Federal Ministry for the Environment commissioned the Öko-Institut to prepare a theoretical carbon footprint for the major sports event, the first in Germany since the 2006 World Cup. It also took into account the presumed emissions, possible measures and compensation.
A total of around 490,000 metric tons of CO2 equivalent are estimated for the tournament. At a price of 25 euros per ton of CO2, this would amount to more than twelve million euros, and at a price of 100 euros, it would be 49 million euros. Depending on the number of international fans, their mode of transportation, and also the participating teams, the amount to be offset would be lower or higher.
The different compensation costs per metric ton are due to the various methods of CO2 avoidance and the purchase of offset allowances. According to the German Federal Environment Agency, one ton of CO2 generates climate damages of around 200 euros, although CO2 allowances are significantly cheaper.
In addition, large-scale offsetting harbors the risk of greenwashing. For example, the 3.6 million metric tons of CO2 estimated by FIFA for the 2022 World Cup in Qatar – observers assume an even higher figure – were “offset” by buying emission allowances, some of which were dubious. Certificates from green power projects for less than ten euros per ton make up the bulk of the offsets made. Moreover, green power projects are now no longer considered high-quality offsets, as vast amounts of money are already flowing into the sector and only small amounts of CO2 are being avoided.
Investigations by the German broadcaster Bayrischer Rundfunk also revealed shady conflicts of interest surrounding the offsetting process. For example, Qatar founded its own organization, the Global Carbon Council (GCC), to purchase carbon offsets. Purchases were made for a wind farm project in Serbia, whose project developer is a member of the GCC steering committee. The expert who was responsible for auditing the project is also said to sit on the GCC committee.
The compensation for the European Championships in Germany – as was the case for the 2006 World Cup – is essentially to go hand in hand with sustainable projects, preferably in Germany. Among other things, climate-neutral sports venues, insulation, PV systems and EVs for Football clubs could be promoted. But their actual savings potential is often just as questionable or at least not yet foreseeable.
For example, the study authors at the Öko-Institut themselves say that “innovative measures” could be promoted that currently “still deliver small reduction contributions, but have a high potential for large reduction contributions in the future.” The quality of the offsets also varies. Meaning: Some allowance providers are not delivering what they promise. “There is a tendency for the quality of the allowances to increase with the price,” says the Öko-Institut. This also means that offsetting for a climate-neutral European Championship becomes more expensive the more seriously it is taken.
The biggest dispute is precisely about who will bear the costs. The UEFA could ask the national football clubs of the participating countries to cover their CO2 costs. This is what Fifa has already done for the World Cup in South Africa – with unknown success. Spectators could also be asked to pay for their emissions with a ticket surcharge. This would increase the ticket prices by three to twelve euros.
The DFB and UEFA could try to win “climate sponsors” who would each cover parts of the total cost. The emissions generated in Germany, around half of all emissions during the Championship, could be covered by the national climate protection fund. Money is still available there, but Germany’s Finance Minister will probably veto the idea.
The DFB and UEFA could also do their part to compensate. The German Ministry of the Interior calculates that UEFA earned more than one billion euros in television revenue across Europe during the European Championship two years ago. So 12 or even 49 million euros in compensation payments would be acceptable.
The Öko-Institut study not only took into account the modal split, overnight stays and travel routes of fans, but also the presumed emissions per passenger kilometer in the coach and per liter of beer. The experts based their calculations on around 2.8 million fans in the ten stadiums, almost a third of them from other countries. For the foreign fans alone, they estimated around 1.4 billion person-kilometers for travel to and from the stadiums and 1.8 million overnight stays. For the fan zones in Germany, 3.8 million visitors were estimated.
However, it is also clear that the majority of emissions are caused by fans traveling to and from stadiums. And fans who live outside Germany cause more than five times the emissions of national fans.
The authors also note, however, that some parameters harbor considerable uncertainties and could potentially change the emission volume significantly:
However, the study does not only analyze, it also has recommendations ready, including:
In the maelstrom of bad climate news, there are occasional glimmers of hope: Global per capita emissions have not increased since 2010, according to an analysis by the World Resources Institute. In fact, in many countries with the world’s largest greenhouse gas emitters, per capita emissions have actually decreased significantly since 1990, for example, in the US, the EU, Russia and Brazil. Some of the reasons are reduced coal usage and the expansion of renewables. In Russia, emissions fell due to the deindustrialization of the economy.
At the same time, per capita emissions increased in many emerging countries such as China, South Korea, India and Indonesia. The reasons are economic growth and more consumption due to greater prosperity. While China has long since overtaken the EU in terms of total annual emissions, the billion-strong empire has also been ahead of the EU in terms of per capita emissions for some years now.
The data also yield some surprises: Fiji’s per capita emissions are already negative, according to WRI. The land use and forestry sector stores more greenhouse gases than all other sectors generate. nib
On Tuesday, a broad majority of the European Parliament voted in favor of the compromise on the Methane Regulation negotiated by Jutta Paulus (Greens). After the summer break, the Parliament will enter the trilogue with the EU Commission and the Council of Ministers to agree on the regulation’s content. According to Paulus, the compromise text should be ready for negotiation by the end of the year.
The European Parliament’s text also includes gas, oil and coal imports – unlike the EU Commission’s proposal. The EU imports a large part of its fossil energy raw materials. During their production and transportation, leaks regularly occur, as well as planned methane leaks due to gas flaring or venting. According to an NGO Environmental Investigation Agency (EIA) report, fossil fuels imported to the EU were responsible for over eight million tons of methane emissions in 2020. The report says this is equivalent to 200 million tons of CO2 or the annual CO2 emissions of 54 coal-fired power plants. Over a period of 20 years, the greenhouse gas methane has an effect 80 times greater than carbon dioxide and is responsible for around one-third of global warming. The energy sector is responsible for 19 percent of methane emissions in the EU.
In addition, the Parliament’s proposal includes the following points:
Current figures from Turkmenistan show just how severe methane leaks are during the extraction and transport of natural gas. Using satellites, analysis firm Kayrros has detected methane leaks from the country’s largest gas fields. The two largest gas fields alone contribute as much to global warming as the UK in 2022, the Guardian reports. China is the largest importer of gas from Turkmenistan.
The country’s gas infrastructure dates back to Soviet times, which is the cause of frequent leaks. In addition, the deposits are so vast that the leaks do not cause any significant economic damage – so far, there are few incentives to fix them. Turkmenistan is not part of the Global Methane Pledge on reducing methane emissions, which more than 150 countries have now joined. According to the Guardian, the major state-owned oil and gas producers are not part of the voluntary UN Oil and Gas Methane Partnership 2.0 (OGMP2) initiative to prevent methane leaks. nib/cst
For Lars Loebner, a green space is not just a green space. “Rainwater from the roofs of surrounding buildings can also seep into a green space or a playground,” explains the department head at the Berlin Senate Department for Urban Development. To achieve this, of course, the area has to be planned accordingly. Together with his team of around 50 people, Loebner is developing new neighborhoods in the German capital. In the process, he is always thinking about the climate. “After all, we want to build sustainable neighborhoods that our grandchildren’s generation can still live in.”
There is no shortage of conflicting goals. “Wide roads aren’t particularly area-efficient, but that’s where the wind passes through pretty well,” Loebner says. On the other hand, trees could provide lower temperatures during the day on a grassy area. “In return, the ground there doesn’t get as cold at night either.” There is usually no perfect solution, and the 52-year-old is not a fan of black-and-white thinking. But he says it is clear that much still needs to happen to help cities cope better with heat or heavy rain.
Loebner was born in Berlin and grew up in the Mitte district and Leipzig. In East Germany, he completed an apprenticeship as a construction specialist and worked on construction sites for three years. “That was fascinating,” he recalls. “When you look around at the end of the day, you can see what you’ve been doing all day.” When the opportunity presented itself shortly after Germany’s reunification, he studied architecture at the Technical University of Berlin. After graduating, he worked for the German Agency for International Cooperation in the Ethiopian capital Addis Ababa, among other places.
“We planned large areas there, including large residential areas,” Loebner says about this time. He speaks enthusiastically about the cooperation with his colleagues there. The contact lasted for a long time. This was also because Addis Ababa became Leipzig’s partner city, where Loebner headed the public space design department from 2002. Ten years later, he moved to Halle, and since 2021 he has been back in Berlin. Since climate adaptation is a global challenge, cities worldwide can learn a lot from each other. A few months ago, he visited Amman in Jordan. There, too, the question was how best to build new urban districts.
“Amman is now about the size of Berlin, but already has more than four million inhabitants; the city is growing incredibly fast,” Loebner recounts his impressions. “The colleagues there have to be very efficient with the water available.” However, he says that he also regularly faces challenges when dealing with water in Germany – for example, allowing it to seep into low-lying green spaces: “In Berlin, we’re not allowed to simply lay a private water pipe under a public sidewalk.” When it comes to such details, you could either despair or look for a pragmatic solution. He prefers the latter. Paul Meerkamp
There are three great signs of hope in the sometimes rather gloomy climate world that we are reporting on today: The Just Energy Transition Partnerships (JETP) between developed countries and South Africa; the hope for an end to the coal boom in India; and the idea of a climate-neutral European Football Championship in Germany. But alas, these signs of hope come with many uncertainties, as we have to report in this edition of the Climate.Table.
Because the South African government is considering extending the life span of its run-down coal-fired power plants in order to alleviate the electricity shortage. That would be the opposite of an energy transition. But developed countries like Germany cannot insist on rules that they themselves do not comply with – for example, by burning more coal and building LNG terminals due to the Ukraine war.
A classic dilemma is also present in India, as our colleague from New Delhi, Urmi Goswami, writes: On the one hand, decarbonization is official policy. On the other hand, the country is building dozens of new coal-fired power plants. And whether the European Football Championship in Germany will be climate-neutral, as the organizers claim, is also questionable, as a closer look by our colleagues Horand Knaup and Lukas Scheid proves.
Due to problems with energy supply, the South African government is debating whether to phase out coal energy later than initially planned. This would delay the implementation of the core goal of the Just Energy Transition Partnership (JETP) with donor countries from the developed states. This would stall a showcase project for the international energy transition involving climate aid of 8.5 billion dollars.
Last week, the government discussed its plans with the German JETP envoy Rainer Baake, who is coordinating with the International Partners Group (IPG): That is, the donor countries EU, Germany, France, the UK, and the US. The donor countries later expressed their sympathy that energy security is a priority in South Africa. It is important that “the JETP’s major goal of advancing South Africa’s efforts to meet climate targets and transition to a more sustainable economy is not jeopardized,” said a follow-up statement by the German Embassy in Pretoria.
The IPG remains “committed to this ambitious partnership with South Africa, in line with the terms of the joint declaration. This includes a commitment to achieve the most ambitious possible target in the scope of South Africa’s NDC climate plan.”
Also, according to a spokesperson of the German Federal Ministry for Economic Cooperation and Development (BMZ), “the IPG, with Germany as an active member, shows understanding for the current situation and sees the need for short-term measures to address the crisis. At the same time, a clear commitment by the South African government to long-term emission reduction strategies (such as the implementation of the JETP and national contributions) is and remains an important building block of our cooperation.” The donor countries are in agreement “that their financial support under the South African JETP will not be used to fund projects and measures for burning fossil fuels.” The best and most cost-effective way out of the power crisis is “the path taken with JETP to massively build renewable energy.”
An external expert’s “status report” is to examine the situation of South Africa’s coal-fired power plants by summer. It is also supposed to examine the financial burden on the national budget caused by the financial difficulties of the state-owned energy company Eskom.
The government in Pretoria is considering keeping some of the old coal-fired power plants running longer than planned to tackle power shortages and frequent blackouts in the country. Originally, 5 of 14 coal-fired power plants were supposed to be shut down by 2030. Now, Energy Minister Kgosientsho Ramokgopa is proposing to keep three units of the Camden power plant, totaling 420 megawatts, longer on the grid than planned. “As we speak, we are short of megawatts, and if you look at Camden, it is consistently within the top five performing power stations, so I don’t think that it helps us to decommission those high-performing units,” the Minister said. There had been an “open and frank” discussion about this with the International Partners Group (IPG), which signed the JETP with South Africa.
This partnership was announced at COP26 in Glasgow. It envisages South Africa decommissioning capacities of 22 gigawatts of its coal fleet, totaling 39 gigawatts, by 2035. The power plants are old and inefficient, and should be shut down anyway, as retrofitting them would be very costly. According to South African calculations, a total of 61.8 billion dollars will be needed between 2023 and 2027 to assist in the structural change, build up renewables alternatives, recapitalize the state-owned power company Eskom and restore the country’s power grid.
According to an internal South African government report, 18.8 billion of the total sum has been secured so far – just under 8 billion from Western donor countries, six billion from the South African budget, and 4.8 billion from international development banks. “The difference shows the size of the funding gap,” the report bluntly states: So far, 43 billion dollars are missing for the next five years. Private investments have not been taken into account so far. The first tranches of JETP aid have already been paid out. At the end of 2022, 300 million dollars came from Germany and France each.
According to JETP projections, the country’s carbon emissions should ideally be cut from 470 million tonnes annually to 350 million by 2030. By 2021, emissions have already dropped to 435 million tonnes – less because of climate policy, but simply because more and more coal-fired power plants have been taken off the grid due to inefficiencies and age.
South Africa is responsible for 40 percent of all African carbon emissions and, with 70 percent coal in its energy mix, has the most carbon-heavy economy of all major emitters. The country has great wind and solar energy potential, but problems with grid expansion and bureaucracy are holding back this development.
The JETP with South Africa is important for the developed countries because it is supposed to be a blueprint for aid in the energy transition in the Global South. In the meantime, JETPs with Indonesia (20 billion dollars) and Vietnam (15.5 billion dollars) have also been initiated. Senegal and India are also candidates. In addition, Western countries are greatly interested in improving ties with South Africa. They aim to diplomatically tie the geopolitically important country closer to the West against the backdrop of the Russian attack on Ukraine. The government has so far not condemned Russian aggression at the UN and invited Russian President Vladimir Putin to the BRICS summit in August – but apparently only via virtual attendance.
The energy supply situation in South Africa is dire: blackouts repeatedly paralyze parts of the industry and public life, resulting in billions in damages and reducing the country’s industrial production growth by two percent. The state-owned energy company Eskom is in serious payment difficulties, while reports of massive nepotism, political corruption and mafia-like structures are also mounting. In February, Eskom CEO André de Ruyter surprisingly resigned from his post after accusing high-ranking ANC party officials of illegally profiting from Eskom.
The JETP course is apparently also controversial in the government of South Africa: A faction around President Ramaphosa, who favors the project, is opposed by critics who want to hold on to the traditional coal economy and the associated privileges of trade unions and the ANC.
IPG representatives are also treading carefully in South Africa because they are familiar with similar plans for longer lifetimes of fossil-fuel power plants from their countries. Germany, for example, under pressure from Russia’s attack on Ukraine and efforts to break away from Russian gas, has also prioritized energy security and brought coal-fired power plants out of retirement.
The trend is similar for liquefied natural gas. While Germany is massively investing in new LNG terminals, South Africa is now also considering securing its supply with floating gas terminals amid the energy crisis.
The coal phase-out debate in India is gaining momentum. On the one hand, experts know that the world’s most populous country must phase out fossil fuels. But just how quickly this can be realized and which alternatives exist are the subject of fierce debate in government and administration. A government plan now holds out the prospect of ending the construction of new coal-fired power plants for the first time.
The National Electricity Policy, currently being finalized, underscores by prioritizing the decarbonization of the electricity system. And a new report from India’s central bank, the Reserve Bank of India, stresses that delayed climate policy actions could be costlier, in terms of larger output losses and higher inflation. The pace of transition, however, is challenged by practical considerations of economics and energy security.
“There is a clear desire to move out of coal. However, what remains uncertain are the cost and energy security implications of doing away with existing coal. This is where there are differences in opinion within the government, which is reflected in the choice of language in different policy documents. But there is no doubt about the recognition of climate change and its impacts and the need to move away from coal,” said Vaibhav Chaturvedi, senior researcher at the Delhi-based think tank, Centre for Energy, Environment and Water.
To overhaul the national electricity policy that sets a roadmap for legislation, the 2021 government set up an expert group led by Gireesh Pradhan, former chairman of the national regulator Central Electricity Regulatory Commission. The expert group submitted its recommendation in October 2021, ahead of COP26. It consists of four objectives:
The expert group determined that, despite the continued requirement of coal-based power for base load and balancing requirements, until commercially viable energy storage solutions became viable, no new coal-based capacity would be required. There was a caveat. A coal power plant could be built only as a replacement for old and retiring units, that too only when “convincingly established that it is not viable to meet the projected demand from alternate non-fossil sources”.
By contrast, the Central Electricity Authority (CEA) came to a different conclusion in its draft National Electricity Plan in September 2022, It projected that to meet growing demand, an additional 33 GW of coal-powered capacity would be required in 2022-27. Of this, 25 GW capacity is under construction. The draft plan identified 5 GW of coal capacity for retirement in this period. It projected an additional requirement of 9 GW of coal capacity between 2027 and 2032.
Subsequently, in January, faced with projections of another summer of extreme heat and impending demand surge, the government issued a moratorium on the retirement of all coal power plants till 2030.
Taking all into account, the ministry prepared a draft National Electricity Policy in January for wider consultation. The draft available to Table.Media retains the policy objectives of the expert group and prioritizes decarbonization, but is silent on new coal plants. Reports suggest that there could be some mention of a moratorium on coal plants in the policy. However, this moratorium would exclude projects that are in the “pipeline”.
Analysts point out that “pipeline projects” can include those under construction, those for which tenders have been floated, and even those that are in the planning stage. Going by the revised Report on Optimal Generation Capacity Mix 2030, the CEA projects an additional nearly 30 GW of coal capacity, currently planned or under construction.
New coal-fired power plants even though India wants to move away from coal? “This is a problem of the transition,” said a senior official. “The decline in price of batteries has not happened at the expected speed. When the sun is shining, solar power is a viable option, it costs a little over two cents per kilowatt-hour. But what happens at night? If we use coal as flexible power, for when there is no solar or wind, it is very expensive. At the current level of production, coal power costs around 1.9 cents/kWh. Using the same capacity to produce less power drives up costs to 2.5 cents/kWh or more. It will make electricity expensive across the country. It is an issue given large sections have only recently got access to electricity.”
In politics, decarbonization and the energy transition are considered political priorities: Measures such as the Renewable Purchase Obligation that require all distribution entities to buy or produce at least 43 percent of electricity by 2030, will drive down the share of coal. “The dilemma that India faces is that right now we do not have any non-fossil fuel strategies for round-the-clock electricity generation,” said an energy sector official. The Production Linked Incentive scheme for energy storage could help address this situation.
As the government grapples with this dilemma, the Reserve Bank highlighted the implications of delayed action on climate change in its recent report. It is estimated that India’s green financing requirement is at least 2.5 percent of GDP annually till 2030, this includes the equivalent of one trillion euros by 2030 to adapt to climate change.
The defense and technology group Rheinmetall has won a 770 million euro contract for the production of heat pump compressors. The company is thus investing in an important new business field and could simultaneously reduce the dependence of the European heat pump industry on international supply chains. The company has already been awarded the contract in late 2022 – but it only became recently known that the order is for heat pump compressors.
Rheinmetall’s investments are an “important decision“, Thomas Nowak, Secretary General of the European Heat Pump Association (EHPA) told Table.Media. There is a strong dependence on Asia for compressors, according to Nowak. Rheinmetall’s investment would give heat pump manufacturers another purchase option for key components and create “a sourcing point within Europe”, Nowak said. The creation of globally distributed production standard locations would be useful to make the heat pump ramp-up “resilient”, the expert said.
The compressors are often the most expensive component of heat pumps. They account for over a quarter of the costs and are responsible for compressing and heating the coolant.
The Rheinmetall example and the current dependence on imported compressors raise a fundamental question: Will China, with its advantages in the mass production of industrial goods, also force European manufacturers out of the booming heat pump market by offering low prices? Will the story of the solar manufacturing industry, which has practically completely migrated to China, repeat itself?
So far, experts do not see any clear indications of this. It is not certain that the People’s Republic will take over the next market for energy transition products. There are several reasons for this, which show some differences to the rise of the solar industry:
Overall, European manufacturers are heavily dependent on China and Asia for some components. “There can be shortages of certain products here,” says Jan Rosenow, European CEO of the think tank Regulatory Assistance Project. During the Covid pandemic, for example, microchips were in short supply, as were unremarkable goods such as the rubber feet that heat pumps stand on. The current dependence on Asia, however, mainly concerns compressors, says Nowak.
China is also one of the world’s most important manufacturers of heat pumps. It holds a market share of 40 percent of global production. European imports of Chinese heat pumps and components more than quadrupled between 2018 and 2022, from 327 million euros to 1.37 billion euros (both heat pumps and “reversible heat pumps”). According to the International Energy Agency (IEA), China is one of the few manufacturers with a “significant share” of heat pump exports. The European market is booming. By 2030, six million heat pumps are expected to be installed in Germany alone – an increase of 500,000 units per year. The heat pump industry is currently investing far too little in new production facilities to meet global demand, the IEA writes.
According to experts, China will not shake up the heat pump market in the near future. “I can hardly imagine a similar development of dependencies as in the solar industry,” says Jan Rosenow, for example. This has multiple reasons:
The German Soccer Association (DFB) is no stranger to sustainability. It already set a certain standard at the 2006 World Cup with its Green Goal environmental concept. Now, next year’s European Championship is even set to become a climate-neutral football event. There is now a dispute about how this goal will be achieved.
Specifically, the debate revolves around the emissions presumed to be caused by the fans traveling to the event (Scope 3 emissions) and how they are compensated. The issue is compensation payments, their amount and who pays for them because the cost of a ton of CO2 varies due to the different compensation options.
In spring 2022, the German Federal Ministry for the Environment commissioned the Öko-Institut to prepare a theoretical carbon footprint for the major sports event, the first in Germany since the 2006 World Cup. It also took into account the presumed emissions, possible measures and compensation.
A total of around 490,000 metric tons of CO2 equivalent are estimated for the tournament. At a price of 25 euros per ton of CO2, this would amount to more than twelve million euros, and at a price of 100 euros, it would be 49 million euros. Depending on the number of international fans, their mode of transportation, and also the participating teams, the amount to be offset would be lower or higher.
The different compensation costs per metric ton are due to the various methods of CO2 avoidance and the purchase of offset allowances. According to the German Federal Environment Agency, one ton of CO2 generates climate damages of around 200 euros, although CO2 allowances are significantly cheaper.
In addition, large-scale offsetting harbors the risk of greenwashing. For example, the 3.6 million metric tons of CO2 estimated by FIFA for the 2022 World Cup in Qatar – observers assume an even higher figure – were “offset” by buying emission allowances, some of which were dubious. Certificates from green power projects for less than ten euros per ton make up the bulk of the offsets made. Moreover, green power projects are now no longer considered high-quality offsets, as vast amounts of money are already flowing into the sector and only small amounts of CO2 are being avoided.
Investigations by the German broadcaster Bayrischer Rundfunk also revealed shady conflicts of interest surrounding the offsetting process. For example, Qatar founded its own organization, the Global Carbon Council (GCC), to purchase carbon offsets. Purchases were made for a wind farm project in Serbia, whose project developer is a member of the GCC steering committee. The expert who was responsible for auditing the project is also said to sit on the GCC committee.
The compensation for the European Championships in Germany – as was the case for the 2006 World Cup – is essentially to go hand in hand with sustainable projects, preferably in Germany. Among other things, climate-neutral sports venues, insulation, PV systems and EVs for Football clubs could be promoted. But their actual savings potential is often just as questionable or at least not yet foreseeable.
For example, the study authors at the Öko-Institut themselves say that “innovative measures” could be promoted that currently “still deliver small reduction contributions, but have a high potential for large reduction contributions in the future.” The quality of the offsets also varies. Meaning: Some allowance providers are not delivering what they promise. “There is a tendency for the quality of the allowances to increase with the price,” says the Öko-Institut. This also means that offsetting for a climate-neutral European Championship becomes more expensive the more seriously it is taken.
The biggest dispute is precisely about who will bear the costs. The UEFA could ask the national football clubs of the participating countries to cover their CO2 costs. This is what Fifa has already done for the World Cup in South Africa – with unknown success. Spectators could also be asked to pay for their emissions with a ticket surcharge. This would increase the ticket prices by three to twelve euros.
The DFB and UEFA could try to win “climate sponsors” who would each cover parts of the total cost. The emissions generated in Germany, around half of all emissions during the Championship, could be covered by the national climate protection fund. Money is still available there, but Germany’s Finance Minister will probably veto the idea.
The DFB and UEFA could also do their part to compensate. The German Ministry of the Interior calculates that UEFA earned more than one billion euros in television revenue across Europe during the European Championship two years ago. So 12 or even 49 million euros in compensation payments would be acceptable.
The Öko-Institut study not only took into account the modal split, overnight stays and travel routes of fans, but also the presumed emissions per passenger kilometer in the coach and per liter of beer. The experts based their calculations on around 2.8 million fans in the ten stadiums, almost a third of them from other countries. For the foreign fans alone, they estimated around 1.4 billion person-kilometers for travel to and from the stadiums and 1.8 million overnight stays. For the fan zones in Germany, 3.8 million visitors were estimated.
However, it is also clear that the majority of emissions are caused by fans traveling to and from stadiums. And fans who live outside Germany cause more than five times the emissions of national fans.
The authors also note, however, that some parameters harbor considerable uncertainties and could potentially change the emission volume significantly:
However, the study does not only analyze, it also has recommendations ready, including:
In the maelstrom of bad climate news, there are occasional glimmers of hope: Global per capita emissions have not increased since 2010, according to an analysis by the World Resources Institute. In fact, in many countries with the world’s largest greenhouse gas emitters, per capita emissions have actually decreased significantly since 1990, for example, in the US, the EU, Russia and Brazil. Some of the reasons are reduced coal usage and the expansion of renewables. In Russia, emissions fell due to the deindustrialization of the economy.
At the same time, per capita emissions increased in many emerging countries such as China, South Korea, India and Indonesia. The reasons are economic growth and more consumption due to greater prosperity. While China has long since overtaken the EU in terms of total annual emissions, the billion-strong empire has also been ahead of the EU in terms of per capita emissions for some years now.
The data also yield some surprises: Fiji’s per capita emissions are already negative, according to WRI. The land use and forestry sector stores more greenhouse gases than all other sectors generate. nib
On Tuesday, a broad majority of the European Parliament voted in favor of the compromise on the Methane Regulation negotiated by Jutta Paulus (Greens). After the summer break, the Parliament will enter the trilogue with the EU Commission and the Council of Ministers to agree on the regulation’s content. According to Paulus, the compromise text should be ready for negotiation by the end of the year.
The European Parliament’s text also includes gas, oil and coal imports – unlike the EU Commission’s proposal. The EU imports a large part of its fossil energy raw materials. During their production and transportation, leaks regularly occur, as well as planned methane leaks due to gas flaring or venting. According to an NGO Environmental Investigation Agency (EIA) report, fossil fuels imported to the EU were responsible for over eight million tons of methane emissions in 2020. The report says this is equivalent to 200 million tons of CO2 or the annual CO2 emissions of 54 coal-fired power plants. Over a period of 20 years, the greenhouse gas methane has an effect 80 times greater than carbon dioxide and is responsible for around one-third of global warming. The energy sector is responsible for 19 percent of methane emissions in the EU.
In addition, the Parliament’s proposal includes the following points:
Current figures from Turkmenistan show just how severe methane leaks are during the extraction and transport of natural gas. Using satellites, analysis firm Kayrros has detected methane leaks from the country’s largest gas fields. The two largest gas fields alone contribute as much to global warming as the UK in 2022, the Guardian reports. China is the largest importer of gas from Turkmenistan.
The country’s gas infrastructure dates back to Soviet times, which is the cause of frequent leaks. In addition, the deposits are so vast that the leaks do not cause any significant economic damage – so far, there are few incentives to fix them. Turkmenistan is not part of the Global Methane Pledge on reducing methane emissions, which more than 150 countries have now joined. According to the Guardian, the major state-owned oil and gas producers are not part of the voluntary UN Oil and Gas Methane Partnership 2.0 (OGMP2) initiative to prevent methane leaks. nib/cst
For Lars Loebner, a green space is not just a green space. “Rainwater from the roofs of surrounding buildings can also seep into a green space or a playground,” explains the department head at the Berlin Senate Department for Urban Development. To achieve this, of course, the area has to be planned accordingly. Together with his team of around 50 people, Loebner is developing new neighborhoods in the German capital. In the process, he is always thinking about the climate. “After all, we want to build sustainable neighborhoods that our grandchildren’s generation can still live in.”
There is no shortage of conflicting goals. “Wide roads aren’t particularly area-efficient, but that’s where the wind passes through pretty well,” Loebner says. On the other hand, trees could provide lower temperatures during the day on a grassy area. “In return, the ground there doesn’t get as cold at night either.” There is usually no perfect solution, and the 52-year-old is not a fan of black-and-white thinking. But he says it is clear that much still needs to happen to help cities cope better with heat or heavy rain.
Loebner was born in Berlin and grew up in the Mitte district and Leipzig. In East Germany, he completed an apprenticeship as a construction specialist and worked on construction sites for three years. “That was fascinating,” he recalls. “When you look around at the end of the day, you can see what you’ve been doing all day.” When the opportunity presented itself shortly after Germany’s reunification, he studied architecture at the Technical University of Berlin. After graduating, he worked for the German Agency for International Cooperation in the Ethiopian capital Addis Ababa, among other places.
“We planned large areas there, including large residential areas,” Loebner says about this time. He speaks enthusiastically about the cooperation with his colleagues there. The contact lasted for a long time. This was also because Addis Ababa became Leipzig’s partner city, where Loebner headed the public space design department from 2002. Ten years later, he moved to Halle, and since 2021 he has been back in Berlin. Since climate adaptation is a global challenge, cities worldwide can learn a lot from each other. A few months ago, he visited Amman in Jordan. There, too, the question was how best to build new urban districts.
“Amman is now about the size of Berlin, but already has more than four million inhabitants; the city is growing incredibly fast,” Loebner recounts his impressions. “The colleagues there have to be very efficient with the water available.” However, he says that he also regularly faces challenges when dealing with water in Germany – for example, allowing it to seep into low-lying green spaces: “In Berlin, we’re not allowed to simply lay a private water pipe under a public sidewalk.” When it comes to such details, you could either despair or look for a pragmatic solution. He prefers the latter. Paul Meerkamp
