Investment into renewable energy is overtaking that of coal in Botswana, delegates at the recent Botswana Resource Sector Conference heard. According to Jonathan Berman, MD of Fieldstone Africa, the energy industry is moving away from the large centralised traditional coal and hydropower utility model of the past 100 years towards renewables, with investment taking place very fast in the last few years.

Coal power on its way outThis opinion was refuted by chairperson of Shumba Energy, Alan Clegg. He told attendees at the conference that renewable energy was a developed country pursuit, which did not fulfil the developmental and employment needs of Africa.

Clegg’s statement, however, is contested by the fact that more than $50 million has been invested into renewables in sub-Saharan Africa this year alone. Despite this, South Africa continues to endow coal-focused energy projects, with critics calling for more discerning investment.

Tracey Davies, head of the Centre for Environmental Rights’ (CER) corporate accountability programme, recently stated that Nedbank, Standard Bank, ABSA and Rand Merchant Bank (RMB) appear to have no problem funding new projects that will fuel climate change, despite public commitments and the fact that climate change will place these very projects at risk. These banks are contributors to the independent Thabametsi coal-fired power station near Lephalale in Limpopo.

The power station is scheduled to be commissioned in 2021 and will have a lifespan of 40 years. This, says Davies, makes it an “inconsiderate” investment, as climate change laws increasingly play a role in undermining the use of coal power.

Fieldstone’s Berman says that it has become increasingly hard to raise finance for coal projects. The company, which is involved in the Thabametsi project, has seen an “explosion of new investment” in independent power producer projects across all technologies in the region, he says.

Clegg, however, believes that while there is a place for renewables, they are not the future. Nuclear power will follow coal as the next primary energy source for many countries, in his opinion.

Regardless of whether the future lies in renewables or in nuclear, the end seems nigh for coal investments. The World Bank has warned that action to cut carbon emissions will devalue fossil fuel investments in the future. Agencies such as Citigroup and Standard & Poor’s have issued warnings of the risk posed to fossil fuel investments in the future, and a report by Citigroup found that there could be $100 trillion worth of potential “stranded assets” in the fossil fuel industry in the next few years.

Image credit: Copyright: kodda / 123RF Stock Photo


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