How policy can shape Mpumalanga's green industrialisation transition - Thomas Garner

LAST week's column examined the study titled "South Africa's Energy Sector Investment Requirements to Achieve Energy Security and Net Zero Goals by 2050".

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The work provides a quantified pathway to a secure and least-cost electricity system that can be financed at scale if policy aligns with timely project execution. The study confirms that the least-cost mix through 2030 and 2040 is a high-renewables system supported by flexible generation and batteries, with a spend profile that front-loads grid investment and build-out capital, and then reduces operating costs as the system matures.

A central question is how the Green Industrialisation (GI) scenario will affect Mpumalanga, the heart of South Africa's coal mining and coal power generation economy. To answer this, the University of Pretoria completed a Computable General Equilibrium (CGE) modelling exercise to assess macroeconomic implications. In parallel, the University of Cape Town undertook a detailed micro-economic study of the coal value chain, which is overwhelmingly concentrated in Mpumalanga.

The purpose of this work is to identify policy interventions that can mitigate the negative effects of the transition. The CGE analysis finds a long-run "double dividend" under the GI pathway. GDP growth improves relative to the baseline and environmental outcomes strengthen. The study concludes that delaying the transition raises socioeconomic costs through increased health burdens, exposure to carbon border adjustment mechanisms and higher operating costs for an ageing coal fleet. The micro study confirms the concentration of risk.

Of the 76 406 direct coal jobs nationally, about 87 percent are in Mpumalanga, while power stations employ 30 481 workers.