Advertising supplement to the Mail & Guardian July 9 to 15 2021 3

IDC

The Just Transition is a delicate balancing actThe poor will be the most impacted if the transition to green energy

is not carefully managed

IDC, SASOL partner to develop hydrogen economyBy Rian Coetzee

Adapt or die is a mantra often used by contrarians seeking to keep pace with the fast-transforming e c o n o m i c a n d t e c h n o l o g y landscape.

Ironically, both IDC and SASOL’s agility built over several decades of resilience enabled the two entities to stay ahead of the curve and their peers. Established in 1940 through an Act of parliament, the IDC has grown to become the most prominent development finance corporation in sub – Saharan Africa. Such is the IDC’s reach that it has exposure in almost all critical sectors of the economy.

In fact, it is the IDC’s support that led to the creation and growth of SASOL. This home-grown business initially started as an oil production company that has developed into a global synthetic fuels and chemicals group. Its foray into competitive markets, including in the US –speaks volumes of its phenomenal growth.

Banking on their collective expertise and experience, the two pillars of South African industrialisation have signed a memorandum of understanding to collaborate on initiatives aimed at fast-tracking the commercialisation of South Africa’s hydrogen economy. With the global demand for energy expected to increase by up to 40% by 2050 and given the highly carbonised local

economy, both the IDC and SASOL consider the hydrogen economy an important enabler of the transition to a renewable energy mix.

In addition, the two entities will, among others, collaborate on a non-exclusive basis in advocating at relevant international fora for policy frameworks to enable a hydrogen economy; develop pilot and commercial scale hydrogen projects to pioneer viable and sustainable solutions; access local and international financing options and pursue strategic projects that benefit the country’s energy transition and economic developments goals.

The development of the hydrogen industry is a key enabler in South Africa’s just transition to a decarbonised future. Hydrogen has the potential to decarbonise various industrial sectors and IDC intends on getting involved in the development of those catalytic projects needed to develop this new industry.

IDC is optimistic about the partnership, looking forward to working with Sasol in identifying and co-developing such catalytic projects. IDC involvement in developing the hydrogen industry also provides opportunities to fulfil its development mandate including job creation and opportunities to involve black and women entrepreneurs.

Development of the hydrogen economy has been identified by SASOL as an opportunity for South Africa to become a credible exporter of

sustainable energy and chemical products, such as hydrogen, ammonia and sustainable aviation fuel also contributing to much-needed employment opportunities.

THe parties’ ambition is to lead and co-create South Africa’s hydrogen ecosystems through

strategic partnerships, leveraging proprietary technology and integrated value chains as part of the nation’s just energy transition.

Rian Coetzee is the Divisional Executive for Industry Planning and Project Development at the IDC

By Reginald Demana

H ow best can we ensure a Just Energy Transition (JET) without impacting the lives of the most economically vulnerable segment of the global population?

It’s a difficult question depending on whom you ask. Since the watershed 2009 United Nat ions Cl imate Conference commonly referred to as the Copenhagen Summit and held in Denmark, most industrialised countries, including a segment of lobbyists, have consistently rooted for the adoption of a plan that seeks to mandate cuts in carbon emission to keep average global temperatures from rising any higher than 2 degrees celsius.

That carbon emissions are toxic to the environment and drive climate change is indisputable, making a significant reduction in emissions an imperative. This is a common sense posit ion. We have over the years witnessed the impact of climate change on our environment — and this is primarily the reason for the IDC’s commitment to renewable sources of energy.

Based on forecasts from the International Energy Agency (IEA), it is evident that to cut carbon emissions by three quarters over the rest of this century while maintaining economic growth, some developing nations would have to develop alternative energy sources, which is what South Africa is already doing.

Over the past decade, the Industr ia l Development Corporation (IDC) has invested over R14-billion in various renewable energy projects spread across the country. Add private sector-led investment, which has accelerated in recent times, and South Africa’s commitment to a green economy is taking root and so too is the IDC’s commitment to renewables.

Yet on the flip side, some developing countries

have been vocal in their opposition to what they view as a bitter prescription negatively impacting their energy shortages and resulting challenges. The fact is that nearly half of the world’s electricity comes from coal. In sub-Saharan Africa, coal and firewood remain embedded and affordable options, mainly explaining the legacy

reliance on coal-generated power and the extent of deforestation in the region.

There are a multitude of societal benefits of reduced climate risks, sustainable economic growth, enhanced air quality and human health, however, asking populations across the continent to abruptly abandon fossils without

a credible transition path is unrealistic and the converse of a just energy transition. We need to be conscious of the potential costs associated with accelerated and short-term transition processes. The impact of this process will not be equally felt by all and there is a need to ensure that the poor and marginalised are not disproportionately affected.

A just transition acknowledges that those who rely on fossil fuel production for their livelihood, or those in countries like South Africa, who have minimal alternatives available, may still need to rely on fossil-fuel energy consumption to meet current developmental needs until alternatives are available. Even so, developing countries are taking steps to enable the decarbonisation of local energy systems. In doing so, they are carrying a disproportionate share of the burden of the global energy transition.

Here at home, g iven the accelerated deployment of renewable energy, we need to ensure negative impacts to the coal sector and value chains will be minimised, especially within the South African context of poverty, inequality and unemployment.

The just transition is a delicate balancing act. It is about reducing Greenhouse Gas Emissions from the coal sector and reducing water usage in power generation, ensuring better quality jobs, and using our ample solar resources and other green energy sources in South Africa to ensure competitive electricity costs, which will be a crucial enabler for our economic growth.

What we need is a just transition to a low-carbon economy, a transition that supports workers and communities currently reliant on unsustainable industries and energy sources. This must be the starting point in endeavours to reach a just and equitable solution.

Reginald Demana is Divisional Executive for Min-ing, Metals, Infrastructure and Energy at the IDC