Wednesday, 21 June 2023: Eskom and the Kingdom of the Netherlands signed a letter of intent (LOI) yesterday to further their collaboration on the development and implementation of ‘Just’ initiatives that enable job creation, drive economic growth and improve the local environment surrounding the Grootvlei Power Station as the power station transitions from coal generation into a renewable energy hub.
Eskom and the Kingdom of the Netherlands developed a previous LOI in July of 2022, which paved the way for this LOI through a pre-feasibility study for a “climate-smart, labour-intensive agriculture/horticulture development” at the Grootvlei Power Station in Mpumalanga.
Using technology in agriculture to minimise the effects of climate change while creating jobs in the sector are points of mutual importance for Eskom and the Kingdom of the Netherlands.
The new LOI provides an integrated and sustainable approach for repurposing the Grootvlei Power station as the site transitions. This marks a milestone in South Africa’s transition away from coal reliance and a key moment in Eskom’s partnership with the Kingdom of the Netherlands. The LOI aligns on the need to develop and implement a smart agriculture demonstration facility, to collaborate further on agricultural activities and to train community members at the Grootvlei Power Station.
Through this LOI, Eskom and the Netherlands seek to develop further opportunities to create jobs by training and upskilling people from the local communities. The LOI also puts forward the intention to explore the potential of creating a market in the region for profitable, productive, sustainable, and climate-smart farming. A climate-smart horticulture demonstration site will be developed, further creating job opportunities. In addition, relevant knowledge and skills between South Africa and the Netherlands will be transferred and local enterprises’ business cases will be improved while promoting the creation of new enterprises. Finally, synergies will be explored and identified with the broader Just Energy Transition (JET) training facility at Grootvlei.
This collaboration embodies the ‘Just’ principle of Eskom’s Just Energy Transition. For the energy transition to be ‘Just’, it must consider the social impacts on surrounding communities, namely, potential impacts on jobs and local economies. Eskom believes that as it transitions to cleaner sources of power, it must do so in a responsible manner that considers all impacts and stakeholders, including coal mining communities that will be impacted by the transition. Eskom will continue to undertake socio-economic studies to understand the impact of the closure of the coal plants and how to mitigate its impact.
Eskom seeks to repower and repurpose other existing coal plants in line with the approach detailed in the LOI. This is aimed at preserving jobs and utilising existing grid capacity across South Africa. These projects will prioritise Mpumalanga’s oldest coal plants. The coal plants will be repowered by leveraging the existing infrastructure to build new generation capacity including solar, wind, batteries and/or synchronous condensers. The plants may also be repurposed into new centres of economic activity such as training centres, water treatment facilities, manufacturing plants, microgrid assemblies and modern farms.
It is to be noted that considering the current capacity constraints experienced by the country, as coal-fired power stations reach end of operational life, Eskom will explore multiple avenues to ensure system stability and manage security of supply. This includes repowering transitioning coal power stations with renewable energy and continuing to operate power stations beyond their shutdown dates where it is practically possible and in line with legislation.
Eskom aims to continue building on the strong relationship developed with the Kingdom of the Netherlands to drive impact together. Eskom values the commitment by the Kingdom of the Netherlands in helping combat climate change and support the just energy transition in South Africa.