South Africa's Eskom to reduce power cuts but long-term outlook bleak

South Africa's power utility, Eskom, revealed that it will collaborate with the Kingdom of the Netherlands to improve the coal-powered Grootvlei Power Station in Mpumalanga.

The energy company, which is responsible for sharing electricity across South Africa, said that it signed a Letter of Intent (LOI) with the Netherlands on Wednesday, which will help job creation, economic growth initiatives and bring improvement in the environment around the Grootvlei Power Station, All Africa reported.

While Eskom and the Netherlands had signed a similar LOI last year in July, the energy company shared this new LOI is more focused on an "integrated and sustainable approach" for the Grootvlei Power Station to turn into a renewable energy hub from a coal-fired power station.

"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," Eskom said, SA News reported. "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."

The power utility added, "Through this LOI, Eskom and the Netherlands seek to develop further opportunities to create jobs by training and upskilling people from the local communities."

Furthermore, this LOI will also allow South Africa to "explore the potential of creating a market in the region for profitable, productive, sustainable, and climate-smart farming" as Eskom is planning to develop a climate-smart horticulture demonstration site, which will also create job opportunities in the country.

Additionally, this deal between South Africa and the Netherlands will help share relevant knowledge and skills between the two nations, including the promotion of new business opportunities.

"Finally, synergies will be explored and identified with the broader Just Energy Transition (JET) training facility at Grootvlei," the energy company said, adding, "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," SA News reported.

Eskom explained that it will continue to undertake socio-economic studies in order to understand how closing the coal plants will create an impact and also how to mitigate it.

The energy company also hinted at repowering and repurposing other coal power plants in the country, noting that the latest LOI was aimed at preserving jobs and utilizing existing grid capacity across South Africa, while prioritizing Mpumalanga's oldest coal plants.

Eskom went on to explain that the existing infrastructure of the old power plant will be used to build new generation capacity including solar, wind, batteries and/or synchronous condensers.

"It is to be noted that considering the current capacity constraints experienced by the country, as coal-fired power stations reach the end of operational life, Eskom will explore multiple avenues to ensure system stability and manage the security of supply," the energy utility said.