A drastic reduction in coal energy supply will come with a substantial cost for South Africa, as the country grapples with growing poverty levels and record-high unemployment. Vuslat Bayoglu, the Managing Director of Menar, expressed concerns about South Africa's ability to afford a power system overhaul to accommodate renewable energy, especially with the country's GDP growth rate dropping to 0.4%. He shared these concerns during a panel discussion at the Coal and Energy Transition Day conference in Johannesburg on July 18.

Bayoglu highlighted that among available baseload suppliers, hydrogen is rated as the most expensive at an estimated cost of $239 (USD) per MWh, followed by nuclear power at $225 per MWh. In comparison, coal costs around $74 per MWh, and gas is approximately $94 per MWh. He argued that renewable energy is the most expensive resource.

The main priority for South Africa, according to Bayoglu, should be to bridge the gap between the rich and poor and create job opportunities. Coal currently stands as the country's third-largest employer in the mining sector, providing over 90,000 job opportunities. He stressed that the potential to generate more jobs lies in the coal industry, citing that a coal mine opening can employ between 400 to 800 people, whereas solar panels are produced in China, and South Africa does not manufacture wind turbines.

The Just Energy Transition plan states that R648 billion will be required for the 2023-2027 period to integrate green energy resources and reduce coal usage. However, Bayoglu pointed out that it is unclear where the funds for this plan will come from.

Bayoglu asserted that despite the challenges, coal's resilient nature will allow it to maintain its position as a significant contributor to the world's energy mix. He suggested that Eskom needs to invest in clean coal technology by retrofitting or building power stations with carbon capture functionality to ensure a reliable energy supply.

Moreover, Bayoglu emphasized the need for the government to enhance private sector involvement, streamline bureaucratic processes, and take decisive action in resolving the challenges faced by Transnet, the state-owned rail and ports operator.