Eskom Holdings

Eskom has the highest emissions intensity in the sample, is wholly dependent on burning the dirtiest types of coal in one of the oldest fleets and does not have the financial resources to address these issues. South Africa is responsible for half the emissions of the whole of Africa and 44% of this comes from Eskom for 44% of these. The company is already seeing investors withdrawing from coal. If Eskom does not speed up its move away from coal, it risks being left with a fleet of stranded coal assets that it can no longer maintain or run efficiently.

Carbon capture and storage (CCS) and other technological solutions are a key part of Eskom’s strategy but there is no evidence of significant resources being allocated to them nor of significant breakthroughs which will allow the company to decarbonise its fossil fuel fleet. Eskom’s research direction report is informative and detailed, but its other reports lack data on actual spending and concrete results to enable the company’s transition.

Eskom does not have meaningful decarbonisation targets. Although the company committed to net-zero emissions in 2050 this is dependent on technological and financial feasibility. Eskom’s net-zero target appears more an aspiration than a concrete commitment backed up with a detailed transition plan. For targets to be effective there should be short time intervals between them and short-term targets to incentivise short-term action.

Eskom’s Just Energy Transition (JET) aims to set targets for 2030, 2040 and 2050 but no evidence of these targets was found. Eskom plans to increase wind from 4% to 22% by 2030 and solar from 3% to 10%. There is little evidence of this rollout to date.

Eskom’s JET requires the company to reconcile competing social, financial and climate objectives. Besides increasing solar and wind, Eskom also plans to repower coal with gas, research carbon capture and other technological solutions and decrease coal from 72% to 42% of capacity.

Eskom is focussed on addressing financial and governance issues instead of climate issues. The company is completing new coal capacity and addressing its maintenance backlog which has caused recent increases in emissions. The company is also restructuring to respond to the climate transition.

Due to low levels of maintenance and financial difficulties Eskom’s recent emissions intensity has increased. It has had to shut down supply of electricity due to lack of operational capacity.

Eskom’s financial, governance and state ownership issues mean that it struggles to resolve competing priorities. The company is very aware of climate risks but unable to address most of them. It appears committed to its Just Energy Transition but has the highest emissions intensity in the sector.