On cutting coal dependency for establishing a cleaner energy mix: A proposal for energy transition strategy in South Africa

Abstract

Although coal has powered economic activities for decades and significantly contributed to increasing economic welfare at the global level, its place in the modern economic system remained controversial because of its environmental impacts. Thus, cutting coal utilization and dependency on this energy source posits a great environmental benefit. With is motivation, the primary motivation of this study is to investigate the role of possible cleaner energy alternatives in cutting coal dependence in South Africa, which is prevalently utilizing coal in energy. To this end, the study employs Fully Modified Ordinary Least Squares (FMOLS) as a baseline estimator and Canonical Regression (CCR) as a robustness check from 1984 to 2022. The obtained outcomes denote that (i) an inverted U-shaped nexus exists between economic growth and coal utilization in some models. (ii) Renewable and hydro energy use has a negative and statistically significant impact on coal use, while nuclear energy and natural gas have no statistically significant impact. (iii) Population density spurs coal utilization. (iv) Robustness checks imply that empirical outcomes are substantially robust. In this regard, South Africa could reduce the demand for coal with renewable and hydro energy sources.