Just energy transition is contentious but common ground is possible

Posted on August 17, 2023

The just energy transition is a highly divisive topic in South Africa, yet there are glimmers of some common ground. Several areas of commonality came to light during a public lecture and panel debate held at the University of Pretoria’s Future Africa, a pan-African platform for collaborative research. The lecture, held on Friday, 4 August, was organised by the Energy Economics Unit of the Faculty of Economic and Management Sciences.

One area of general agreement is that, given its capabilities and already set infrastructure, South Africa must focus in developing its local manufacturing to be able to produce a bigger proportion of the equipment such as transmission components and solar panels, batteries and inverters needed to enable the just energy transition. Another is the need to redouble efforts to ensure that communities affected by the shift away from coal are included in the just energy transition and able to access the economic opportunities it presents.

The event was held as a partnership between the United Nations Development Programme (UNDP), the Presidential Climate Commission (PCC), the University of Pretoria and the University of Johannesburg. Dr Kgosientsho Ramokgopa, Minister of Electricity, set the scene in his lecture, ‘Energy Sovereignty in the Context of the Sustainable and Just Energy Transition’.

Dr Ramokgopa, flanked by UP's Professor Roula Inglesi-Lotz (left) and Professor Sunil Maharaj (right), emphasised that the just energy transition should entail an optimal mix of energy sources.

Acting VC Professor Sunil Maharaj, Mr Steve Nicholls from PCC and Professor Roula Inglesi-Lotz from the University of Pretoria stressed in their opening statements the need for evidence-based policymaking and collaborative efforts in the sector to ensure no one is left behind within the just energy transition framework.

In his opening remarks, Dr Ramokgopa commented that the transition had become “one of the most polarising conversations of our time” and emphasised the need to hear all views on the just energy transition. “In the quest to find a solution, it is important that we are very tolerant to other views that might not be consistent with our views,” he said, adding that events such as the UP-UNDP lecture were an opportunity to have crucial conversations about the crafting of a just transition that would leave no one behind.

He observed that the just energy transition is often approached from polar opposites, either focused on ending fossil fuel use to preserve the planet for posterity or on exploiting fossil-fuel resources to the full. Dr Ramokgopa said South Africa needed a nuanced approach that sought to balance multiple dimensions, including environmental and ecological considerations, economic and socio-economic factors and energy consumption and generation.

Devastating economic impact of load shedding

“The economic dimension of this conversation should not be lost on us,” Dr Ramokgopa said, observing that load shedding has had a “devastating impact” on the economy. An estimated 600 000 jobs and R61 billion in revenue were lost through load shedding in 2022, with job and revenue losses likely to rise to 850 000 and R77 billion, respectively, at the current rate of unmet energy demand.

On the other hand, the Renewable Energy Power Producers Programme (REIPP) had created significant opportunities for the economy through total investments of over R209 billion in investment, 20% of which was foreign direct investment, and the creation of 60 000 “quality” jobs. “Once we become aggressive in the decarbonisation agenda, of course these numbers would increase exponentially.”

While noting that renewables “constitute the future” in addressing energy poverty and connecting people quickly to electricity through microgrids and rooftop solar systems, Dr Ramokgopa emphasised that the just energy transition should entail an optimal mix of energy sources. “It is not about discarding one in favour of the other; it is about how we find a healthy mix.”

In moving forward with decarbonisation and the decommissioning of coal-fired power stations, he said it would be key to ensure the areas concerned did not become deserts in economic terms.

Gaylor Montmasson-Clair, Vikesh Rajpaul, Silas Mzingeli Zimu, Bertha Dlamini, Jessika Bohlmann were part of a panel with Lennox Wasara (at podium) as programme director.

One way to achieve this would be to build industrialisation capacity so that when, for example, Eskom rolls out the 14 000 kilometres of transmission lines needed to match growth in new generation capacity, the components can be manufactured locally. “The jobs that are displaced in the mining communities of Mpumalanga can then migrate into the new areas in support of decarbonisation,” the Minister said.

From a jobs perspective, in the worst-case scenario, the net jobs impact under the decarbonisation agenda should be zero and, in the best-case scenario, positive. “That’s the ‘just’ element in relation to the just energy transition and ensuring that people do not go hungry as a result of the transition.”

Master plan to build SA’s renewable energy industry

In the panel discussion that followed the public lecture, facilitated by Dr Jessika Bohlmann of EMS Faculty, the panellists emphasised the importance of building South Africa’s local production capacity and ensuring the transition included women, youth and people with disabilities.

The point was made that over the past 10 years, South Africa had imported solar panels, batteries, inverters and wind turbines and inverters to the value of R180 billion but, in only the past six months, had already spent R46 billion on importing these products.

“A part of me says this is fantastic – the renewable energy transition is accelerating … but the other part says this is really a missed opportunity; this is really sad. There is more than enough to build an industry and we do have the capabilities to build that industry,” said Mr Gaylor Montmasson-Claire, from the Trade & Industrial Policy Strategies (TIPS), who also highlighted that the South African Renewable Energy Masterplan, which aims to rebuild South Africa’s renewable energy and battery industry as a compact between government, business and labour is currently out for public comment.

Mrs Bertha Dlamini, President of African Women in Energy and Power, called for a “gender just” energy transition that takes into account the impact of lack of access to energy to women and communities. “When we look at the just aspect of transition, we have to ask ourselves how are we promoting an inclusive energy ecosystem?” She said government, private sector and civil society should collaborate to support young entrepreneurs to participate in energy projects and address the challenges they face in accessing capital, technology, networks and development opportunities.

The event was held as a partnership between the United Nations Development Programme, the Presidential Climate Commission, the University of Pretoria and the University of Johannesburg.

Referring to the Electricity Minister’s address, she said he had presented a plethora of entrepreneurial and employment opportunities. “Such opportunities are not clearly understood by the beneficiaries, so how do we work together as private sector, government and civil society to educate our communities on the opportunities that exist and how they can prepare themselves to participate so that they can use their agency to go after the opportunities?”

Eskom sweating its assets

Dr Vikesh Rajpaul, General Manager of Eskom’s Just Energy Transition Office, set the record straight on the rationale behind the decommissioning of coal-fired power stations, including the Komati station, controversially shut down in 2022.

He said power stations have a defined life and it is not Eskom’s intention to prematurely shut down any power stations. In the case of Komati, it had been built in 1961, mothballed in 1990 and brought back for a second life between 2003 and 2008. The station was scheduled for final shutdown between 2018 and 2020, although the last unit was only closed down in 2022, when Komati was struggling to produce a minimal amount of power.

“The shutdown of the production units at Komati was not informed by external forces, it was not informed by a climate change agenda. It was informed by economics,” he said, pointing out that energy plants have a defined life.

Dr Rajpaul said Eskom’s existing strategy is to “sweat” its assets by running them as long as possible and maintaining them to the best of its ability, while at the same time repurposing and refurbishing stations nearing the end of life to stabilise and develop local economies. For example, Eskom is establishing training centres for local communities, building containerised manufacturing facilities and exploring alternative employment opportunities, including agricultural facilities under solar panels.

Commenting on the view that the concentration of coal in Mpumalanga had historically been the lifeblood of the economy there, Dr Rajpaul said that unemployment in the province was higher than the national average. “The just energy transition allows us to attain economic diversification and to expand the economy.”

The UNDP Just Energy Transition Platform Public Lecture was the first of a series that are planned this year by the Energy Economic Unit.

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