Tensions in the energy sector are growing
Eskom’s autocratic behaviour and resistance of renewable energy supply shows the need for a credible, forward-looking plan
It may be tempting for the new Minister of Energy, Mmamoloko Kubayi, to hang back as stakeholders, such as union federation Cosatu and independent power producers, contest Eskom’s autocratic behaviour and pronouncements for the electricity system, but it would be doing a disservice to the country, particularly people expecting to be around for 30 years or more.
Tensions between long-term and short-term interests are growing ever more pronounced in the energy sector, but continue to be ignored as strategic choices are contested only in relation to short-term interests, as if we were in permanent crisis mode, even when we have spare generation capacity.
The recent announcement by Eskom of the imminent closure of some coal-fired power plants and the opposition to this by Cosatu, highlight the reasons for national policy and legislation providing for proper energy planning, including integrated resource planning (IRP) for the electricity sector.
Eskom’s ongoing obstruction of renewable energy supply further illustrates the need for the state to adopt a coherent and credible plan to which state-owned entities should be required to conform. It would be useful to know whether the department of energy will continue the IRP process by tabling a "policy-adjusted plan" in coming weeks, as promised by the previous minister.
Cosatu’s recently launched campaign against Eskom’s proposed plant closures (some only a few years ahead of the prevailing decommissioning schedule) is understandably defensive in the face of potential job losses. However, Cosatu has, until now, been promoting its "just transition" that has been central to the federation’s policy on energy development for several years.
Resisting job-shedding in the coal industry is an easy campaign for Eskom shop-stewards and coal truckers to endorse, but it will not serve in workers’ best interests in the long term. In reality, Cosatu is likely to strengthen the energy incumbency oriented to the pursuit of profit, particularly through cost-avoidance (and externalisation) and resisting energy supply options that are not fuel-dependent, highly centralised and unlikely to advance sustainable employment in the electricity supply sector.
It is easy to imagine Eskom executives welcoming the announcement of the campaign — indeed the provocative manner in which they chose to communicate their "decision" provides key substance for the campaign’s complaint. Little more than a year ago, Eskom was arguing for "life extension" of such aging power plants, but this was rejected by the IRP process in light of an ongoing decline in electricity use.
This lack of anticipated electricity "demand growth" is the true cause for consideration of early plant closure, but Cosatu appears to have bought into Eskom’s narrative of placing the blame on its competitors, as well as its flagrant misrepresentation of cost issues.
In the latest IRP consultations convened by the department of energy, several stakeholders argued that the construction of the huge new Kusile coal-fired plant should be scaled back; however, the decommissioning of some old plants is a far more lucrative proposition for Eskom management.
Eskom’s interests would also be served if the old plants are kept running, in place of allowing renewable energy supplied by others into the electricity system. This underlines the fact that as long as Eskom is not required to act in the broad public interest by embracing transformational change, its self-serving management is in a no-lose situation, while without the state planning for a just transition, workers will increasingly face a no-win situation.
In a global and national context of accelerating change, the common cause of workers for the expansion of employment opportunities will run into conflict with the immediate interests of workers in parts of the economy that are undergoing transformation. Rather than simply rejecting change (heedless of the net social benefits), organised labour could make real gains by using the prospect of early decommissioning of coal-fired plants as a platform for the Just Transition for which they have previously campaigned— a forward-looking plan that includes institutional arrangements to uphold the interests of workers and offset the impacts in coal-dependent communities.
It is unacceptable for Eskom to unilaterally pronounce on plant closures with no social plan or deliberation with workers, just as it is unacceptable for the department of energy to endlessly prevaricate on electricity system planning, inter alia, placing opportunities for deal-making over the methodical pursuit of public benefits. The solutions lie not in perpetuating the status quo, but in an honest and holistic appraisal of the challenges, and the adoption of multi-criteria decision-making that recognises the opportunities for job-creation in sustainable technologies and practices — the kind of decision-making that is called for in IRP.
International experience shows a consistent trend of higher employment with the use of renewable (rather than concentrated fossil or nuclear) energy and optimisation of electricity system management; however, our existing renewable energy procurement programme was designed not, primarily, to support localisation of manufacturing, but to drive cost minimisation by independent power producers. Where some localisation is happening, it is being undermined by Eskom’s defiance of the programme.
Kubayi could gain credibility by announcing when a proposed plan for electricity will be tabled for stakeholder consultations. She may earn respect and perhaps avert some fruitless confrontation between a state-owned enterprise and organised labour, with an indication of how the interests of energy-sector workers and the general public will be weighed in decision-making, without being subservient to the profitability of Eskom as a corporate monopoly utility that has tied its fortunes to the minerals sector.
• Worthington is writing on behalf of the African Climate Reality Project, the African chapter of former US vice-president Al Gore’s Climate Reality Project.