A combined minerals and energy ministry could work — in theory
SA’s anachronistic coal dependence will need to be addressed, as will investors in coal who have shaped the country’s energy path
Having recently argued against the recombination of departments of minerals resources and energy, it is now necessary to argue why it does not have to be a bad thing — at least in theory.
The separation of the two portfolios more than a decade ago did not immediately produce positive outcomes for capacity within the department of energy, or for development of a long-term vision, while the departments of minerals resources was well-resourced and became increasingly opportunistic and short-sighted. The department of energy did get a reasonable National Energy Act adopted in 2008, initiated promising processes for integrated planning, and started looking beyond fossil-fuel supply strategies, but over the past five years has made little positive national contribution.
A zero-carbon energy system (technically net-zero, as there will be a role for biomass that is produced sustainably) will need large quantities of [rare-earth] minerals (especially for solar and wind infrastructure), many of which SA has in abundance. The minerals sector faces various challenges, but the most pressing and predictable challenge confronts the sub-sector of coal, with knock-on impact for minerals value chains in which coal-fired electricity plays a significant role.
SA clinging to an anachronistic centralised electricity system and a fatalistic commitment to exploiting “our endowment” of fossilised hydrocarbons will do no favours to the rest of the minerals sector, as attested by recent statements by the Energy Intensive Users Group of Southern Africa.
A long-term vision for the minerals sector will need to come to terms with a decline in coal — sooner rather than later. Export prospects are increasingly uncertain, both in terms of global demand and market prices, as it is now abundantly clear that there is far more coal than the world needs for energy supply (India has concluded that it can rapidly stop importing), not to mention increasing recognition of externalised costs.
Renewable-energy technologies and extendable value chains such as power-to-liquids offer enormous industrialisation opportunities for SA
Domestic demand and supply are all over the place and Eskom has largely given up its role as a stable anchor customer, instead causing supply bottle-necks, price volatility and increased opportunities for rent-seeking.
The dynamics of linkage between the energy system and minerals sector that had positive economic or industrialisation impacts last century have changed irrevocably. It is delusional to imagine that incremental efficiency gains or end-of-pipe technologies — promoted in the name of “clean coal” and a prolifieration technology abbreviations (HELE, CCS, FGD, LNB) — can make coal-fired power either benign or economic.
Systemic path dependence needs to be addressed directly, not just through modernisation of infrastructure, but by calling out the financial component — the extent to which “realism” in energy discourse is shaped by the investors already and continuingly committed to making profit from fossil fuels.
Integrated energy planning
There is considerable positive potential in linkage between the energy system and minerals sector if we can overcome the predilection for easily appropriated concentrated energy resources and a top-down (vertically integrated) approach to electricity supply. The provisions for integrated energy planning (IEP) in legislation reflect an appreciation of systems-thinking and the limitations of supply-side strategies and demand projections. The configuration of government ministries is of less significance than the failure to implement this central pillar of the National Energy Act.
Renewable-energy technologies and extendable value chains such as power-to-liquids offer enormous industrialisation opportunities for SA, in a field where we have competitive advantages additional to our world-leading solar and wind resources, given our experience in synthesised liquid fuels. Radical economic transformation requires radical energy transformation, otherwise profiteering from coal will simply spread a bit more top-heavy affluence, short term, to the detriment of the majority and severely compromising our off-spring.
A department or ministry with an appreciation of all our energy resources, plus a long-term approach to deriving social value from our minerals, could achieve great things
A wealth of recent research and publications — notably Creamer & Bischof-Niemz (2019) — have elaborated SA’s opportunities and quantified employment growth potential of a planned transition to a sustainable and people-friendly energy system from a technological perspective. It is clear that resource-efficiency mandates at least doubling the share of electricity in energy use (from less than one third) and the electrification of transport will also reduce oil imports, local pollution burdens and exposure to fossil-fuel price volatility and climate-related risks.
Advocacy for energy democracy and social ownership of the electricity system are exploring the benefits for social cohesion — by addressing poverty and inequality — available if public benefit is valued above private profit in integrated energy planning.
If the overriding priorities for managing energy and mineral resources are the realisation of net public benefit, ending energy poverty and optimal resource utilisation, then a department or ministry with an appreciation of all our energy resources, plus a long-term approach to deriving social value from our minerals, could achieve great things (without what is basically sequestered carbon and energy that we really shouldn’t put back into our atmosphere). This is a big “if” that will require active citizenship to expose vested interests, challenge government deference to investors, and demand that we stop discounting the future.
While the president’s decision that: “Mineral resources is combined with energy” may simply indicate a disregard for the consequences of fossil-fuel dependence and could be detrimental to sustainability and realising basic human rights, it does not have to equate with keeping the energy system subservient to vested interests. A holistic approach would be beneficial for modernisation of the electricity system, offer massive efficiency gains in transport and large-scale job creation, and would also reduce costs over time and maintain some chance for the survival of all our children.
• Worthington is a project manager for the Friedrich Ebert Stiftung. He writes in his personal capacity.