Letter to Minister Ramokgopa on Solving the Energy Crisis
Written by the Climate Justice Coalition Secretariat – Date: 2023/06/05
Dear Minister Ramokgopa,
With your newly bestowed powers of overseeing new generation capacity, and your mandate of ending loadshedding, your job is one of the most important in the country. For the sake of our collective future, we wish you success, and write to you as the Secretariat of the Climate Justice Coalition to help you effectively resolve our energy crisis and do so in a way that properly factors in the full costs and benefits of energy and avoids false and risky solutions that benefit a few at the expense of the many.
The Climate Justice Coalition is a South African coalition of about 50 trade union, grassroots, community-based and non-profit organisations. Together we are advancing a transformative climate justice agenda, which puts energy justice at its heart, and works to tackle the inequality, poverty and unemployment that pervades South Africa. One of our coalition’s central campaigns is for a Green New Eskom – demanding a rapid and just transition to a more socially owned, renewable energy powered future, that provides clean, safe, and affordable energy for all, with no worker or community left behind. It is in line with that vision that we write to provide advice and critique around some of the proposals you have put forward since taking office.
In summary, as we detail below, we are worried that proposals to push forward powerships, extend the life of coal plants, and bring online new coal, nuclear, and gas, could unnecessarily cost the country trillions of rands – driving up electricity prices, deepening poverty, and increasing deadly pollution, while not properly solving our energy crisis. Thus we urge you to focus instead on a rapid and just rollout of renewables and storage, coupled with investing in upgrading and extending the grid. Doing so could save us hundreds of billions, reduce energy costs, decrease deadly pollution, and more rapidly, cheaply and effectively solve our energy crisis.
We are also worried that the energy crisis is being used as an excuse to drive the widespread and unchecked privatisation of our energy system – putting it in the hands of large corporations who are driven largely by profit, rather than the public good. This could have worrying impacts on ensuring energy affordability and access, as well as delivering on a truly just transition that equitably shares the benefits of the transition and leaves no workers or community behind. As such, we are not calling for just any transition to renewable energy, we are calling for a just transition to a more socially owned renewable energy future, that provides clean, safe and affordable energy for all, with no worker and community left behind in the transition.
Renewables and storage are the best solution we have
Minister Ramokgopa, we have been encouraged by your recognition that we need to roll out a large amount of new renewable energy and storage. Unlike some leaders, you recognise that the state of our coal plants means they are in decline and cannot be quickly turned around. So we will need vast amounts of new energy online to plug the gap in energy supply that is caused by a declining coal fleet and decades of failure to sufficiently invest in new generation. To plug that gap and solve load shedding, the evidence is abundantly clear that solar, wind and storage are our most affordable, reliable and quick to bring online energy solutions – taking on average just 18 months to build.
Studies by economists and energy experts have shown that if we had not derailed our renewable energy program, we could have avoided most of the loadshedding we are currently facing. It’s time we get serious about the rollout of renewable energy and storage – as part of a just transition to a more socially owned renewable energy future. We must act both at the speed needed to urgently tackle both our energy and climate crisis. The government body that has come closest to understanding the scale of investment required is the Presidential Climate Commission, which recommends building 50-60GW of renewables by 2030 – coupled with peaking solutions.
Minister, as you have correctly diagnosed, the lack of investment in the distribution and transmission of new generation is one of the biggest obstacles to new energy. We desperately need to invest in the new transmission to facilitate more renewable energy and storage coming online. In the meantime, we should take advantage of the ample transmission capacity available in places like Mpumalanga. Not only does this allow us to bring new energy online in the short-term, it also invests in an area that is key to a just energy transition, given Mpumalanga’s heavy dependence on coal.
Extending the life of coal plants could be a major misuse of resources
Minister, we have been dismayed by your pronouncements around the possibility of extending the life of Eskom’s due-for-retirement coal power plants by up to twenty years. Estimates suggest that doing so could cost more than R400 billion. Pouring hundreds of billions into badly ageing and poorly maintained coal plants, may provide little return in terms of energy capacity. As such, rather than using up limited resources and limited transmission capacity in Mpumalanga for failing plants overdue for retirement, we should use them for more affordable, reliable, and cleaner energy options.
As your proposed modelling exercise on this front will likely discover, the returns in terms of new energy, cleaner air, and job creation would be much higher if we invested that money in solar, wind and storage, rather than keeping archaic and crumbling coal plants alive. Similar results have been found in places like the United States for their younger and better maintained coal fleet. Studies there have shown it makes more economic sense to retire and replace their coal fleet with renewables – even if we do not take into account the devastating public health and environmental toll of coal pollution.
Furthermore, delaying the necessary decommissioning compromises our own climate commitments, invoking the very real risk of carbon sanctions via the EU’s Carbon Border Adjustment Mechanism. This holds real risks of decimating our export ability. We also place at risk the funding promised through the Just Energy Transition Partnership and similar potential and much-needed climate investment and aid. If our climate commitments are seen to be regressing, this funding will likely be directed to other countries competing with us in this arena, such as Vietnam and Indonesia.
Minister, please do not be misled by misinformation being spread. For example, Minister Mantashe has argued that Komati coal power station will produce less power and fewer jobs when replaced with renewables. However, as analysts have highlighted, the numbers he cites seemed to be grossly exaggerated. In fact, under Eskom’s just energy transition project, Komati could produce more energy and jobs than it had – if the just energy transition is done right. We must be wary of vested coal lobby interests trying to spread misinformation to prevent a much needed transition to renewable energy.
New coal does not make any economic or environmental sense
The evidence is overwhelmingly clear that new coal simply does not make economic or environmental sense. It is more expensive than alternative forms of energy, and so would raise our energy prices significantly compared to alternatives, further burdening households and businesses. It would also create fewer jobs than renewable energy alternatives. Finally, as the most polluting fossil fuel, new coal would deepen our intertwined public health, climate, water, soil and air pollution crises.
The 2019 Integrated Resource Plan’s (IRP) economic modelling showed there was no need for new coal, but Minister Mantashe’s Department of Mineral Resources & Energy (DMRE) forced 1500MW of new coal plants into the mix through “policy interventions”. This was contrary to what their models showed made more economic sense – a renewable energy future. In response, several members of our coalition took the DMRE to court to halt irrational plans to build new coal. If your office attempts to push new coal plants, it can expect similar resistance both in the courts and in the streets.
Fossil gas is a deadly, polluting, and expensive fossil fuel that should be avoided
Oil and gas corporations are on an aggressive push to convince South Africa that fossil gas is natural, necessary, affordable, and clean. The reality is quite the opposite. Firstly, a range of different economic models show that we need little to no fossil gas in our energy mix, as a future of renewables and storage would be more affordable, reliable, and cleaner. Here even studies commissioned by the oil and gas corporations themselves show this to be true, such as one done by the National Business Initiative, which includes members such as Shell and Sasol. Their study showed that adding on lots of fossil gas, as the government plans to do, would increase the cost of energy, drive more energy insecurity, and drive up pollution.
A range of economic studies show that flexible, peaking power sources would only be needed for a small portion of South Africa’s energy mix to complement a broader rollout of renewables. Even if that role was filled by fossil gas, it would not be sufficient to justify a major domestic gas industry, as some vested interests are pushing for. Furthermore, that flexible role could be more affordably played by other technologies such as battery storage and pumped hydro. The studies show that investing heavily in fossil gas could cost us R600 billion to R1 trillion. Those are vital resources that could be better spent on a more affordable and reliable clean energy future.
Not only is fossil gas more expensive and not necessary, it is a heavily polluting fossil fuel, which contaminates air, soil, and water. Fracking for gas often pollutes groundwater with toxic chemicals. It also uses vast amounts of water – a major concern in drought-stricken South Africa. Studies show it can also lead to seismic activity and earthquakes. In the extraction, transportation, and generation of fossil gas, there are also high rates of leakage. As fossil gas is a powerful greenhouse gas – methane – that leakage can make it even more harfmul to the climate than coal.
When burnt, fossil gas is not clean either. Rather, increasing studies show that burning fossil gas has harmful emissions which cause respiratory problems – such that burning fossil gas is a leading cause of public health issues such as respiratory diseases and asthma. Given this, it’s even more disgraceful that the government wants to solve its failure to deliver energy, by bringing more deadly and harmful gas into peoples homes, rather than solving the energy crisis and electrifying appliances as much of the rest of the world is doing.
Security and affordability of supply for gas is also uncertain, as recent geo-political developments have shown. There is a major risk that if we commit heavily to gas, we may not be able to access affordable gas supply for these plants over their economic lifespan and will face skyrocketing energy prices. Loot for example towards Europe and the UK, who recently experienced a crippling energy crisis where oil and gas corporations engaged in war profiteering and price gouging, driving people into energy poverty. Allowing the likes of Shell to extract gas domestically would do little to shield us from this, given that they trade their gas on international markets to the highest bidder.
Powerships are an incredibly expensive waste of vitally important resources
Minister Ramokgopa, if you move ahead with pushing through the powership deal over the protest and resistance of local communities, civil society, and energy and climate experts, we believe it will be a legacy that will cloud your name and legacy in shame. The powerships company is mired in corruption controversies in several countries, and the President’s own Economic Advisory Council warned that the emergency procurement program that led to their choice here was “legally rigged” to favour them over more affordable, job-creating, and cleaner options like renewables and storage.
Powerships would provide energy at double the cost of alternatives, if not more. Doing so could cost us a staggering amount of R200-R500 billion over 20 years. While that might seem attractive to those connected to those tenders and the oil and gas corporations who would benefit from selling us polluting oil or gas to burn on the ships, it would drive up the cost of electricity and hurt business and households already reeling from neverending tariff increases and a crippling costs of living crisis.
The refrain that has constantly been repeated is that because of the urgency of our energy crisis, we must bring powerships online. Yet the program is mired in corruption scandals, environmental authorisation issues, cost issues, and questions of proper port authority. Thus it is likely to be quite some time before it can be approved, if it ever is. Then, even when it is approved, it would take many months to build the transmission lines, gas pipelines, and local infrastructure required to host them.
In all the years it is taking to try to force through and build expensive and polluting powerships, we could have already signed on and built solar and storage, which take just 18 months on average to build. If we urgently needed power online, we could have released the grid capacity that is being reserved or set to be built for powerships to the 1,000’s of MWs of wind power projects that were denied as part of Bid Window 6 of the REI4P last year. Instead, we rejected projects that were ready to be built and kept limited grid capacity aside for powerships.[1]
It seems the real urgency is not about solving our energy crisis but in ensuring a good crisis is not wasted. Clearly those who are connected to the powerships project want to ensure that they get their slice of potentially over half a trillion rand. We urge you to instead invest in readily available, more affordable and cleaner energy options which could better end our energy crisis, and help kickstart the green industrialization of South Africa. Doing so would create more jobs, and economic opportunities in the process, compared to shipping in an expensive solution from Turkey, effectively sending our scarce financial resources offshore with limited local economic opportunities.
Nuclear is an expensive distraction from solving the energy crisis we face
While many vested interests are using the crisis to try to push forward nuclear energy, it is clear that nuclear does not provide a meaningful solution to our crisis. Traditional nuclear plants are far more expensive than renewables and on average will take well over a decade to build, providing us no relief to our immediate energy crisis. Meanwhile small modular reactors are only set to be ready for commercial deployment in the 2030’s. Even then, their costs of deployment are set to be significantly higher than renewables and storage. Furthermore, a technology that is nowhere on the horizon, is one that deals with the toxic legacy of nuclear waste. Given that nuclear power is prohibitively expensive
[1] The presidency claims grid capacity is not being reserved for powerships. However, it is not clear then how powerships would connect to the grid. If we would need to build new transmission for them, it would slow down the speed of connecting to the project and blunt claims that powerships are a quick solution. Additionally, if we are building additional transmission capacity for powerships, should we not rather use that capacity for cheaper, cleaner, more job-creating alternatives?
and would take well over a decade to build, it is simply not a meaningful solution to our current urgent energy crisis – it is too slow and too expensive. It would divert hundreds of billions from the urgent task of rapidly bringing online new energy – a task for which renewables and storage are best suited – as solar and wind take on average just 18 months to build, not a decade or more.
Eskom must invest in new generation
The treasury’s bailout of Eskom came with the condition that Eskom could not invest in any new generation. This seems to be tying one hand behind our back, when we need all hands on deck bringing on board new generation to meet the energy supply gap that is at the heart of why we have loadshedding. Eskom should be allowed to construct new renewable energy and storage as part of its just energy transition program and a mandate to deliver clean, safe and affordable energy to all. Eskom’s limited renewable energy projects have been among its most successful projects, and we should build on that success to create a Green New Eskom. If we instead prevent Eskom from investing in new generation, it will be stuck with expensive and ageing coal plants, competing against newer, cheaper, and cleaner renewables. It will also continue to force Eskom to waste tens of billions on costly diesel to cover the energy generation shortfall it faces. This is pushing Eskom into a death spiral for generation, and saddling Eskom customers with expensive, polluting, and unreliable power.
The austerity approach to Eskom also means that workers that are supposed to be taken care of as part of the just energy transition, are instead falling through the cracks. Our union partners report that when Eskom power stations are closing, workers are not always being redeployed, re-trained, or otherwise taken care of as part of a just transition. If Eskom has a pipeline of projects they could more easily reabsorb and redeploy workers, ensuring that both workers and the communities they rely on are part of the transition. Instead, we have Eskom virtually winding down as a power generator, while the private sector takes over new generation, and good unionised jobs are lost.
Privatisation
We are worried that the energy crisis is being used as an excuse to drive forward the widespread privatisation of energy generation. We appreciate that the failures of government to deliver and invest in reliable, affordable, and clean energy have driven an understandable increase in public sentiment in favour of privatisation. However, in the words of renowned scholar Noam Chomsky: “That’s the standard technique of privatisation: defund, make sure things don’t work, people get angry, you hand it over to private capital.” Instead of handing over the vital energy sector wholesale to private interests, we should reclaim the importance of the public sector, and rebuild trust and faith in it.
In a country as unequal as ours, unchecked privatisation means the benefits and ownership of our energy system will be concentrated in the hands of a few. Land and money are the two main factors needed to invest in new generation, yet they are concentrated overwhelmingly in the hands of a minority. So, privatisation of energy, means concentration of energy’s ownership and benefits. Additionally, widespread privatisation means that energy is governed increasingly in the name of profit, rather than the public good. We are concerned what this might mean for energy access and affordability. We are also concerned that privatisation will not deliver sufficiently on a just transition for workers and communities, especially those currently dependent on coal for their livelihoods.
One of South Africa’s greatest successes was the government’s extension of energy access to millions of people who had been previously excluded by the Apartheid government. Let us reclaim that spirit of investing in the name of the public good. We can harness it to deliver a rapid and just transition to a more socially owned, renewable energy powered future, that provides clean, safe, and affordable energy for all, with no worker or community left behind. Doing so is one of the most urgent and important tasks facing our country, so we can effectively, equitably, and justly solve our intertwined energy, economic, and ecological crises.
Minister Ramokgopa, your task is not an easy one. If you are to effectively pursue it, you will need to push back against deep seated corruption and powerful lobbies who aim to lock us into an expensive, polluting, and privatised future. If you choose to be courageous and do what is needed, the Climate Justice Coalition can be an ally standing up against such powerful interests. Either way, we will work as a force of resistance against those lobbies and to drive forward a just energy transition. We sincerely hope we can work together to deliver on a just energy future for the benefit of the people of South Africa
Sincerely,
Alex Lenferna and Mbali Baduza
General and Deputy Secretary of the Climate Justice Coalition
Contact details:
Alex Lenferna – alex@climatejusticecoalition.org
Mbali Baduza – mbali@climatejusticecoalition.org