by Nick Hamer
The Just Energy Transition Implementation Plan [JETIP] is outlined in a highly technical, 220-page report. On the one hand, the plan outlines the need for R1.5 trillion over the next 5 years, whilst on the other announcing $8.5bn (R147bn) in pledges of support for certain aspects of the plan.
The plan outlines a series of principles and priorities for investment across electricity, new energy vehicles, and green hydrogen. There has been a lot of criticism of the fact that grants only amount to $330 million of the $8.5bn, though the inclusion of a $1300 million guarantee is perhaps more favourable than a concessional or commercial loan.
Although many criticisms of the investment are valid (why should loans and debt be a feature of a Just Transition?), it should also be noted where the investments are in the context of the required R1.5 trillion. For that figure, the government is anticipating R475bn of private investment in renewable energy (without any government guarantees), whilst the government will need to invest R132bn in enhancing transmission and distribution capability.
The Energy - Loadshedding Crisis
The JET IP takes place in the midst of a collapse in our electricity supply. Load shedding has recently become a permanent feature in South Africa and even the most optimistic projections from Eskom do not see a way out of this in the foreseeable future.
Experts such as Mark Swilling predicted this crisis 2 years ago and he recently reiterated the point that swift action is needed to add new capacity to the energy grid. The only viable path out of the crisis is to rapidly add renewable energy capacity to the grid on a much-increased scale.
The JETIP is belatedly aiming to add the much-needed energy supply to the grid. Unfortunately, government ministers are so locked into thinking we must have coal and nuclear as a ‘baseload supply’ the message often seems to be that renewables are not reliable and so won’t help us out of the current supply crisis.
Fossil Fuels VS Renewable Energies
Nowhere in government plans is there a suggestion that South Africa is going to stop burning coal anytime soon. In the JETIP own projections, the amount of coal power capacity is projected to remain the same in the 2022-2025 period. And yet Gwede Mantashe and Pravin Gordhan are still deciding to make public statements about not having ‘too much’ renewable energy and needing ‘reliable’ coal and nuclear as baseload. This sort of pronouncement adds to the fervour of paranoid coal/nuclear-lobby voices that increasing renewable energy supply is somehow the cause of Eskom’s current failure and that having more renewable power will make things worse.
The example of Germany vs South Africa
Coal lobbyists bemoan that Germany is now using more coal and that this is somehow the fault of their transition to renewable energy. On top of this, we are portrayed as moving ahead of European nations in moving to renewable energy. The reality is that Germany continues to use MORE renewables on a year-on-year basis. In the last year, they have unsurprisingly had to cut back on natural gas use, due to the war in Ukraine.
The issue here isn’t a failure of their increased use of renewables, it is a failure of Germany to wean itself off its addiction to fossil fuels as quickly as it should have. Meanwhile, South Africa is a long way from coming close to European countries’ use of renewable energy.
There is no reason for South Africa to not move to 50% renewables as rapidly as we possibly can. Contrary to the anti-renewable hype, renewables provide a predictable supply of energy, which is far cheaper than any other new energy including the coal power from the wasted billions spent on Medupi and Kusile.
Importantly burning diesel is astronomically expensive and should not be an ongoing supplier of energy. Our current mixture of coal, pumped storage, and peak power plants are perfectly capable of balancing the energy supply at times when renewable output is reduced.
As Germany has shown at higher renewable levels even coal plants can still be used to accommodate shortfalls in wind-solar supply. The point here is that for fossil fuel power plants the main cost is for burning fuel, which means that the less they are turned on the less the cost is. Mark Swilling points out that having nearly 100% renewable energy would be possible (and cost-effective) with backup gas plants ready to take the slack when output is lower. This would mean the gas plants are off 98% of the time.
Planning the way forward
Where does this all leave us with the JET IP? In an ideal world, we would have developed this plan about 20 years ago, brought on board trade unions and civil society extra, and forged a path away from fossil fuels. Unfortunately, we are now in a place where we need to proceed with the plan simply to keep the lights on and avoid permanent level 5 load shedding and the complete collapse of the grid. Much as we might wish that the plan had a much stronger emphasis on socially owned renewables or the need for further systemic transformation in society, these are not reasons to pull the plug on the only option on the table to deal with the energy crisis.
One of the advantages of renewable power is that there is essentially a permanent level of construction work as IPP’s have 20-year contracts and new turbines/ solar plants have to be built after that time. Unlike nuclear or fossil fuel power, renewable power lends itself more easily to changing its composition over time.
Surely it is time to look forward and plan the future developments of renewables we need in South Africa. Let’s plan for renewables to become progressively locally made, locally run, and locally owned. Let’s ensure that rural areas in the Eastern Cape have a regular stream of income from renewables. Let’s make sure that trade unions and civil society collectively own and run their own renewable cooperatives.