Presentation to 90 by 2030 Johannesburg 28 November 2017 - PowerPoint PPT Presentation

Renewable energy job statistics Presentation to 90 by 2030 Johannesburg 28 November 2017

Introduction IRP2016 update contains South Africa’s “energy transition” whichever • scenario we choose. – 27,5 GW of coal-fired plant planned to be decommissioned – Replaced by lots of renewables (“least cost”) or nuclear (“forced nuclear”) Challenge is that IRP doesn't ’ t consider socio-economic implications in its • calculations – The “jobs lost” and “jobs created” narrative only tells half the story • Coal miners don ’ t see any PV or wind farms in MPM • No coherent industrialization strategy whether we go mass renewables or nuclear • Can the current mining work-force be re-skilled for the 4IR? Try to set out some of the stats from South Africa’s experience in • renewables so far, and elsewhere in the world

South African tariff path Actual tariffs: new wind/solar PV 40% cheaper than new coal in RSA Results of Department of Energy’s RE IPP Procurement Programme (REIPPPP) and Coal IPP Proc. Programme Significant reductions in actual tariffs from the … have made new solar PV & wind power 40% RE IPP Procurement Programme (REIPPPP) … cheaper than new coal in South Africa today Actual average tariffs Actual average tariffs in R/kWh (Apr-2016-R) in R/kWh (Apr-2016-R) -59% 5 -83% -40% 4 3.65 1.03 Solar PV Wind 3 2.18 0.62 0.62 2 1.51 1.19 1.17 0.87 1 0.62 0.87 0.69 0.62 0 Nov Mar Aug Aug Nov Solar PV IPP Wind IPP Baseload 2011 2012 2013 2014 2015 Coal IPP Notes: Exchange rate of 14 USD/ZAR assumed Sources: http://www.energy.gov.za/files/renewable-energy-status-report/Market-Overview-and-Current-Levels-of-Renewable-Energy- Deployment-NERSA.pdf; http://www.saippa.org.za/Portals/24/Documents/2016/Coal%20IPP%20factsheet.pdf; http://www.ee.co.za/wp- content/uploads/2016/10/New_Power_Generators_RSA-CSIR-14Oct2016.pdf; StatsSA on CPI; CSIR analysis 8 Soure: Bischof-Niemz analysis

REIPPP job stats Preferred Bidders Preferred Bidders Economic Job Creation per Province (1) Development Solar Photovoltaic Jobs* during Jobs* during Province Construction Operations Bid Window 4 Bid Window 3 Bid Window 2 Bid Window 1 Period Period MW allocation 415 MW 435 MW 417 MW 632 MW Eastern Cape 1 848 5 611 Local Content Value R 4 319 R 3 698 R 4 943 R 6 563 Free State 30 30 (ZAR Millions) Local Content % 64,7% 53,8% 53,4% 38,4% Mpumalanga 149 1 947 Job Creation: Construction 3 825 2 119 2 270 2 381 Northern Cape 4 808 11 823 (Citizens) TOTAL 6 835 19 411 Job Creation: 9 273 7 513 3 809 6 117 Operations (Citizens) * 1 job = 12 person-months and 1 person-month = 160 working hours (1) Jobs for RSA Citizens 25 22 Preferred Bidders Economic • Has created 31 207 job-years since Development inception for SA citizens Onshore Wind • SED contributions of R357,4m & ED Bid Window 4 Bid Window 3 Bid Window 2 Bid Window 1 contributions of R115,2m MW allocation 676 MW 787 MW 563 MW 634 MW Local Content Value R 5 146 R 6 283 R 4 817 R 2 727 (ZAR Millions) • Carbon emission reductions of 15,4 Local Content % 44,6% 46,9% 48,1% 27,4% Job Creation: Mtons CO 2 since inception Construction 2 831 2 612 1 787 1 810 (Citizens) Job Creation: 8 161 8 506 2 238 2 461 Operations (Citizens) 26

Non-REIPPP job stats • Delays in REIPPP resolution on R3,5/4/4,5 has seen this market shed manufacturing jobs • Eskom (and municipal) tariff increases and falls in solar & wind tariff has triggered rise of rooftop PV installation • Unregulated and hence difficult to pin down accurate job statistics • How large potential market going forwards for both creation of Black Industrialists and local manufacturing EPC EMBEDDED PV The Rise of Rooftop Solar PV Project Size kW Time - hours Employees Person Hours Person Years Person Yrs / MW VS REIPP PV Project 1 5000 960 25 24000 12.50 2.50 Most efficient JOB INTENSITY Project 2 1150 460 30 13800 7.19 6.25 less efficient • PQRS estimate as at November 2016 is Project 3 1000 640 15 9600 5.00 5.00 More efficient Project 4 1100 800 15 12000 6.25 5.68 ~ 280MW of rooftop PV capacity Project 5 784 523 20 10453 5.44 6.94 • SAPVIA ‘legally’ registered installations as Employment / Project 6 550 367 20 7333 3.82 6.94 at August 2016 is ~ 38MW MWp Project 7 666 444 20 8880 4.63 6.94 Project 8 380 253 20 5067 2.64 6.94 Per Year Project 9 340 227 20 4533 2.36 6.94 Project 10 57 240 8 1920 1.00 17.54 More Jobs Residential 3 16 4 64 0.03 11.11 More Jobs PV Embedded 7.53 REIPP 4.56 65% more O&M � Uncertainty of capacity = Total kW O&M Employees Person Hours Person Years Person Years / MW uncertainty around number of Solar PV O&M - 1 12000 Direct 10 1920 10 0.83 current jobs 12000 Indirect 10 1920 10 0.83 20 3840 20 1.67 � hinders the planning of future Solar PV O&M - 2 10000 Direct 3 1920 3 0.30 skills needs and employment 10000 Indirect 5 1920 5 0.50 estimates! 8 3840 8.00 0.80 PV Embedded 1.23 REIPP 0.59 104% more

Job creation stats (Shell/DOE/McKinsey deep-dive 2014) Localised at 5GW Potentially localisable - Easy Potentially localisable - Collaboration Potentially localisable - Significant investment Do not try Potential jobs (Direct 1 ) 28,513 27,190 24,745 Capex Job years per 8,724 GW 6,401 4,681 installed 2,542 826 133 127 119 107 Opex Annual 60 49 jobs per 32 28 TWh Solar PV Solar CSP Onshore Nuclear 2 Coal 2 CCGT 2 Coal mining Shale gas 3 Wind

Global growth in deployment of solar & wind World: In 2016, 124 GW of new wind and solar PV capacity installed globally Solar PV Global annual new capacity in GW/yr Wind 124 120 91 57 70 76 73 71 40 56 31 30 38 Total South African 46 17 power system 7 33 (approx. 45 GW) 63 22 7 54 17 51 45 3 41 39 13 39 35 8 9 9 2 7 27 1 4 20 1 1 7 0 15 0 12 0 8 8 7 4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 This is all very new: Roughly 80% of the globally existing solar PV capacity was installed during the last five years Sources: GWEC; EPIA; BNEF; CSIR analysis 3 Soure: Bischof-Niemz analysis

Global stats Global RE sector employed 9,8 million people in 2016 – 1,1% • increase over 2015 Solar PV is the largest employers. • In stark contrast with coal industry jobs which saw major • decline in China, India, Europe and USA due to closure of power plant closure, overcapacity and mining mechanization . Global oil & gas facing similar pressures due to low prices • and oversupply

The energy transition IRP 2016 Update envisions the closure of 27,5 GW of coal fired plant by • 2040. The consequences on the economies seem to vary – Loss of up to 30 000 Eskom and associated supplier jobs (CTF February 2017) – Estimates of between 60 - 65,000 job losses in the coal mining industry up to 2040 However maintaining the status quo on Eskom operations will have • consequences to job statistics in South Africa – Up to 47,000 jobs at risk if Eskom gets 19,9% increase (COM, October 2017) No strategic plan for reskilling at present • Too simplistic an approach to expect renewable energy to be the silver • bullet – Eskom price path is an effective job killer no matter how much excess capacity is available – Renewable energy’s most powerful economic enabler is unlocking parts of the economy through low prices and flexibility