A dis isruptors view of f th the ju just energy tr transition Presentation to Nedbank/EE Publishing seminar “Unlocking the Just Energy Transition” 7 May 2019 RESUR GAM
What is the Just Energy Transition? Just transition was a set of practices lived by indigenous people and then co-opted by Labour to encompass a number of interventions to protect workers jobs and livelihoods and economies adapt to more sustainable models Just Transition policies For trade unions, “Just Transition” describes the transition towards a climate resilient and low carbon economy that maximizes the benefits of climate action while minimizing hardships for workers and their communities. Needs will vary in different countries, though some policies must be applied everywhere. These include: 1. Sound investments in low‐emission and job -rich sectors and technologies. These investments must be undertaken through due consultation with all those affected, respecting human and labour rights, and Decent Work principles. 2. Social dialogue and democratic consultation of social partners (trade unions and employers) and other stakeholders (i.e. communities). 3. Research and early assessment of the social and employment impacts of climate policies. Training and skills development, which are key to support the deployment of new technologies and foster industrial change. 4. Social protection, along with active labour markets policies. 5. Local economic diversification plans that support decent work and provide community stability in the transition. Communities should not be left on their own to manage the impacts of the transition as this will not lead to a fair distribution of costs and benefits. Project 90 by 2030 defines it as “ A Just Energy Transition is a transition towards a sustainable, low carbon and equitable energy system which is better for people and the planet than what we currently have – from coal-generated electricity to renewable energy (RE) sources such as wind and solar. The just component is to ensure fairness for workers in legacy energy systems where jobs might be at risk. As South Africa moves from a fossil fuel dependent energy mix to one that supports renewables, we have to ensure adequate resources are allocated towards planning for the socio-economic challenges that lie ahead. ” RESURGA Friday, 10 May 2019 2 M
What stakeholders say about JET… Government Business Labour Community JET is a core principle in the NDP Business believes that any energy Labour leadership want an In national decision making and particularly in Chapter 5 transitions to a low carbon energy mix where coal and the platforms, Community social … .without any plan. economy must be just state plays the dominant role in partners support that: energy provision 1. Coal must remain a significant part of the energy mix, just that it The imperative for a just energy The potential role that renewable must be clean coal Labour see it as the responsibility transition is now embedded in energy can play in 2. Eskom should ask for further of Government and Business to the ANC Manifesto without 1. Mine closure waivers on its non-compliance 2. Transitioning mining economies make concrete proposals on the explicitly stating targets with emissions limits post operational close. energy transition. Are social partners position on the energy transition just….. RESURGA Friday, 10 May 2019 3 M
… but how it gets lost in translation Government Business Labour Community Misalignment between Renewable energy economics, Labour membership know that Civil society, and particularly departments on approach to any Eskom instability and climate the energy transition (and its communities within coal decarbonization activism is driving Business to association with 4IR) is coming mining areas • DOE wants energy mix to include embrace renewable energy and their membership are not “fit 1. Want to transition from coal coal even if it drives up cost of for purpose” without significant 2. Mining trumps any alternative electricity over cheaper scenarios Ambivalent about climate change reskilling use for land • DMR wants mining sector to policy 3. Communities not consulted and increase investment in “clean omitted from decision-making • Standard Bank coal” 4. Communities are not being • Sasol • DEA wants to impose stronger educated or reskilled for the Institutional pension fund market environmental laws but allows future economy sends mixed messages Eskom & Sasol to exceed emission limits • Treasury has imposed Carbon Tax ...or just plain confused? RESURGA Friday, 10 May 2019 4 M
Observations Political and institutional inertia • We suffer holy cows gladly!! • Eskom Cognitive Dissonance Syndrome Exclusive consensus process • JET needs to be relevant to more than a unionized coal or Eskom worker No tangible plan • All macro. No micro • JET2JT needed RESURGA Source: World Economic Forum Friday, 10 May 2019 5 M
A disruptors view of the just energy transition The economics of renewable energy will dictate that it will become the mainstream (increasingly preferred) electricity generation technology within South Africa’s energy mix over the next 10 years Challenge of • coal incumbency • Political “command and control” economy mindset • Eskom • Policy and regulation • Energy transition that aligns future economic structure and skilled labour needed to participate in it The just energy transition should be a transition to a low carbon economy in a way that allows equitable participation and inclusive growth for all in the future energy sector, protects the vulnerable and provides the opportunity for current and future citizens to capacitate and adapt themselves to find dignified employment and embrace the modern global economy RESURGA Friday, 10 May 2019 6 M
Solar Industry Development Plan The SIDP is a solar industry plan for an implementable JET strategy through deploying large scale solar IPPs within targeted geographical area (in this case REDZs) 1. Establish REDZs in declining mining areas (an initial focus on coal and gold) a) Phase 2 REDZ process has shortlisted Witbank, Klerksdorp and Welkom as future zones) 2. Assign S.34(1) allocations for 5GW of solar PV to be constructed within mining REDZs over the next 10 years. Potential co-benefits of constructing 50 x 100 MW solar PV plants over the next 10 years Location Located in areas with • Low agricultural potential (mine affected land) • Strong Tx and Dx networks (effective recycling of grid investment) • Large un- and semi-skilled labour force • Levels of light engineering industrialization that could be transitioned to servicing RE sector Creation of zones that will have a strategic focus to transition away from mining towards a more mixed and green economy Strategic focus • Create renewable energy jobs for mine affected workers • Reskill workers, and educate the youth for a future green economic zone • Long term solar pipeline to give confidence to solar manufacturing supply chain to locate to mining REDZ • Allow for better coordination between stakeholders (IPPs, mining companies, all spheres of government) • Target ownership, SED, SLP and government budget for distressed mining towns in an impactful way. Plan will create a more meaningful value proposition for renewable energy in South Africa Friday, 10 May 2019 7
MINERALS RESOURCES Mass % World Rank Antimony Kt 350 16.7 3 Renewables within an integrated mining Chromium Ore Mt 5,500 72.4 1 transition plan Copper Mt 13 2.4 6 Fluorspar Mt 80 17 2 Gold T 6,000 12.7 1 Iron Ore Mt 1,500 0.8 13 Iron Ore – Incl. BC Mt 25,000 10 * Lead Kt 3,000 2.1 6 • The “crowding in” of renewable IPPs within defined Mangenese Ore Mt 4,000 80 1 geographical areas which are needing to go through transition Nickel` Mt 3.7 5.2 8 PGMs t 70,000 87.7 1 is actually intended to stimulate the finding of new solutions to Phosphate Rock Mt 2,500 5.3 4 the creation of new regional economies Titanium Minerals Mt 71 9.8 2 Uranium kt 435 8 4 • Avoid renewable energy needing to become a silver bullet Vanadium kt 32 2 • Establish different business models (microgrids, community owed Vermiculite Mt 80 40 2 IPPs) Zinc Mt 15 3.3 8 Zirconium Mt 14 25 2 • Use the availability of cheap renewable electricity • allied to battery storage to offer “RE 100% ” tariff • power RO plants to treat mine waste water • Waste to energy • Potential for green hydrogen / ammonia storage • Create an integrated transition strategy that can compound the impact of other initiatives in post-mining strategies. • Then to ensure proper policy sequencing to deal with skills retraining, industrialization and educational needs. Friday, 10 May 2019 8
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