CONTRIBUTORS
INCORPORATING COLD CHAIN
South Africa ’ s energy transition Franziska Müller , professor of global climate governance , University of Hamburg
It ’ s never been easy to categorise South Africa ’ s energy policies and the transition package is still in green and brown camouflage .
While the country has been eager to excel in global climate diplomacy , being both a UN Framework Convention on Climate Change conference host and a Pan-African voice amplifying the call for western historical responsibilities , South Africa ’ s domestic climate and energy policies have been less outspoken .
Long-standing path dependencies , labelled as the “ minerals-energy complex ”, have resulted in a conglomerate of mining industry , national banks , and the notoriously indebted energy monopolist Eskom . Although South Africa was an early adopter of clean energy policies , only its highly credited energy auction instrument finally turned the tide , by adding more than 5GW of clean energy to the national grid .
But this move was met with reluctance . This resulted in Eskom blocking grid access to dozens of renewable energy providers in 2018 . South Africa ’ s energy transition shows signs of progress . But due to its market-driven impetus , the country can ’ t create green jobs in provinces such as Limpopo or Mpumalanga , where coal mines will close and put approximately 90 000 workers at risk .
And while more than 59 000 green jobs have been created , their healthier labour conditions aren ’ t met by wages that equal those in the coal industry . This is why trade unions watch the transition process with less enthusiasm .
THE COP26 RESULTS On the road to Glasgow , South Africa had already underscored the need for a “ just transition fund ”, which would tap western financial sources and pave a way out of coal . Indeed , during the first COP26 days , a just transition partnership was announced as one of the most powerful commitments of the international community . The US , Britain , the EU , France , and Germany mobilised USD8.5billion ( about R131 billion ) in concessional loans and grants to be channelled via multilateral development banks within the next three to five years to finance South Africa ’ s decarbonisation .
Yet at the same time the South African delegation to COP26 joined forces with India and China , demanding that one of COP26 ’ s central statements regarding decarbonisation should ‘ phase down ’ but not ‘ phase out ’ coal . This slight change in wording profoundly weakens the political ambitions and undermines political consensus on decarbonisation . Phasing out would demand a rapid decarbonisation of the economy , including the whole value production chain . Phasing down would opt for a much slower coal exit .
In general , the finance instrument builds on the cheap pricing of clean energy and considers coal assets as too risky .
Bence Balla-Schottner | Unsplash
The just transition partnership with South Africa is the first of its kind . It uses an innovative instrument , the Accelerating Coal Transition facility , which was designed by the World Bank ’ s Climate Investment Fund . It will target energy governance , mining communities ’ needs and infrastructural demands .
THE DEAL SO FAR While the details of this particular partnership have not yet been laid open to the public , several points give an impression of its direction and aims :
• Support Eskom to decommission coal power stations and replace them with greener stations . This sounds like a solution to the pending transition risk , with Eskom planning to remove 22GW generation capacity from the energy system by 2035 . But while Eskom is indeed turning to renewable energy , not least to avoid financial risks , this conversion still includes erecting new coal power stations . These are less carbon dioxide intense but prolong the carbon economy . It ’ s also unclear whether gas is considered as a ‘ bridge technology ’.
• Strengthen private investment in renewable energy . This could foster energy auctions and competition in the energy market . But the current auction scheme has resulted in uneven renewable energy development . Enhanced competition may be detrimental for renewable energy
The just transition partnership with South Africa is the first of its kind .
projects with high public ownership . A transformation driven by the accelerating coal transition instrument may increase financialisation ( the dominance of private and transnational interests over South Africa ’ s energy sector at the expense of public and domestic interests and needs ).
• Strengthen investment in green hydrogen . This closely matches with Germany ’ s and the EU ’ s geopolitical interests , as their hydrogen strategies consider South Africa a target country for producing and exporting hydrogen . Still , a hydrogen economy is projected to materialise only around 2050 , as the technologies for producing and transporting hydrogen are still in prototypical stage and are currently subject to massively subsidised research .
• Decarbonising value chains and converting brown jobs into green jobs . This is a strong commitment to a just transition , which may indeed bring social security to the mine workers at risk . It may also enhance political stability . Still , this also targets South Africa ’ s political sovereignty , especially as social welfare issues such as job conversion – a centrepiece of public governance – become subject to the way green funds work .
Overall , this kind of partnership is laudable as far as it may support South Africa in overcoming its huge transition risk and in
stabilising social peace . The move towards job conversion is remarkable , as a just transition scenario needs to reflect the social situation of mine workers and go beyond cheap talk .
To live up to this , government must foster strong cooperation with trade unions . Yet the managerial language of the accelerating coal transition instrument tells a different story , as the main aim is to ‘ de-risk ’ energy governance , social tensions , and infrastructural challenges . This managerial language makes greater cooperation with trade unions difficult . In this regard the package is a win for the minerals-energy complex , which will receive lavish support to transform its business model . The next year will tell what emerges .
Source : Republished from The Conversation : Africa under creative commons licence .
Phasing out would demand a rapid decarbonisation of the economy , including the whole value production chain .
40 www . coldlinkafrica . co . za COLD LINK AFRICA • May 2022