Eskom’s poor performance over the past 15 years has not only intermittently plunged SA into darkness; it has also radically inhibited the country’s economic recovery since the 2007/2008 global recession and has had a profoundly negative effect on citizens’ sense of wellbeing and trust in the state.
In such an environment, the plans the government and Eskom have announced to fix the crisis — without ever been seen to fix anything — have over the years been met with increasing scepticism bordering on downright disbelief.
However, despite the renewed series of debilitating scheduled blackouts announced by Eskom this week, there are reasons to be hopeful that we are heading in a better direction towards energy and environmental sustainability.
To say that Eskom has been stung into action would be to wildly exaggerate, but the convergence of factors including the gravity of the economic crisis, incentives to fulfil the country’s global carbon emission obligations, and the prospect of further electoral tilt in 2024, appear to finally have begun to rouse the governing party and the state.
The president’s three-pronged energy management plan, announced six weeks ago, mostly makes sense. It seeks to fix infrastructure, cut red tape and unnecessary restrictions and increase renewable energy generation. The proof of the pudding will be in the speed and efficacy of its implementation.
The EU and UK team, known as the Just Energy Transition Partnership, has confirmed an $8.5bn guarantee to help treat our dependence on coal. This financial injection, which is not expected to be the last, will contribute to positioning SA as a renewable energy investment hotspot.
Big deal
Regarding the power of democracy and political expediency, the governing ANC’s electoral majority has been declining, and its ability or inability to be seen to be making a difference to the electricity crisis over the next two years will be an important factor in the next election. It dare not let more grass grow under its feet.
The announcement of a partnership between Eskom and the Cape Peninsula University of Technology to reskill workers at the Komati Power Station, which is due for decommissioning, is a big deal. It is the first tangible social intervention in the just transition from coal to renewable sources of energy.
In 2015 it was estimated that about 80,000 South Africans worked in the coal industry. There would be no justice in the transition if these workers were left behind and the promised localisation of the renewable energy industry abandoned.
While it is arguably understandable that the urgency of stabilising the energy grid has led to a reduced emphasis on so-called localisation, the state will face increasing resistance to the transition to renewable energy from the coal sector if it fails to get the reskilling of coal industry workers under way.
If developing a local renewable energy industry is prioritised, Eskom’s announcement of the Komati workers’ reskilling partnership could be the first step in the creation of up to 300,000 new jobs, on top of those held by reskilled coal workers.
If the state delivers on its plans and commitments with speed and dexterity, it has a huge opportunity to fix the crisis, begin to restore citizens’ trust and take the first steps towards developing a social compact.
Tax incentives
But it’s a big “if”. Take the plan to double solar and wind generation from 2,600MW to 5,200MW. This doubling of the clean energy supply falls under what is known as bid window 6, but we haven’t yet managed to implement even half of bid window 5. The president promises quicker delivery, but the state’s track record of undelivered energy crisis fixes does not inspire universal confidence.
Incentivising the mass production and installation of solar rooftop energy systems is obvious given that SA harvests just a tiny fraction of its sunshine. The energy crisis plan aims to up this game through tax incentives and a tariff system for those who already have their own energy supply. To balance these transactions, the government will buy any available excess power.
This holds the promise of a win-win, but it would make sense to go a little further, by making solar installations VAT free. This would result in lower costs for consumers and would incentivise investment in solar generation equipment.
To address the affordability to homeowners, businesses and industry of installing their own energy generation systems, SA must make so-called Pace (property-assessed clean energy) loans accessible. The US is using this model to ease its transition, with $3.4bn in loans already implemented. A loan system is important because it makes the transition to renewables immediately implementable rather than being considered futuristic.
The stakes are sky high. Given the fluid state of SA’s politics, fixing the energy crisis is an enormous opportunity for the ANC to convince citizens it retains some worth. Failing to stem the crisis could well sound its death knell.
SA has close ties with China and India (two of our Brics trade partners), both of which are miles ahead of us in the clean energy transition process. We should be leaning on them for technical advice and expertise. Though they operate far bigger and stronger economies than ours, the scale of their achievements is remarkable. China, the global leader in renewable energy generation, aims to export $100bn worth of power by year’s end.
While we are looking at doubling up to 5,200MW after bid window 6, India is already producing about 1,700GW of power through a combination of solar (750GW), wind (695GW) and hydro (211GW) — and even producing 45GW from bioenergy alone.
We aren’t just falling behind with our transition; we have yet to emerge from the starting blocks. Most South Africans live without a reliable and safe energy source, and many still struggle along in candlelit semi-darkness.
The expression that big crises come with big opportunities surely applies. Opportunities for citizens, industry, the economy and the polluted earth. Opportunities to show despondent people that — despite their hope having been radically eroded by the state’s ineptitude, maladministration and corruption in recent decades — there is a chink of light at the end of the tunnel.
• Herron, MP, is secretary-general of Good.
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