Job-figure fantasies drain the power from national electricity plan hearings

Over the first two days of the public hearings on the draft Integrated Resource Plan (IRP) 2018 — the national plan for electricity infrastructure development — the Portfolio Committee on Energy heard presentations from a variety of stakeholders.

Unfortunately, the process — which promised to be a forum for engagement between the portfolio committee and civil society — did not extend beyond the presentations simply being made by stakeholders and heard by the panel.

While it was ostensibly a process for interaction with the public, not a single question was asked in the allocated Q&A sessions.

It seemed that the limited number of committee members who did attend, with representatives from the Department of Energy working on the IRP, had no interest in interrogating what was presented — specifically numbers presented as “facts” by various stakeholders.

The Minister of Energy, Jeff Radebe, was noticeably absent and bar a few comments from the portfolio committee chairman, it was a one-way street.

This is the first time in many years that the Energy Committee has held public hearings and, frankly, we expected more. The Energy Governance South Africa (EGSA) network consists of more than 80 concerned individuals and organisations dedicated to promoting good governance in the energy sector in South Africa. We ask what the point of the hearings were, if no interaction on the material presented was ever intended.

Analysis vs sales pitches

The 24 presentations delivered on the 16 and 17 October 2018 fell into two broad categories: Those providing general analysis and comments and those pushing a commercial angle.

The general comments came from non-profit organisations, research institutions and industry bodies. Those with something to sell included companies or associations for specific technologies such as wind, solar, storage, coal and nuclear. This duality led to several diametrically opposed stances, with new coal projects being particularly contested.

In terms of coal, the 1,000MW of new coal capacity for electricity generation in the draft IRP 2018 was fiercely opposed by the Centre for Environmental Rights, Greenpeace, WWF, Energy Research Centre andProject 90 by 2030. These objections were based on human health, environmental and climate change concerns — and were backed by reports that show how the proposed new independent coal power producers would lead to higher financial costs  to South Africa.

On the opposite end of the spectrum, General Electric — a steam turbine manufacturer for coal power stations (which made its sales pitch) want the coal allocation to be increased to 2,500MW. General Electric said that coal can be a flexible generator of electricity and can still be used while meeting our international emissions reduction commitments.

Unsurprisingly, those opposed to new coal capacity disagree with both these assertions, backed by data and research.

Professor Harald Winkler from the Energy Research Centre at the University of Cape Town displayed graphs showing how the two proposed independent coal power producers — Thabametsi and Khanyisa — will increase the costs of producing electricity in South Africa, based on their modelling.

In contrast, the General Electric representative said that coal costs have been overstated. It should be noted that General Electric are part of the consortium that wish to build Khanyisa.

So what should the decision-makers understand from these contrasting views? Surely a way to cut through the differing opinions is to assess what bias or vested interest each presenter represents? Every stakeholder has an angle, but is that angle aligned with what is best for the country and its citizens? Or is it best for someone’s balance sheet?

Many EGSA members have done analysis on what the best electricity plan for South Africa should be. The overall objectives are to find a plan that provides electricity at the lowest cost to the consumer, while meeting social and environmental metrics.

Out of this process come positions and recommendations regarding coal, nuclear, gas, renewable energy and other components of the electricity system. The key is that these views come as a result of an assessment process that prioritises the national interest, in contrast to views that have at their core a promotion of a particular product or service in the electricity sector.

In the end, the proportion of a particular technology in our energy mix should come as an outcome from a rigorous modelling process, not as an input to be justified by those with vested interests.

Questionable facts and figures

An important issue at the public hearings was the use of highly questionable figures in some presentations. Regardless of who is represented, or whether they stand to benefit financially, it is hugely problematic if unsubstantiated and unreferenced figures are presented at a forum like this and then not challenged or questioned by the portfolio committee panel.

Darrel Huff has authored the book How to Lie with Statistics. While much of this is about how to use reliable data to promote a particular view, there is also the issue of unreliable data to start with.

One presentation gave job loss figures as a result of implementing the draft IRP 2018. There were no sources for the figures they used, nor any explanation of how they were calculated.

The claim was that “The nuclear industry will see not less than 66,000 losing their jobs” and that “the coal industry will see not less than 35,000 people losing their jobs”.

This is quite extraordinary given that the nuclear industry is significantly smaller than the coal industry, and it is the coal power plants that will be decommissioned in the IRP planning horizon, not nuclear. The figure of 66,000 jobs should apply only to the section of the nuclear industry involved in electricity generation, as nuclear medicine and related research are not affected by the IRP.

Eskom not only runs our only nuclear power station, Koeberg, but also 29 other power stations. According to the latest Eskom Integrated report (31 March 2018), the entire headcount at Eskom is 48,628, including fixed-term contractors. So how did this presenter get to a number of 66,000, which is more than the entire staff component of Eskom?

In any event, since the draft IRP 2018 makes no recommendations or changes to the status quo at Koeberg, their “nuclear industry job loss number” should actually be zero.

An even more questionable figure provided by the same presenter was for job creation related to the proposed new nuclear fleet of 9.6GW in the 2010 version of the IRP.

The claim was that “9.6GW of nuclear has the potential to create 617,000 to 1.7 million jobs”. Again there was no indication of how this number was generated, but if you think about it briefly you will see that it cannot possibly be correct.

The latest employment data from Statistics SA (released in July this year) gives the official number of unemployed people of working age (15 to 64 year olds) as 6.1 million.

So to suggest the creation of 1.7 million jobs would imply that roughly one in four job-seekers from across the country could gain employment via a programme to build a few reactors, in one or two locations, that require highly skilled and trained personnel.

Viewed another way, 1.7 million jobs is almost twice the entire agricultural sector, or 7.6% of our total workforce.

By contrast, Koeberg, at 1.8GW (or about one-fifth of the size of the proposed new nuclear build) employs only 1,200 people and indirectly creates 2,600 additional jobs, according to the Eskom website.

A proposed way forward

Members of EGSA make the following recommendations regarding public input into electricity planning:

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  Those involved in the IRP finalisation process, and members of the portfolio committee should engage with the public when they present views, rather than being passive receivers;

  
  


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  Policy makers need to find a transparent way to deal with comments that come from a position of direct financial gain; and

  
  


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  There must be a way to identify and deal with misleading or incorrect information supplied by various stakeholders. DM