Jobs, Mpumalanga & death of coal: Switch to renewables will ensure future for the embattled province

With the world moving away from coal, the future of Mpumalanga hangs in the balance. It could become a region of ghost towns as coal mines and ageing power stations gradually close down, leaving thousands of people unemployed with few job options.

Or it could be reborn as a different kind of energy powerhouse, one that has been transformed to produce electricity from wind and solar power. A renewable energy hub, with associated industries, where many former coal workers are re-trained and absorbed into the clean, low-carbon technology.

This was one of the issues discussed by energy experts at the Windaba 2019 wind energy conference in Cape Town this week.

While the experts had no doubt that the transformation was possible, they warned that whether Mpumalanga was able to follow this path would depend on how quickly — and how effectively — the government could step up to the plate with policy interventions to attract the renewable energy sector to this region. The reason was that Mpumalanga is not an area where the best wind and solar resources are found. It would take government intervention to draw the private sector to the region.

If government does nothing, and the coal region is simply left to market forces, the experts say Mpumalanga is likely to face a grim future and the unions’ and coal workers’ fears are real.

The annual Windaba conference, which brings together the private sector, academics, institutions and non-government organisations, focused on how to “unleash” renewables for economic development in Africa.

This was in the context of a global energy transition from coal to renewables, which speakers said was already happening and described as “unstoppable”.

The energy transition is driven in part by nations wanting to cut carbon emissions in the face of climate change, but the main force is economic. In the past 10 years, there has been a massive drop in the costs of renewables, with the cost of onshore wind energy declining by about 70% and solar PV by about 90%.

In many countries, onshore wind plants and large-scale solar PV now provide cheaper electricity than new coal-fired power stations.

Mpumalanga is not alone in facing a dicey future: coal regions around the world are in a similar predicament and some governments have already taken steps to compensate coal workers where mines are to close.

Dr Tobias Bischof-Niemz, CEO of the renewable energy company Enertrag and former head of the CSIR’s energy unit, believes one way to help make the energy transition “just” in South Africa is for the government to have a regional solar and wind auction — or “bid window” — for Mpumalanga specifically.

Speaking on the sidelines of the Windaba conference, Bischof-Niemz said the Department of Energy’s Renewable Energy Independent Power Producers’ Procurement programme was basically an auction scheme. The government sets the rules for renewable energy companies, which then bid for the right to build solar and wind power plants and sell the electricity. Provided it meets all the other requirements, the company that can provide electricity at the lowest tariff wins.

“So any bidder will have to go to the areas where the sun is the best or the wind is the best to keep the tariffs low. Those are the rules of the game.

“But the government could say it will have a regional auction in Mpumalanga specifically, where the wind and solar are not quite as good. It will mean the electricity tariffs from wind and solar plants would be a bit higher than in areas where the wind and sun resources are better, perhaps by 10% or 20%.”

This slightly higher electricity tariff had to be weighed against the huge social and economic costs of not intervening, and watching Mpumalanga coal towns die.

Bischof-Niemz said some of the higher tariff would be recovered, as there would be no additional costs on the electricity distribution grid — which there would be for renewable energy plants in more remote areas — because the grid in Mpumalanga was well established.

“And you would reduce the socio-economic problems associated with the closure of coal mines and power stations. This would go a long way to achieving a just transition in the energy sector.”

Bischof-Niemz said Germany had begun a similar process in the coal region of Lusatia, converting it from coal to wind and solar.

Jesse Burton, a researcher at UCT’s Energy Research Centre, told Windaba delegates that South Africa was not the first country to go through the energy transition, but it would be one of the first developing countries to do so.

“We’re doing this with extremely high levels of poverty so the world is looking at us. If a coal worker loses his job in Mpumalanga he won’t find another job, so you are putting him and his family into poverty,” Burton said.

Workers did not want to hold on to their coal jobs because they wanted to work in coal, but because there were few other options.

“We need to think about industrial policy, which government has ignored. We need to communicate better. There are still people who don’t know that renewables create more jobs overall than coal. There are roads, railway lines and a skilled labour force in Mpumalanga. We need to get people out of coal mines and into a factory,” Burton said.

Burton agreed with Bischof-Niemz’s proposal to get government to be the catalyst for renewables development in Mpumalanga.

“You won’t address all of the job losses in coal through renewables, but you will address some. Renewables should be coupled with other low-carbon industries. People there don’t love coal. It makes them sick and the water filthy, so they do want alternatives. The economy is so fragile, we can’t let these jobs just fall away. Not all the coal plants will be closing at once, so there is time to start doing something, but we need to start now,” Burton said.

Researchers were working on the kind of industries that could be developed in Mpumalanga, especially around renewables.

In contrast to the declining cost of renewables, the cost of coal is increasing. Burton said in South Africa, the average price of coal increased by 300% between 2000 and 2015.

The International Renewable Energy Agency says information from its global database indicates that three-quarters of the onshore wind and four-fifths of the large-scale solar PV power plants due to be commissioned in 2020 will provide cheaper electricity than the cheapest new coal-fired, oil or gas power plants.

Mineral Resources and Energy Minister Gwede Mantashe, who opened Windaba 2019, said South Africa had to make sure it met its international targets to cut carbon emissions. The energy sector was responsible for 80% of emissions, of which 50% came from electricity generation and Sasol’s liquid fuel production.

“At the same time, we must ensure a just energy transition to avoid plunging the majority into destitution. Transition to a low-carbon economy must be sensitive to the potential impacts on jobs and local economies,” Mantashe said.

However, Mantashe gave no indication of who was to lead the just transition, nor what he envisaged or who would be responsible for ensuring it happened.

Wind energy developer Ben Brimble told delegates he believed the responsibility for managing the energy transition fell on the shoulders of government through the Integrated Resource Plan (IRP).

“In the draft IRP, I looked for the number of times ‘just energy transition’ was mentioned. Zero. Zero times… Until we have a plan by government we have no chance of moving forward. We need government to come up with a plan,” Brimble said.

It may be that the plan will have to come from civil society and taken to government, as Mantashe told delegates he wanted them to come up with solutions.

Although Mantashe assured Windaba delegates of government’s commitment to collaborate with the renewable sector, he added:

“Similarly, come forth and make your own commitment to find energy solutions to drive the economy. We are not going to stand there and stamp out directives. Come with ideas. We don’t want to hear you complaining.” DM