Quick roll-out, consumer levies and retraining of staff are key to ensuring green economy benefits all in SA
To put the 8-million international jobs in renewable energy into a local context, the Department of Energy’s December 2016 Overview of the IPPPP (independent power producers procurement programme) report lists 29,000 person years of jobs having been created. This is in building only about 3,000MW of the perhaps 150,000MW of renewables ultimately to be constructed in SA. By 2030, in an aggressive scenario, we might have built 50,000MW.
It is thus safe to say that the country can absorb coal workers — or the equivalent numbers of retrenched workers — into a rapidly growing renewable energy sector in the years leading to 2030.
Then, the "one dollar" question: can we afford it? ("One dollar" because we so clearly can). If we assume 3,000MW of new renewables projects being procured annually, those supply chains will already absorb many. But the power we buy will be costing perhaps 20c to 30c/kWh less than Eskom’s average selling price of electricity and perhaps 40c to 50c/kWh less than new power from the Medupi and Kusile stations.
If we decide to add a 2c/kWh "low-carbon transition levy" to the electricity price of new projects in the renewable energy independent power producer procurement programme, to be recovered from the consumer, huge amounts of capital would be leveraged.
Let’s do the maths: the 3,000MW would produce perhaps 8,000 gigawatt hours of electricity a year. A levy of 2c/kWh would yield more than R160m in year one, in excess of R320m in year two, and more than R2bn per annum by 2030.
This is clearly sufficient to support former coal workers while we retrain them in renewable energy and other aspects of the green economy, should they be willing.
The South African Renewable Energy Business Incubator works to support and build capacity for smaller businesses that are responding to opportunities in this space.
From the consumer’s perspective, paying this levy is still an incredibly good deal. The risk of huge cost overruns at megaprojects such as Medupi, Kusile and Ingula would be retired for good, as would the need for the country to "pay as you go" on building new power plants. Capital would be sourced from the private sector and the country would only pay for electricity when it is connected to the grid and producing. Over time, the cheap renewables would abate the trend of steeply increasing electricity prices, eventually halting it.
A deliberate attempt to ensure the wellbeing of the coal workforce will create additional political capital and impetus for the transition. Indeed, creating a green economy was a fundamental consideration in the National Economic Development and Labour Council when the decision was made about seven years ago to create the progressive Green Economy Accord between the government, business, labour and civil society and to roll out the renewable energy independent power producer procurement programme.
There are many ways to make a mindful transition to a low-carbon future; it is for us as South Africans to decide collectively how best to do it. What matters is that it makes sense, that we have the capacity and that however we may structure the finances, the benefits are far greater than the cost.
SA has blazed an international trail in combining renewable energy development with sustainable development. It is often said that the latter is a "people-planet-prosperity" triangle. We have the chance to be a global pioneer again in the way we care for and redeploy workers in the coal sector. They deserve it, and we can afford it. This is an occasion where we can all win.
• Van den Berg is a member of the Ministerial Advisory Council on Energy. He writes in his capacity as team leader at Skrander.
Source Business Day