Workshop on IRP and access to energy

Workshop on Integrated Resource Planning and access to energy – Outcomes

Representatives of organised labour and community-based organisations met for a two-day workshop on 23 and 24 February 2017, convened by the Alternative Information and Development Centre (AIDC). A series of presentations provided an overview of the energy sector and recent developments, including planning documents published for public comment, and a broad range of issues and aspirations were discussed. This text constitutes the report on the workshop and is arranged according to the degree of agreement amongst participants, starting with objectives which all will work towards, as confirmed in the final plenary session.

Participants at the workshop committed to working for:

De-corporatisation of state-owned enterprises, most urgently Eskom; also PetroSA and Transnet;

• This should include returning to the pre-corporatisation structure of an inclusive Council of a Public Enterprise with stakeholder participation, instead of a Board accounting only to ‘shareholders’, and removing the imperative to generate profit or pay dividends, through promulgation of a renewed mandate in the Government Gazette; meaningful participation is required in the decision-making regarding public enterprises, not simply consultation on relevant documents or proposals.

Addressing the class interests built into the South African energy system and its dependence on extractive industries in the service of monopoly capital, and how class interests may be better served through transformation to a renewable energy system with energy democracy;

Implementation of climate change response policies and measures to reduce greenhouse gas emissions with the ambition and urgency required by the international commitment to keep global warming well below 2 degrees, with efforts to avoid warming of 1.5 degrees;

Recognition of the adverse impacts of coal mining and use on local communities, as well as on water and food security, and the gender dimensions of energy system impacts;

Directing state resources to develop local industries in the energy technologies most appropriate and affordable for bringing power to the people, particularly renewable energy, and ensure that workers, communities and households are empowered and enabled to share in the benefits of the steep decline in the costs of solar PV and storage technologies;

Stopping the nuclear procurement programme[1];

Raising awareness of and building capacity to realise the opportunities for energy democracy, with decentralisation and participatory governance, to advance social ownership in the energy sector and universal access to sustainable energy services;

Addressing land tenure and ownership issues and the constraints that lack of tenure and land rights place on affordable access to sustainable energy opportunities [as well as service delivery in general];

Raising awareness of the threat or risk to publicly owned electricity transmission and distribution infrastructure by the arrival of ‘grid parity’ – the convergence of the declining costs of stand-alone electricity supply options, such as solar PV, with the rising cost of grid-supplied electricity – that makes it affordable for the affluent (commercial and residential consumers) to opt out of the public/centralised electricity supply system, which is already inadequately maintained;

Programmatic capacity building within local government to support and fund localised renewable energy initiatives, including solar PV, wind power, micro-hydro and biomass projects, especially bio-digesters for biogas production;

Municipalities to capacitate and enable citizens for project development in the sustainable energy sector, for local job creation and local social ownership, including establishing co-operatives;

Local Integrated Development Planning being more accessible and participatory and explicitly addressing energy issues and access to electricity;

Meaningful participation for stakeholders in Integrated Energy Planning (IEP), covering the entire energy sector, and the development of sector-specific plans including the current Integrated Resource Planning (IRP) process for electricity supply, as well as supply-side strategies for other energy carriers including the Gas Utilisation Master Plan (GUMP), Liquid Fuels Investment Strategy and the SA Coal Road Map; this must include engagement in decision-making on the actual plans that are proposed, e.g. the ‘Policy-Adjusted Plan’ that will be the product of the IRP process;

Constraints on renewable energy being removed from the IRP base case and technology cost assumptions being corrected to reflect costs prevailing in the South African energy sector;

Transparency and accountability, particularly on the part of Eskom and other public enterprises and including full disclosure of the operational status and prospects of Eskom’s existing generation plants and evaluation of the potential costs and benefits of early retirement versus refurbishment with full compliance with environmental standards (especially air quality standards).

Increasing the allowance for Free Basic Electricity (FBE) and Free Basic Alternative Energy (FBAE) and ensuring that such provisions are implemented for all households;

Fair and transparent electricity metering rules and practices, including easily understood tariff and billing information for households;

The enforcement of provisions for Free Basic Electricity (FBE) and Free Basic Alternative Energy (FBAE) to all poor households and increasing the amount of energy to be provided as a basic right;

Building unity amongst civil society organisations, including developing common advocacy and mobilisation strategies and undertaking public education.

Some key observations:

Both Eskom and the Department of Energy (DoE) have recently stated that South Africa has an excess of generation capacity. There is therefore no need to push the Integrated Resource Planning (IRP) process for electricity supply through before it has been informed by and aligned with a coherent Integrated Energy Plan – a plan that has considered an expanded role for electricity, for replacing use of liquid fuels, and clearly identifies priorities and choices, rather than the current all-inclusive and aspirational 24-page list of recommendations, within which competing objectives and strategies have not been reconciled.

Renewable energy opportunities should not be treated primarily as business opportunities, but understood for the full social value that can be derived from inclusive development with pro-poor government support. Renewable energy can be peoples’ power, but may not be if it is only supported as an opportunity for the private sector.

The National Energy Regulator is not sufficiently independent or pro-active in championing the people.

Communities in coal-mining areas, bearing the greatest burden of externalised costs of coal use (air and water pollution, road damages etc.) must not be cut off from electricity supply; It is unacceptable to deprive communities of basic services collectively to penalise municipalities – a more focused and just approach to Eskom debt collection is required;

The National Household Energy Strategy should be reviewed in light of recent shifts in technology costs, as well as the recognition in research[2] commissioned by government that “a dedicated off-grid management authority… needs to be established.” Currently budget allocations of about R20 billion annually for Free Basic Electricity pay for coal-fired power generation, while about R150 million is allocated to off-grid access to electricity.

Local Integrated Development Planning (LIDP) is the official platform for citizens’ engagement with local government on planning for service delivery, with statutory requirements for participation and transparency, but is widely treated as no more than a bureaucratic exercise. We need to raise awareness of the opportunities for public participation and holding officials accountable (e.g. IDP managers), get copies of the latest IDPs, demand more accessible and inclusive meetings and use the processes to promote decentralised renewable energy development and address barriers such as lack of land tenure.

Public education initiatives on the basics of energy and electricity are required, including making public documents easier to understand.

The role and responsibilities of SALGA need to be clarified, including the oversight functions[3], and opportunities explored for a more pro-active role in energy governance and building capacity for community-based energy access initiatives.

Cooperatives can be severely undermined by opportunistic members and good governance is a serious challenge – it is better to build on groups with a history of collective/cooperative action, such as stokvels or goyi-goyi, than for new cooperatives to be formed at the invitation of other agencies (e.g. government, donor organisations or IPPs).

Mini-grids for remote communities must be included in plans to accelerate universal access to electricity, to be integrated within national electricity distribution planning –access should not be restricted to proximity to centralised electricity system and mini-grids should enable social ownership and localised development.

The distribution grid must be strengthened and managed as a public resource, with smart grid technology and two-way metering, including as ‘surrogate storage’ for community-based projects and household energy systems, with incentives for decentralised and renewable energy development.

We need to push for standardisation of renewable energy technology offerings to facilitate local level interventions being widely rolled out with programmatic support;

Proper stakeholder consultation is required in clear and simple language to ensure meaningful and empowering engagement of the working class, incl. in Local Integrated Development Planning;

There is considerable potential for the small-scale use of hydropower generation (micro-hydro) from natural water courses, especially in the Eastern Cape, as well as within water transfer schemes, that deserves dedicated attention and support.

Some points of on-going discussion:

Participants will seek more information on the scale and significance of Eskom’s ‘excess’ generation capacity, or surplus of capacity, to inform discussion of what it means for investment planning and mega-projects such as the proposed nuclear build programme, as well as increasing local manufacturing through South Africa’s nascent [young] renewable energy industries. There should be recognition of ‘suppressed demand’, most importantly of energy service needs that are not being met due to poverty; using energy consumption at the point of use as a proxy for demand ignores the causes of decreasing ‘demand’.

There are problems with electricity transmission (and 40% of distribution) being controlled by the same corporate board as Eskom generation. There is a need for the transmission system to be managed independently of generation and to be accountable to a public mandate. There was some support for separation of generation and transmission into two separate state-owned enterprises under different departments, countered by the suggestion that if Eskom were de-corporatised and managed in the public interest and with proper oversight, then separate utilities should not be necessary.

The introduction of independent power producers (IPPs) in the electricity supply industry (ESI) and issues of ‘liberalisation’ or privatisation have extensive over-lap with the opportunities and challenges of decentralisation of electricity supply and what is understood by social ownership [of the means of production]. The local economic development (LED) and empowerment obligations imposed on IPPs through the procurement programme are a positive attempt to address these issues, but they are problematic for the way they are handled, including the state handing over development responsibilities to private sector entities, and their vulnerability to capture by patronage. Much more must be done, including by workshop participants and by government, to inform people on energy issues, empower communities to engage both authorities and IPPs and to ensure broad-based participation in sustainable energy development.

NEDLAC (the National Economic Development and Labour Council) is identified in DoE documentation as the key forum for stakeholder engagement on energy plans, but does not provide for transparent process or publicly communicate activities and processes undertaken; the Community Constituency – a number of ‘representatives’ that are provided for in the Trade and Industry Chamber – is unknown to workshop participants and apparently inaccessible. It is not clear if anything more than going through the motions of consultation can be achieved at NEDLAC or the extent to which organised labour is being represented and is capacitated to challenge bad decisions.

A large proportion of households without access to electricity (or in some cases no formal access) are in informal settlements in urban areas where an electricity service will never be provided, but where interventions that improve living conditions are nevertheless possible, including simple low-cost measures such as installing ceilings for insulation and micro-finance for small-scale solar PV appliances. In the face of a variety of practical challenges on the ground and on-going shortfalls in state service delivery (increasing in some areas due to urbanisation), idealism or ideological considerations should not be a barrier to pragmatic solutions, short-term opportunities or interventions to support self-reliance.

Persistent neglect of rural and marginalised areas [particularly areas formerly designated as ‘homelands’ by the apartheid regime] makes it very difficult to retain skills and capacity in such areas, e.g. for maintenance and servicing of local and decentralised energy infrastructure. Interventions in such areas need to take account of the dynamics driving urbanisation and the aspirations of entrepreneurial individuals, as well as gender issues, with particular attention to retaining skills and value developed locally; this may mandate prioritising women and mothers as beneficiaries of training, even when they are not the most readily/easily available for participation.

It is unacceptable for government to write off electricity-supply debt from neighbouring countries (e.g. Zimbabwe), but not South Africans – municipalities or communities – especially when Eskom has surplus generation capacity.

Regional options for large-scale hydropower, including cooperation with the Democratic Republic of Congo, need to be better understood, including their potential greenhouse gas emissions (methane from big dams).

We need to do more to expose vested interests and private agendas behind big infrastructure spending.

Thanks to the Friederich Ebert Stiftung (FES) for funding the workshop

[1] Nuclear power procurement cannot be justified in terms of energy demand, electricity demand or integrated resource planning for electricity supply. It is a procurement proposition for which there is no need, that would impose enormous risk to the national economy and fiscus and crowd out investment in a modern and decentralised electricity system increasingly drawing on renewable energy.

[2] Aitken et al, SUSTAINABILITY OF DECENTRALISED RENEWABLE ENERGY SYSTEMS (undated, but clearly finalised in 2015) commissioned by the Department of Environmental Affairs; the study notes that such an authority had approval within the Department of Energy.

[3] A recent resolution was adopted by SALGA on energy – need to look at that.