Project 90 by 2030, an environmental NGO working on energy and climate change issues, in collaboration with the Catholic Parliamentary Liaison Office (CPLO), a bridge between church and state, hosted a roundtable discussion that brought three energy sector stakeholders together. These were organized labour[1], Wind energy industry (SAWEA)[2] and civil society organisations (CSOs)[3] . The dialogue was on the hotly contested issue of ownership within the energy sector. This topic falls under the bigger umbrella of a Just Energy Transition, a theme that we all will be seeing more and more of as South Africa itself undergoes a transition from fossil fuels to other more environmentally friendly and sustainable energy sources.
The discussion had two parts to it. The first part dealt with the concept of a Just Energy Transition; whether it was necessary and why and what the stakeholder’s contribution to the transition is to date and will be in the future. This gave everyone insight as to how important this topic is to the stakeholders and the energy and resources they are willing to invest into it. It also opened up the opportunity to find common ground early on in the discussion.
As was expected, each panellist found that the transition is necessary. This comes as no surprise as COSATU released a statement to that effect several years ago and global trends relating to decrease in demand for coal has had an impact on their main membership. Project 90’s main objective as an organization is to assist South Africa transition to a low carbon economy and SAWEA has business interests in having more investment into renewable energy. The contributions made in order to assist the transition varied between stakeholders.
Prior to this event, COSATU lodged a section 77 notice with NEDLAC declaring their intention to protest, chiefly against privatization of the RE sector, continuation of the independent power producer’s program, the closure of several coal fired power stations without any reskilling of workers who would lose their jobs and the lack of a just energy transition plan by government. COSATU is seeking to force the government, the biggest stakeholder, to the table to engage on issues surrounding the transition i.e. the socio-economic impacts of transitioning. This step is of greatest importance to all stakeholders for various reasons. To the RE industry, this could potentially scare off potential investors, change the various laws and policies applied to the industry and/or pressure government to look at the transition and redouble efforts into the RE sector. To CSOs, the move presents an opportunity to force engagement on the just transition plan and increase their influence on policy making. They are taking the Department of Economic Development, Department of Energy, ESKOM, the Presidency and the Department of Environmental affairs to task about the transition. Mrs. Mulaisi made it clear that we need “an energy transition that reconciles human material needs and environmental needs, the one does not go without the other.”
She also reminded us all not to be misled by the propaganda where one energy source is pitted against another. “It is not a coal vs RE debate. The social economics are important, we need to take the challenges of the transformation into consideration.”
SAWEA indicated that the RE industry is under heavy pressure from all sides; heavy regulations (not imposed on the fossil fuel industry) that must be abided by before power purchase agreements (PPAs) are even considered, delays in signing the PPAs by ESKOM, lenders running out of patience with the delays, pending section 77 negotiations and court cases. Ms. Martin has confirmed that despite these cumulative threats, the RE industry is taking a long view: “RE companies are protecting jobs. Even though RE companies are under a lot of stress, very few have been forced to close their doors, companies have helped one another”, and protect the prospects for a nascent industry that has yet to firmly establish itself in the country. Ms. Martin also echoed the same sentiments of Mrs. Mulaisi regarding the misleading rhetoric that this is coal versus RE. “It is not one vs the other. This is about transitioning from one to a greater share of another. Energy transition is needed, it must be fair and just, taking due care of the poor, moving from something that is not too great to something better. The just transition is about changing systems not technologies.”
Mr Halsey summed up CSO’s contribution to hosting events that bring stakeholders together to talk on issues about the transition, doing research on those issues to fully explore the complexities of a transition and creating awareness in the media about the transition.
What was incredibly refreshing was the very candid manner in which the very central problem with the stakeholders present and government was brought to light by Mrs. Mulaisi. All stakeholders have not been communicating and collaborating well with each other. There is a lack of trust and, at least from labour’s perspective, confusion as to who to believe. Statistics and information is being provided by various parties and they all seem to be conflicting, or utilized in such a way as to misdirect focus away from the real issues.
On the issue of ownership, the panellists had very varied responses to what their understanding of ownership was in the RE sector. COSATU believed RE IPPs are all privately owned. Furthermore, they believe that the companies are not worker controlled. Mr. Halsey reminded us that the topic of ownership is very broad, and can be applied through the value chain: from raw materials, resources, land and infrastructure to shares in a company. It is more nuanced and varied than it is often portrayed. There are many ownership models out there and we should learn from other cities and countries as to how we can diversify ownership within the energy space. It is not, he cautioned us, “a simple case of private versus public ownership”. He further advised against automatically associating concepts with terminology. The term ‘Independent Power Producer’ needs to be differentiated from the assumption of private ownership and profit maximization: being independent of Eskom does not preclude social ownership or alternative income distribution models. These distinctions are important in avoiding misunderstandings as to what each stakeholder views as the real issues.
Ms. Martin shed much needed light on what is actually happening on the ground in terms of ownership. There are different types of ownership in the RE industry: equity shareholding, lenders with ownership via debt contracts and community ownership (in the form of trusts). She shared her experience of being the director of a wind farm project initiated by OXFAM that would have had direct household ownership. This project has been a casualty of the impasse with Eskom – Just Energy (the Oxfam project) has had to sell off its ownership as it could not survive the ongoing delay in PPA conclusion. In the meantime, the households who would have benefited from the first Community-owned Wind project in South Africa, have direct experience of the effects of policy uncertainty.
What became increasingly evident was the need for all stakeholders to collaborate and engage with each other more often. This includes government who should actually be the driver of this whole process. There is work to be done, hard and difficult work and we are already behind schedule. The transition is upon us and we have not done much to prepare. We cannot remain stuck bickering amongst each other whilst people lose jobs, the environment is affected and the economy suffers. This event was a great step forward in overcoming quagmires such as the issue of ownership in the energy sector.
[1] Represented by Lebogang Mulaisi of COSATU
[2] Represented by Brenda Martin of SAWEA
[3] Represented by Richard Halsey of Project 90 by 2030
