RESUR GAM What is the Just Energy Transition? Just transition was a - - PowerPoint PPT Presentation

A dis isruptors view of f th the ju just energy tr transition

Presentation to Nedbank/EE Publishing seminar “Unlocking the Just Energy Transition” 7 May 2019

RESUR GAM

Project 90 by 2030 defines it as “A Just Energy Transition is a transition towards a sustainable, low carbon and equitable energy system which is better for people and the planet than what we currently have – from coal-generated electricity to renewable energy (RE) sources such as wind and solar. The just component is to ensure fairness for workers in legacy energy systems where jobs might be at risk. As South Africa moves from a fossil fuel dependent energy mix to one that supports renewables, we have to ensure adequate resources are allocated towards planning for the socio-economic challenges that lie ahead.”

What is the Just Energy Transition?

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Just transition was a set of practices lived by indigenous people and then co-opted by Labour to encompass a number of interventions to protect workers jobs and livelihoods and economies adapt to more sustainable models Just Transition policies For trade unions, “Just Transition” describes the transition towards a climate resilient and low carbon economy that maximizes the benefits of climate action while minimizing hardships for workers and their communities. Needs will vary in different countries, though some policies must be applied

• everywhere. These include:

1. Sound investments in low‐emission and job-rich sectors and technologies. These investments must be undertaken through due consultation with all those affected, respecting human and labour rights, and Decent Work principles. 2. Social dialogue and democratic consultation of social partners (trade unions and employers) and other stakeholders (i.e. communities). 3. Research and early assessment of the social and employment impacts of climate policies. Training and skills development, which are key to support the deployment of new technologies and foster industrial change. 4. Social protection, along with active labour markets policies. 5. Local economic diversification plans that support decent work and provide community stability in the transition. Communities should not be left on their own to manage the impacts of the transition as this will not lead to a fair distribution of costs and benefits.

What stakeholders say about JET…

Government Business Labour Community

JET is a core principle in the NDP and particularly in Chapter 5 ….without any plan. The imperative for a just energy transition is now embedded in the ANC Manifesto without explicitly stating targets Business believes that any energy transitions to a low carbon economy must be just The potential role that renewable energy can play in

1. Mine closure 2. Transitioning mining economies post operational close.

Labour leadership want an energy mix where coal and the state plays the dominant role in energy provision Labour see it as the responsibility

• f Government and Business to

make concrete proposals on the energy transition. In national decision making platforms, Community social partners support that:

1. Coal must remain a significant part of the energy mix, just that it must be clean coal 2. Eskom should ask for further waivers on its non-compliance with emissions limits

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Are social partners position on the energy transition just…..

… but how it gets lost in translation

Government Business Labour Community

Misalignment between departments on approach to any decarbonization

• DOE wants energy mix to include

coal even if it drives up cost of electricity over cheaper scenarios

• DMR

wants mining sector to increase investment in “clean coal”

• DEA wants to impose stronger

environmental laws but allows Eskom & Sasol to exceed emission limits

• Treasury has imposed Carbon Tax

Renewable energy economics, Eskom instability and climate activism is driving Business to embrace renewable energy Ambivalent about climate change policy

• Standard Bank
• Sasol

Institutional pension fund market sends mixed messages Labour membership know that the energy transition (and its association with 4IR) is coming and their membership are not “fit for purpose” without significant reskilling

Civil society, and particularly communities within coal mining areas

1. Want to transition from coal 2. Mining trumps any alternative use for land 3. Communities not consulted and

• mitted from decision-making

4. Communities are not being educated

• r

reskilled for the future economy

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...or just plain confused?

Political and institutional inertia

• We suffer holy cows gladly!!
• Eskom Cognitive Dissonance Syndrome

Exclusive consensus process

• JET needs to be relevant to more than a unionized coal or Eskom worker

No tangible plan

• All macro. No micro
• JET2JT needed

Observations

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Source: World Economic Forum

A disruptors view of the just energy transition

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The just energy transition should be a transition to a low carbon economy in a way that allows equitable participation and inclusive growth for all in the future energy sector, protects the vulnerable and provides the

• pportunity for current and future citizens to capacitate and adapt themselves to find dignified employment

and embrace the modern global economy The economics of renewable energy will dictate that it will become the mainstream (increasingly preferred) electricity generation technology within South Africa’s energy mix over the next 10 years Challenge of

• coal incumbency
• Political “command and control” economy mindset
• Eskom
• Policy and regulation
• Energy transition that aligns future economic structure and skilled labour needed to participate in it

Solar Industry Development Plan

The SIDP is a solar industry plan for an implementable JET strategy through deploying large scale solar IPPs within targeted geographical area (in this case REDZs) 1. Establish REDZs in declining mining areas (an initial focus on coal and gold)

a) Phase 2 REDZ process has shortlisted Witbank, Klerksdorp and Welkom as future zones)

2. Assign S.34(1) allocations for 5GW of solar PV to be constructed within mining REDZs over the next 10 years.

Potential co-benefits of constructing 50 x 100 MW solar PV plants over the next 10 years Location

Located in areas with

• Low agricultural potential (mine affected land)
• Strong Tx and Dx networks (effective recycling of grid investment)
• Large un- and semi-skilled labour force
• Levels of light engineering industrialization that could be transitioned to servicing RE sector

Strategic focus

Creation of zones that will have a strategic focus to transition away from mining towards a more mixed and green economy

• Create renewable energy jobs for mine affected workers
• Reskill workers, and educate the youth for a future green economic zone
• Long term solar pipeline to give confidence to solar manufacturing supply chain to locate to mining REDZ
• Allow for better coordination between stakeholders (IPPs, mining companies, all spheres of government)
• Target ownership, SED, SLP and government budget for distressed mining towns in an impactful way.

Plan will create a more meaningful value proposition for renewable energy in South Africa

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• The

“crowding in”

• f

renewable IPPs within defined geographical areas which are needing to go through transition is actually intended to stimulate the finding of new solutions to the creation of new regional economies

• Avoid renewable energy needing to become a silver bullet
• Establish different business models (microgrids, community owed

IPPs)

• Use the availability of cheap renewable electricity
• allied to battery storage to offer “RE100%” tariff
• power RO plants to treat mine waste water
• Waste to energy
• Potential for green hydrogen / ammonia storage
• Create an integrated transition strategy that can compound the

impact of other initiatives in post-mining strategies.

• Then to ensure proper policy sequencing to deal with skills

retraining, industrialization and educational needs.

Renewables within an integrated mining transition plan

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MINERALS RESOURCES

Mass % World Rank

Antimony Kt 350 16.7 3 Chromium Ore Mt 5,500 72.4 1 Copper Mt 13 2.4 6 Fluorspar Mt 80 17 2 Gold T 6,000 12.7 1 Iron Ore Mt 1,500 0.8 13 Iron Ore – Incl. BC Mt 25,000 10 * Lead Kt 3,000 2.1 6 Mangenese Ore Mt 4,000 80 1 Nickel` Mt 3.7 5.2 8 PGMs t 70,000 87.7 1 Phosphate Rock Mt 2,500 5.3 4 Titanium Minerals Mt 71 9.8 2 Uranium kt 435 8 4 Vanadium kt 32 2 Vermiculite Mt 80 40 2 Zinc Mt 15 3.3 8 Zirconium Mt 14 25 2

All signals indicate that over the next 10 years, solar PV and wind will become the dominant technology to contribute to new (and replacement) generation additions

• can be regarded as one of the facilitators of the 4th Industrial Revolution
• As we have seen, its disruptive has (and can still) create major disruption
• Can we use greater geographical targeting of renewables to ensure greater transformative

dividends to affected communities to assist in the JET?

• Whilst there can be no doubt of the benefits from SED and ED initiative on REIPPP projects, do we need to

rebalance between those that redress the issues of the past over those the address the future needs of the South African economy

Conclusion

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