Our Burning Planet

ENERGY SUMMIT

The just transition: Energy Minister Gwede Mantashe explains his reasons for sticking with coal

Mineral Resources and Energy Minister Gwede Mantashe delivers the keynote address at an Energy Summit convened by the South African Youth Economic Council in Johannesburg on Thursday, 13 January 2022. (Photo: Julia Evans)
By Julia Evans
14 Jan 2022 22

The energy minister said that rushing to shut down coal power plants is not the solution, and will lead to costlier electricity, fewer jobs and damage the economy.

The South African Youth Economic Council hosted an energy summit gala dinner on Thursday, where Mineral Resources and Energy Minister Gwede Mantashe gave a keynote address in which he discussed South Africa’s just transition plan and its developmental economic objectives. 

What is the just transition? 

Mantashe said, “So, to me, it’s a transition from high carbon emissions to low carbon emissions.  

“People are simplistic about it, they say it’s a transition from coal to renewables. And I’m saying, no, no, no. It’s a transition from high carbon emission to low carbon emission.” 

Mantashe cited the objectives of the National Development Plan – to provide reliable and efficient energy service at competitive rates, to provide an energy sector that is socially equitable through expanded access to energy and affordable tariffs and to  provide an energy sector that is environmentally sustainable to reduce emissions and pollution. 

“Now, that’s where the debate is,” said Mantashe in regard to the third objective.  

Mantashe views holding on to coal as looking out for the livelihoods of the people who depend on it.  

He said that he told Deputy President David Mabuza to take a helicopter from Johannesburg to Nelspruit. 

“He is from Mpumalanga. He was shocked to see the stretch between Belfast and Delmas where coal mining and coal-generated power stations are located and remain. 

“And I said to him, whatever decision we take, we must appreciate that it is not coal that is staying in Belfast to Delmas – it is human beings. They stay there, they earn a living, they live a livelihood in that area.” 

Mantashe added that his experience working with coal makes him able to relate to the people who would be affected by the just transition. 

“I spent seven years in that area mining coal, so I know exactly how people relate to that coal. And therefore any programme that we’re going to take, must be systematic, it must protect livelihoods, it must protect lives.” 

“In your debate, factor in the impact of energy poverty, where people can’t have access to energy and meaningfully benefit from energy.” 

Mantashe’s justification for coal 

Mantashe jokes about his infamous titles as “coal fundamentalist”, “fossil fuel dinosaur” and, recently, “worst polluter of the year”, but says that he is committed to South Africa’s international commitments to respond to the climate crisis. 

“We’re committed to that – we’ll continue to invest in clean energy technologies towards net zero emissions.”    

Mantashe said his department is always presented as a coal fundamentalist but the biggest allocation of growth in energy is in renewables. 

Mantashe noted that by 2021, at least 5,422 megawatts from the Renewable Independent Power Producer Programme were already connected to the grid and that the department is committed to the procurement of 6,422 megawatts of renewable energy up to bid window five. 

“But when you read newspapers, they will not tell you that story,” said Mantashe. 

His argument is that South Africa must get the most out of the coal power stations the country already has. 

“When we talk about experimenting with clean coal technologies, people immediately give me papers, that we’ll take you to court on this. But the reality of the matter is that it’s a resource that the country has; let’s experiment with this.” 

Mantashe said that South Africa has 16 coal-fired power stations providing about 75% of the country’s electricity generation, and by 2030 is it estimated to be 60%. 

“You don’t destroy what you have on the basis of hope that something better is coming. You build for the future on what you know and what you have. So that approach to me is scientific, is systematic, it protects the present ability of the state to supply energy.” 

He said that rushing to shut down coal power plants is not the solution, and will lead to costlier electricity, fewer jobs and damage the economy. 

“[Coal] has made a huge contribution to the economy. It is growing, it is generating revenue… it is doing well.  

“Now, what do we do with it, do we set it alight and destroy it? My argument is that let’s allow it to benefit as long as it can. 

“In mining, I can say that without fear or favour, that one of the sectors of mining that has actually transformed, is coal. There’s a number of black coal mining owners. And any rush to destroy that sector will not leave that transformation agenda unhurt. So, we have a duty to protect that sector, grow it and make it make an impact on society.” 

COP26 and financial deal 

At the COP26 finance negotiations last year, the European Union, Germany, France, the UK and the US pledged R131-billion to support South Africa’s climate action goals, in the form of grants, concessional loans and investment and risk-sharing instruments. 

“They will not give us that money,” said Mantashe. “They will give [it to] us if we take it as a loan bearing interest rates. That is how it works, that is what the world is like.” 

He added that in our context R131-billion is R50-billion short for financing the upgrade of the national grid infrastructure.

Mantashe emphasised that what came out of COP26 was to phase down unabated coal power and inefficient fossil fuel subsidies – not phase out coal.  

“They say you must phase down, meaning that we must be systematic in dealing with the exit from coal. To tell the truth, the whole of Glasgow said these commitments made by some are based on technologies that are yet to be developed. And this is at best reckless and, at worst, dangerous.” 

Addressing young people during his speech, Mantashe said, “I don’t want you to inherit any future. I want you to build that future. If you want to build it, then you shape the kind of future you want.” 

Kanakana Mudzanani, the president of the SA Youth Economic Council, told Daily Maverick after Mantashe’s address: “I think the minister gave a clear clarity that young people must take part in these kinds of conversations.  

“As a country, if we are to indeed conserve our environment, at the same time ensuring that we have sustainable energy, we need to get more young people involved. And he brought young people through a journey of what coal means to a vast majority of South Africans, what coal means to quite a lot of people and how if we are to transition, we’ve got to understand that we must not be transitioning in the name of hope. But we must ensure that the transition gives people jobs. 

“On behalf of the council, we are largely concerned about the environment. I think we agree fully with a call that we need to conserve it.  

“However, it’s a question of, are we going to have the ability to conserve the environment, but at the same time, ensure that we maintain and uphold people’s livelihoods?

“So, if we transition, and that transition leads us to a worse condition, I do not think it would be appreciated. So, let’s prioritise livelihoods but at the same time, let’s not neglect the environment.” DM

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All Comments 22

  • Hear, hear Minister Mantashe. If only the banks and other investors would acknowledge the pragmatic necessity of your position instead of bowing to pressure from idealistic ‘eco warriors’ who have little appreciation of the cost to this country of abandoning coal too quickly.

    • Susan as I see the broad picture, the “eco warriors” are attempting to prevent more “Ermelos” of a different nature from springing up everywhere as a matter of system which creates mono economies. Fracking and oil drilling will create these vast areas across our land at the expense of our future generations and the very people who now occupy and rely on those natural assests as they are. When technology provides for clean energy, cost in mere money (which is volatile and inflational anyway) should not be the determining factor. Hidden costs (externalities) to future health, biodiversity and even human existence is what eco- warriors argue for.
      One cannot imagine for even one minute that all these people are merely protesting because they have nothing better to do. All that effort may be worth investigating. There are significant issues at stake which will impact dramatically on our economy, well being and independence as a Nation.

      Added to this, I think we are by now weary and wise to the arguments from this government when it comes to “the good of the people”. By now, when that is the reason given for any money deals, we know the track record . The envornment is worth protecting because it offers great eco service to our economy at no cost. Strip that down to a single brief economy like gas or oil and the diversity of that service is gone forever. This is a no-brainer.

    • The Presidential Climate Commission is set up specifically to consider all aspects of a just transition. If you spend some time looking at the proceedings (which are on the web) you will get some understanding of the issues being considered. You will also see how coal is currently having a very bad effect on local people.

    • Definitely with you and the minister on this one. I’m watching the consequences of this rushed transition unfold in the UK, Europe and China as the prices of energy are crippling ordinary people. Ultimately solutions have to address the needs of the people, it doesn’t help to have an idealist solution that leaves the citizens worse off.

      Even worse is increasing dependency on external sources that could be used for politics reasons as with Nord Stream 2 instead diversifying supply. I won’t even go to the livelihoods of farmers that have been kicked out of their land to make space for wind and solar farms with little compensation.

      I’m a fan on renewables as solar provides 70% of my energy needs and immunity from loadshedding, but it’s not a one size fits all solution especially at a national level. When there’s no sun or its not enough Eskom is still necessary to charge my batteries.

      • Salatiso:

        You are partly correct.

        Solar does not work when the sun does not shine, but batteries filled with solar do.

        The solar energy I use directly during the day instead of the grid costs me roughly 70c/kWh. I can do that math very exactly.
        The factory does not use much at night and some days are cloudier, but even after writing off my batteries (a 40 foot container of batteries) over half their expected lifetime and adding that to the 70c, my total energy cost will be less than what I pay now never mind after this three rounds of 3 times inflation increases. I will also be free from loadshedding…

        Yes, I might keep a much smaller grid connection instead of using diesel as backup for when solar and batteries are not enough. This will help the minister’s coal plants as I will use them in offpeak periods.

    • Susan: when you say ‘ cost to this country’ you are presumably talking about the physical cost of energy and/or the jobs cost?

      Cost of energy : at our factory my energy cost now exceeds 350c/kWh (all fees divided by kwh). Quite clearly coal is not cheap, as I pay more than I would pay at California peak energy rate.
      Cost of energy : if the proposed new increase and the projected next two increases go through, my cost will be close to R6/kWh. For scale, that is more than the variable cost to me of running 800kVA diesel generators. That is an indictment. Little old me can run less than 1MW of diesel cheaper than coal at 40,000MW can. I don’t like diesel so I will migrate to solar and batteries instead, at my existing energy 350c/kWh I will be about half the coal price in 2026 and I will stay there.
      Cost of jobs: every transition has transformation cost. We used to to transport goods with ox wagons. Along came coal trains and diesel trucks. The labor force that kept ox wagons going adapted.

      The world has moved beyond the eco warrior debate. Technology has improved to the level where with solar and batteries coal is dead in the water. With fixed, certain, 100% reliable and cheaper energy costs I can employ more people – or pay more tax so that the politicians can spend it on votes.

  • There is no such thing as “clean coal” technologies, that is greenwashing by the coal sector, which Minister Mantashe has bought into as an effective solution to the climate crisis. His dithering and delaying on opening up the electricity grid to renewables has worsened the electricity crisis and delayed implementation of an effective just transition. He pushes projects and approaches that will benefit himself and the ANC financially, an example is the ridiculous karpowerships project that will not promote the long term sustainable development of the energy sector in the country. He is certainly not acting in the best interests of the country, no matter how he tries to portray it. It is reported yesterday that Shell has donated millions to the ANC, which is why Minister Mantashe is pushing so hard for Shell’s seismic exploration off the east coast, and demomises those who are opposed to the project. He also neglected to mention in his address the horrendous air pollution in the area of Mpumalanga that he referred to.

    • Any reading South African is by now wise to arguments which cite “for the good of the people” as we all know this translates to ” for the good of the few who have bigger coffers to extract from”. When it comes to any government, its always wise to follow the money, and the ANC seems to be winning this race by far.

  • When a politician (especially an ANC one and particularly a forked-tongue cabinet minister) says “for the good of the people”, we know they mean the very opposite. All debates end there. Deathly.

  • “He added that in our context R131-billion is R50-billion short for financing the upgrade of the national grid infrastructure.” which the anc has totally neglected since taking power. If the Medupi and Kosile power stations were completed on time instead of feeding anc deployees, the people of SA would be a lot better off and Eskom would be much better placed to address the environmental issues.

  • The Just Energy Transition is about ALL ~60million South Africans. Not a handful of well paid ESKOM people ? Not even a 100 000 miners ?

    Also, a Just Energy Transition is NOT about commerce exploiting a RSA caught between a rock and a hard place – its about empowering all South Africans so that all can profit from self-generation

    Who will stand up for the ~60million potential #Prosumers ? Who will fight for our rights ?

  • Minister Mantashe does make a good point about thousands of jobs being at stake in the coal sector. In a country with our unemployment, this has to be a factor in thinking.

    But equally true is that coal tech is yesterday’s news. The Green Transition offers MASSIVE economic opportunities. Instead of being dragged into the discussion by the happenings in the world. the energy department should be leading us into the future. Tens of thousands of skilled jobs can be created in this way. Transforming old coal stations into gas can happen quickly.

    The ANC has very little understanding of business and economics, as our dismal economic performance over the last 10 years shows. Playing politics does not put food on the table.

    • Hence the “just” part of the transition. Addressing jobs and the sustainability of mining towns are totally on the agenda. It’s right there in the name. Mantashe conveniently refuses to acknowledge that. Part of that transition is also moving from a single employer in the town to lots of smaller options, increasing competition between employers and improving wages.

  • Something has to change, even if only our energy pricing. Despite various claims about our having cheap energy, at the business consumer level energy now costs over R3/kWh. That is California peak rate pricing.

    Coal has NOT delivered cheap energy at all and even at our prices Eskom is a sinking ship in financial terms.

    We cannot rebuild our economy with uncompetitive energy prices, no matter where that energy comes from.

  • The goal here is not an energy transition. The goal is to save the planet. The debate does not reflect this. The worst case scenario is thermal runaway, that will leave the planet uninhabitable – forever. The dire consequences of global warming means we (globally) should be ready to sacrifice in order to save it. SA is prepared to let others sacrifice, whilst it will pick out the best path for itself, unconcerned with necessary target setting.

  • Greed and corruption trumps any concern about the survival of the planet. With people like Mantashe and the ANC at the helm? No possibility of a better outcome. Just remember all the greased contracts with the coal mining companies, Karpower, and many other examples? The transition to clean energy has been factored in for future planning to accommodate those affected but conveniently overlooked as we are offered coal-fired smoke and mirrors. Our children, grand children and great grand children (if the planet is still inhabitable by then…) will be the “beneficiaries” of our inaction, neglect, averted gazes, and hand wringing.

    • John:

      I am about ⅔ solar but I do think the transition will be tough.

      Regardless of the environmental cost our country simply cannot afford:
      1. To close coal assets that are not end of life.
      2. To retrofit scrub coal emissions on 40y plants at MASSIVE cost. That is like painting a rusted car.

      If the countries that already built their economies on coal the past 100 years pay (not lend) for above 1 and 2, then great.

      But we simply cannot. Rather spend that money on preparing the transmission grid for mixed supply and building 5GW 100 hour pumped storage. Pumped storage does not care whether its input energy came from coal or fairy dust, we WILL need that in a future smarter grid. If the bunny huggers complain about the environmental impact of pumped storage they need to choose which is worse for the environment. That or the status quo.

  • Dear Minister, while you are passionate about the jobs, as we all should be, you ignore the massive health damage to those that live around the power stations and mines as well as those actually working in these power stations and mines. You also ignore the damage to the environment which is a cost that future generations will need to pay. It seems to me, you could more easily go green faster, and use saved funds from health care and environmental restoration to retrain people to work in green industries. Of course retraining is difficult and not always appropriate so we can use a carbon tax to fund improved social programs.

    Of course, many analysts, including Chris Yelland, have pointed this out to you so you must know this. This leads us to suspect the possibility that there maybe other reasons for your passion. Please excuse our suspicions, but the Zondo commission leads us to believe that there might be huge issues with corruption

  • Julia thanks so much. I always have difficulty to understand GM’s position on coal (actually anything) because I can’t hear a word he says. Whether one agrees or not, at least you helped us to understand his position. Now we can judge whether his views make sense or not.

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