ENERGY DIALOGUE
Enviromentalists should not dominate the just transition discussion, says Mantashe
In a national energy dialogue, government officials, energy experts, economists, and environmentalists discussed Minister of Mineral Resources and Energy Gwede Mantashe’s approach to the just transition. Some agreed with his appetite for coal and gas, while others saw a future in renewables.
“Let the environmentalists protest, chant, and agitate. They have many valid arguments that can and must be considered when the pros and cons of economic activity are weighed up.
“But we cannot allow them to dominate to the detriment of the majority, especially those whose agendas are explicitly antigrowth and anti-employment,” said Minister of Mineral Resources and Energy, Gwede Matashe on Friday at the National Energy Dialogue in Johannesburg.
The dialogue was aimed at discussing South Africa’s approach to the just energy transition.
Mantashe was quoting from a Business Live article, which would set the tone of the day.
Whether it was intentional or not, a line was drawn in the sand between those who consider the economic opportunities of renewables and those who justify sticking with coal for as long as viable, as being in the interest of the people of South Africa.
Mantashe’s energy mix
In his address, Mantashe emphasised the importance of an energy mix that includes renewables (wind and solar), gas, nuclear, coal, hydro, and battery storage – as laid out in the 2019 Integrated Resource Plan.
Renewables
He said there are plenty of plans to implement renewables.
“Between now and 2030 renewable energy will receive the lion’s share of the new energy generation capacity to be developed,” said Mantashe.
“Renewables are expected to grow by 18% of energy supply, coal is expected to be reduced from 75- to 60% – as one goes up, one comes down. Lobbyists never look at those numbers,” he said.
Mantashe added that bid windows 5 to 7 will add approximately 7,800 megawatts of additional energy from renewables to the grid to address the current shortfall of 4,000 megawatts of electricity that President Cyril Ramaphosa announced in the 2022 State of the Nation Address.
But Mantashe was quick to note that being “angels” and “clean” would have negative economic outcomes.
“We always pretend to be an island of angels, but driven to poverty. We like that as a country – [pretending] that we’re angels, we’re clean.
Panel discussion at National Energy Dialogue in Johannesburg, 25 February 2022. From left: Mpumelelo Mkabela, Chairman of Menar, Moderator Nompu Siziba, Thabang Audat, Chief Director responsible for EnergyPlanning and Dr. Phindile Masangane, CEO Petroleum Agency South Africa. (Photo: Julia Evans)
“I can tell you the route we’re taking, we’re going soon to be [the] number five, number six [economy in Africa],” said Mantashe.
Alex Lenferna, climate justice campaigner at 350Africa.org, and secretary of the Climate Justice Coalition said, “Mr Mantashe and DMRE love to talk about how many renewables they’re building. But if we looked to the likes of the National Business Institute … they say that we need to be building renewables at 10 times the current speed if we have to meet South Africans, arguably insufficient commitments to climate change”.
Gas as part of the just transition
Mantashe added that if South Africa wanted to ensure energy security and to have uninterrupted energy supply, it would need gas, nuclear and some coal in the mix.
South Africa will be procuring 3,000 megawatts of gas power between now and 2030 – in line with the IRP, the minister said.
Additionally, he said the upstream petroleum industry needed to be established and developed. The upstream sector includes searching for underground or underwater crude oil and natural gas fields, drilling exploratory wells, and then drilling and operating the wells that recover and bring the crude oil or raw natural gas to the surface.
Dr Phindile Masangane, CEO of Petroleum Agency South Africa said during a panel discussion after Mantashe’s address, that South Africa has to “understand we are transitioning, we are not switching to, and that oil and gas will still play a significant role, even in the transition”, while pointing out how the UK and Norway have issued many explorations for oil and gas as part of their transition.
More coal
In accordance with the 2019 IRP, 1,500MW of coal power will be procured between now and 2030.
“Without disregarding the outcry of the environmental lobby, coal is necessary to sustain some level of baseload power, also for research and development in clean coal technologies,” said Mantashe.
As he has done in several addresses before, Mantashe emphasised that the agreement that came out of COP26 was to reduce, not phase out, coal use.
Nuclear
“In South Africa gas and nuclear are regarded as dirty products… Europe has labelled nuclear and gas as part of the green transition,” said Mantashe, saying that nuclear offers good baseload energy.
In the interest of the people?
“Just transition is not just about numbers. It is about people, it is about communities,” said Mantashe, arguing, as he has in previous addresses, that sticking with coal is in the interest of the people, as many rely on the sector for income.
Mpumelelo Mkhabela, the chairman of Menar, a private investment company with a portfolio of mostly mining assets, said with many South Africans being reliant on coal, “the debate about coal versus renewals, I think, is a false debate”.
“Because we have a lot of people employed in the mining sector right now. The true number is about 150,000 people that are employed in the mining sector.
“The reality is that our people need jobs, and our people need secure jobs,” said Mkhabela, adding that the mining sector not only provides jobs directly but also downstream (hence his elevated figure of 150,000 jobs versus Mantashe’s figure of roughly 80,000).
Peter Attard Montalto, head of capital markets research at research consultancy Intellidex, said SA needs to understand our commitments to net zero by 2050 and that the 2019 IRP is outdated – partially in terms of how it throttled renewables capacity.
“We really need a very rational, technocratic process that lays out least cost, lays our jobs maximisation and lays out a very clear carbon envelope – a window that closes down toward net zero in 2050,” said Montalto, commenting that a model of that nature would show some interesting outcomes.
“If the goal is provision of reliable and cheap energy – when you start modelling that out you come to some interesting outcomes of coal,” said Montalto.
“I think it would show some gas involved, but not a huge amount. I think it will show you that things like coal plus carbon capture and storage are simply too expensive, even considering the technology curves that the minister mentions on that front, and that nuclear power is simply too expensive.”
Montalto said he disagrees with the minister on his business point, and that investors (both local and international) are looking for clean and renewable energy.
“A key part of doing business now for local and foreign investors is showing a clear pathway to net zero as well.”
Montalto says that the CSIR “shows that a renewable led path is job maximising”.
Gray Maguire, carbon project manager at the Climate Neutral Group South Africa that covers economic issues relating to the green economy transition, said during the panel discussion, “There are many more jobs in the economy outside of coal, and how many of them are at risk as a result of us undermining our export capabilities and sitting in this extreme outlier globally, those are jobs we need to discuss.”
Maguire said South Africa being the fifth most carbon-intensive economy in the world – with our emissions being more than double the global average – is “unbelievable”.
“We need to think about what the impact is on all of the jobs,” he said, using agriculture as an example, which employs more than twice as many people as the entire mining sector combined (not just coal), and has 1,100 tonnes per million dollars worth of exports.
Maguire mentioned the value of platinum, which is fuelled by renewable energy growth in the form of catalytic converters, and has overtaken coal in terms of export earnings and in total value for the South African economy.
Going back to the topic of public participation, which Mantashe and other panellists had discussed, Maguire said it was important to speak to the platinum, agriculture, cement and motor vehicle industries.
“Let’s talk to them about how they feel about the risks that come as a result of not engaging in just transition,” said Maguire.
Lenferna added, “the evidence is clear that renewables are the most job-creating, most affordable and quickest way to bring energy online”.
“A recent Oxford University report showed that rapidly rolling out renewables and basically running the entire energy system, not just electricity, on renewables within the next 25 years, is our most economic option,” Lenferna said.
Lenferna added that CSIR and UCT energy experts believe renewables are our best option, and show that the IRP is wildy outdated.
Who are the ‘fundamentalists’ here?
Strong, somewhat polarising arguments have led both sides to label the other as “fundamentalists”.
Mantashe often comments how he is labelled a “coal fundamentalist” by activists and the media.
During the energy dialogue, the moderator read a question submitted online, where someone asked if there is fundamentalism in being a campaigner for renewables.
The moderator asked Lenferna if his campaigning is really for the greater good of all South Africa.
His response: “I think the real fundamentals might be the ones very much tied into the fossil fuel interests here,” which was met with scattered laughter from the audience.
“I don’t think that’s fundamentalism,” said Lenferna, “when you get into these discussions where everybody is an oil and gas representative and I’m the only civil society representative in the room, that makes me seem extreme. But really, it’s just because this whole discussion has been so biased in favour of these big polluting corporations and their representatives.”
In his closing remarks, Mantashe said, “I read a book by one author which cautions us that ego is the biggest enemy – when you have a big ego that fills a room, you are not open to a debate.
“Here we need a debate that helps us navigate through this transition in a balanced way that takes into account all the views.” DM/OBP
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Well Mr Mantashe , you can’t accuse you or your party ,the ANC of being angels,that is for sure!!!!I’m sure if you dropped you communistic approach and put the citizens first , this country wouldn’t be so poor.Also, your No 1, remember him(Zuma) he sure as he’ll is no angel, you the ANC put as back in to 5th or 6th position economy wise with your State Capture
it’s like he’s living on another planet
Well, Mantashe is for sure. Fifth or sixth — down from No. 1! How’s that for Mr Coal. If enivoronmentalists don’t dominate the transition, there will be no transition, and no earth. Silly, mad and dangerous man. Too long in the tooth…
The market is the best arbitrator.
Since we know Eskom can not afford, build or operate plants, all new generation should be under PPA.
Nobody will pitch a nuclear PPA – too expensive and the construction timeframe and risk is too high.
Everybody pitches solar and wind all the time, and prices now at 40c/kWh.
Unlikely that anybody will pitch coal PPA because will not get finance and the variable cost of input (coal) is too high.
If we can secure supply and price on natural gas, there will be gas PPA (and not only the ones Mantashe’s wife has an investment in)
Thank you very much for a helpful summary of an interesting dialogue. The Minister expressed the view that if God gave South Africa coal, then we should rely as much as possible on “clean coal” technology as much as possible to make use of that resource. He seemed to blame the decline in Soutj Africa’s economic position to those environmentalists who want South Africa to be “angels” at the costs of the economy. As highlighted in the meeting, the data and reports are contrary to his determined approach to what energy projects should be supported and proceed.
One thing that is interesting is that the discussion about the just energy transition frequently seems to focus on the extent of loss of jobs in the energy sector if a transition phasing out coal is implemented, but there is not a broader consideration of economic impacts and job losses in all sectors if effective measures to reduce carbon emissions and the effects of the climate crisis are not implemented- especially in agriculture, fisheries, forestry, and likely also in tourism. Also, the substantial additional impacts of water shortages, sea level warming and rise (on coastal cities), and the health impacts of a warming climate. It is important for the country’s approach to the energy transition must take into consideration the total range of effects to the country, and the full range of impacts on the economy and people.
Typical ANC policy of deflecting valid debate once again. Vested interests are the only reason for Mantashe pushing old energy agenda’s.
Trying to blame environmentalists for SA downward spiral is laughable and comments like this should be treated with contempt. The ANC have been in power for the last 25 years, really Mr Mantashe, you treat your citizens like fools, which will ultimately lead to your being removed from your ministerial position. SA citizens want bright, intellectual and responsive politicians in these positions. We have all read and engaged with the economics and innovations that are coming through around renewable energy production, no fundamentalism needed, the facts are there for all to see.
You also seem to believe that you own the words ‘Just transition’. All the people involved in renewables have SA citizens well being at heart, unlike yourself. Cleaner air and switching to jobs in renewables will carry us forward into the future. Time to retire Mr. Mantashe, you are not aligned to the zeitgeist.
The call for a smorgasbord of voices rather than the bigoted dogma of any ideological position be it Marxist or Green is not an unreasonable one. The fact that one might not like the messenger does not detract from this.
The us vs them bigoted fundamentalism that dominates so much of public discourse in South Africa is not a good thing. I would go far as saying that it constitutes a major existential threat to South Africa’s democracy and our success as a nation. That is why I think Schusller’s and Fraser’sattempt to fight like with like is as unfortunate and Mantashe’s more conciliatory tone is commendable.
This should not be seen as a criticism of their message nor as an excuse for the green movement to carry on as before. Far from it the green movement’s modus operandi is built on the bigoted shaming of others who have the temerity to disagree with them. It is a cancel culture on steroids.
It think one can justifiably conclude that this extremism is an existential threat to South Africa. It needs to be actively discouraged. The Constitutional Court’s recent judgment outlawing Jew bating under the guise of opposing Zionism is an important step in the right direction.
But not all greenies are like this. Many are thoughtful people with important points to make, just as there are decent people in the fossil fuel industry and in business who have valuable contributions to make.
We need to seek unity in our diversity. That means taking constitutionally defensible, measured, and appropriate action against those who seek to the country harm by capitalising on our differences.
Ian,
Costs and technology have improved and Eskom prices and reliability deteriorated to the point where today, renewables with storage is not a green thing, it is a rational business tactic.
Instead of being all grid with a generator for loadshredding, my response is:
1. Enough solar to generate more kWh than my loads require.
2. A large battery bank my side which with hybrid inverters turns my factory electrical system into a very large UPS – about 4 hours worth of storage.
3. My generator then only sees the battery bank for when solar and grid was not enough.
4. I drop my grid visibility from 300kVA to around 75kVA – which saves me R900k per year in availability.
5. If they pay me fairly I will at times export.
Above system pays itself back in under 7 years, then again in another 4.5 years, then again in another 3 years and then every two years.
Eskom and councils have failed us to the point where my energy cost was already 370c/kWh
Gwede forgets that his tenure at the helm of SA politics have not shown growth, but shrinkage that is a rather palpable failure to launch.
He forgets that our people are being murdered by the corporate selfish interest he keeps entertaining and supporting in the courts. He forgets that those same corporates would never allow any of the proposals, he rubber stamps (hopefully not after rubbing his hands as avariciously as his track record leads me to imagine), in their own backyards. He forgets that we need to protect our incredible natural heritage, because of the massive contribution it keeps making to the broadest section of our economy WITH minimal investment. He forgets that he sounds moronic saying that the energy discussion shouldn’t be dominated by the environmentally minded in a room with one green beanie and a bunch of coal and gas representatives. He forgets that the wise man takes his own advice – because it looks, to my eye at least, like the ego attempting to fill up all the space for constructive debate on the matter is his own.