In response to the devastating impacts of the Covid-19 pandemic, people across South Africa have been demanding a just recovery. Their call is for economic stimulus packages to invest in sustainable and inclusive development that addresses the needs of people and the planet.
Minister of Mineral Resources and Energy Gwede Mantashe, however, seems to be going in the opposite direction. His Mining and Energy Recovery Plan aims to prop up unprofitable polluters while leaving some of South Africa’s impoverished people literally in the dark.
When Minister of Finance Tito Mboweni announced his special supplementary budget in light of the coronavirus pandemic, its austerity-heavy vision saw a 17% budget cut to the Department of Mineral Resources and Energy. Showing how Mantashe is far from a champion of the poor, the programme he chose to decimate to help make up for the shortfall was the Integrated National Electrification Programme.
This programme provides Eskom with funds to expand infrastructure and electrify households, thus getting electricity to those long left in the dark. Mantashe decided to cut this budget in half, taking R1.57 billion away from efforts to electrify households. The result is that 43 000 fewer households will be electrified over the next two years.
A convenient narrative is that such budget cuts are a necessity in the face of a tightened budget. But in reality, they reflect Mantashe’s prioritisation of the profits of polluters over the interests of South Africa’s impoverished and marginalised. Mantashe is acting like a reverse Robin Hood, stealing from the poor to give to rich and polluting corporates.
While Mantashe was taking access to electricity away from the impoverished, his Mining and Energy Recovery Plan announced that he would be giving hundreds of millions of rands to the Council for Geoscience to fund a research programme to enable the lie of so-called clean coal. Clean coal is every coal-corrupted politician’s favourite myth, which they stoke to make coal power seem as though it can be part of a sustainable future. It can’t.
An expensive and polluting lie
Coal is never clean, as vast air and water pollution are an inextricable part of mining and burning coal. There are some technologies that can make coal ever-so-slightly less polluting, but those technologies tend to make coal power more expensive to produce – an economic death knell given that coal is already less competitive than renewable energy.
Even Eskom chief executive André de Ruyter says that adding technologies to reduce sulphur emissions from its Medupi power station will be too ecologically and economically expensive, using up scarce water supplies, emitting more carbon pollution and adding R42 billion in costs.
That is R42 billion on top of the nearly R500 billion that the Medupi and Kusile stations have already cost to build. They are producing some of the world’s most expensive energy and costing nearly as much as Ramaphosa’s entire initial Covid-19 stimulus programme.
In a pretence to tackle climate change, Mantashe wants to sink more taxpayer money into researching technologies to capture and store carbon emissions from coal, known as CCS technologies. The problem, again, is that those technologies are simply not economically or ecologically viable.
While CCS sequesters carbon, it does not eliminate the other harmful consequences of mining and burning coal. These include air, soil and water pollution. Rather, because CCS requires 15% to 30% more coal to achieve the same energy output, it would actually increase the negative impact and cost of coal.
Researchers estimate that CCS would increase the cost of electricity by 50% to 100% because of large capital costs and the parasitic energy requirements of between 15% and 30% of a power plant’s electricity output. Those additional costs make CCS a stillborn white elephant.
Demonstrating this in real life, the United States’ flagship “clean coal” power plant, equipped with CCS, was declared dead on arrival by its chief executive. The plant simply could not turn a profit burning coal. This follows a global trend in which the hopes of CCS are crashing on the rocks of economic reality, a reality both US President Donald Trump and Mantashe refuse to admit.
As the Financial Times newspaper reports, wind energy and storage is already five times cheaper than the current cost of coal with CCS. While Mantashe might argue that research can change this, even the more optimistic future projections of coal with CCS see it being three times more expensive than wind and storage is now – and wind and storage prices are coming down at a rapid rate. So even if the research works out, CCS will still be too expensive to compete.
Mantashe is basically throwing good money after bad ideas to keep the myth of clean coal alive, so he can try to force new coal on South Africa. Meanwhile, renewable energy, which he spurns, is readily available, cleaner, more affordable and creates jobs. This forms part of a broader energy agenda in which Mantashe is making us pay dearly to keep expensive coal alive.
Coaled hard corruption
Last year, Mantashe and the energy department rigged the 2019 Integrated Resource Plan, South Africa’s energy blueprint, to artificially cap how much renewable energy is allowed. Despite renewable energy being our most affordable and job-creating energy source, he limited it to force in new coal, nuclear and fossil gas.
The result, if we follow that plan, is that our energy will end up costing us tens of billions of rands more than a renewable energy future would. It will also mean we create less jobs, more pollution and slow down our already anaemic economy.
In response to the department’s quashing of renewable energy, this week environmental justice group groundWork launched court proceedings against Mantashe. They are demanding that he provide reasons why he would choose an energy future that even the government’s own modelling showed would be more expensive and polluting.
Martin Luther King Jr once decried that the US has socialism for the rich and rugged individualism for the impoverished. Mantashe is enacting a similar vision in the energy sector. We have tax and rate-payer funded socialism for the wealthy coal, oil and gas corporations polluting our planet, and harsh austerity for the impoverished, who are left in the cold and the dark.
The great Eskom heist
In the end, this is not a new story. For decades now, the South African taxpayer has been asked to foot the bill for an increasingly expensive, corrupt and uneconomic coal sector. Consider a stunning 2019 report by the Special Investigating Unit, which has received strangely little attention.
The report found that the 2008 load-shedding crisis may have been partly engineered by Eskom employees who ignored repeated warnings that coal stocks were running low. The report says that the “self-created” emergency was then used as a pretence to sign on R14 trillion in overpriced coal contracts.
That is arguably the biggest transfer of wealth in South Africa’s democratic history. It has been taking place in slow motion over the past decade as the cost of electricity has risen by more than 400% and we have been asked to bail out Eskom time and time again, to the tune of tens of billions of rands.
The transfer has been into the hands of coal companies, many of whom secured their contracts without proper tender processes. Again, R14 trillion in contracts. That’s worth almost 10 times South Africa’s entire 2019-2020 budget of about R1.8 trillion. Imagine the hospitals, schools and clean energy infrastructure that could have been built with that money.
Profiteering off energy desperation
As a result of years of propping up unprofitable coal, electricity has become so expensive that many of the poorest households would rather burn polluting wood or paraffin than use electricity. We could rectify this by rolling out affordable renewable energy, or expanding the woefully insufficient free electricity grant for low-income households. However, the department has a more “tender” solution.
Having made electricity so expensive for the impoverished, it seems the department is lining up tenderpreneurs to profit from the situation. They are rolling out a liquefied petroleum gas (LPG) expansion initiative to lock households into fossil fuel. LPG is derived from crude oil and natural gas. The department aims to double the use of LPG in the next five years. One can’t help but wonder who will benefit from the tenders.
While fossil fuels get the fast track, there is no government programme to roll out renewable energy and the private-sector procurement programme has seen no new renewable energy contract allowed by the state for more than half a decade. The department continues to stall and kill the renewable sector despite study after study after study showing that it is our most affordable, job-creating and sustainable form of energy.
A green new Eskom?
South Africa cannot afford to go on like this. Its people cannot afford corrupt and overpriced coal, and the toll of our polluting energy system on our health and ecosystems is unsustainable. A better future is desperately needed and very much possible.
As research from non-profit, economic research institution Trade & Industrial Policy Strategies shows, “Unlocking renewable energy investments as part of the post-lockdown stimulus package would bring multiple benefits, from fostering inclusive growth to stimulating industrial development and sustainable energy systems.” It would create hundreds of thousands more jobs than our status quo and reduce our energy costs. Yet so far, no stimulus money has gone to support renewable energy.
State capture is holding such a future hostage, so we will need to fight for it.
In June, the Climate Justice Coalition launched its Green New Eskom campaign. It demands a rapid and just transition to a more socially owned, renewable energy-powered economy. One that provides clean, safe and affordable energy for all, with no worker or community left behind in the transition.
More than 50 trade unions, societal organisations and businesses support the campaign. However, a politely worded letter will not change Mantashe’s mind or reorient the department to a more just energy future.
Society has no choice but to take the fight to the government, otherwise South Africans will be stuck with load shedding, a deepening climate crisis and skyrocketing electricity prices driven by a corrupt programme of propping up polluters. This is one of our country’s key fights. It is one we cannot afford to lose.