About 60 000 jobs could be lost in the coal sector if South Africa takes its goal of cutting down on carbon emissions seriously.
That is three-quarters of existing coal jobs. These losses will be concentrated in Mpumalanga, where mining drives the local economy. Government and unions don’t have a plan for the workers affected by this change in the energy system. They should have. They have known for at least a decade that the industry will close down eventually.
Coal and coal-fired power plants still drive South Africa’s economy. When construction on the next phase of these plants started — in the form of Medupi and Kusile — this was still the only form of electricity available. Few countries had found an alternative, beyond nuclear or gas (for those that had gas).
Despite enormous cost overruns — and the advent of cheaper alternative energy sources — Eskom says it will finish the new plants. At the same time, half a dozen of its old plants are shutting down over the next 15 years.
Replacing those plants has been the source of intense lobbying and debate. In 2013 and 2015, updates to South Africa’s official energy blueprint — the Integrated Resource Plan — were shelved by the administration of former president Jacob Zuma, which wanted nuclear power as the choice of the future. On cost alone, nuclear didn’t work and the energy planners drawing up the updates have called for a mix of renewable technologies to power the grid.
At the moment, just under 4 000MW of renewable energy feeds into the grid. For reference, Medupi — if it is finished — will provide 4 800MW of capacity to the grid. Eskom’s whole fleet should have 40 000MW of capacity, but power cuts keep happening because it often gets down to half of that.
The draft energy plan’s estimates are largely based on cost. A report from the International Energy Agency, released last week, said it is now cheaper to buy electricity made by wind and solar plants than it is to buy electricity from a new coal-fired power plant. In five years’ time wind and solar power will be cheaper even than existing coal plants. In South Africa, this point has already been reached.
With coal on the way out, local mines have been betting on exports. These earn R61-billion each year, according to the Minerals Council South Africa. But the last major market for these, India, has said its state-owned coal mining company will fill that demand.
The minerals council also says coal-mining employs 82 000 people. Eskom, whose business is based on burning that coal, employs a further 50 000 people. As the Mail & Guardian reported earlier this year, the utility is putting off retrenchments until after the May 8 election.
Losing jobs in mining isn’t new to South Africa. Hundreds of thousands have been lost in the gold mining sector. Yet no plans have been made for these workers.
A growing global movement is saying a plan has to be made. Dubbed a “just transition”, the movement aims to help workers in coal and other fossil fuel industries find new work in a world where renewables power energy demand.
The M&G attended a panel discussion on this transition, held on the sidelines of the annual Berlin Energy Transition Dialogue last week.
Samantha Smith, from the International Trade Union’s Just Transition Centre, said governments and industry have done a lot of damage by simply blaming climate change for job losses and not looking at what to do about those losses.
Just transition is something that South Africa has led on in the past, but only in words. The country’s plan for tackling climate change — submitted alongside those from nearly 200 other countries as part of the Paris climate agreement — is the only one to bring the topic up. The National Development Plan also mentions it.
Talking at the same Berlin panel, Tasneem Essop, a member of the National Planning Commission, said South Africa has been going through a transition since 1994, but this “previous, incomplete transition” has left all sorts of unresolved issues, particularly in the job market.
In its next development plan, looking at what the country should do up until 2050, she said it will have to figure out what will happen to jobs in the coal sector. The commission has been holding meetings about this, but not everyone is getting involved. She said: “Some of our big unions in the coal sector have not been very engaged.”
Research released earlier this year — by the Energy Research Centre at the University of Cape Town and the Stockholm Environment Institute — warned that the discussion about Eskom and coal mine closures has largely been a technical one. It has not looked at what happens about job losses. It has not put numbers to this problem. The research said that — on the current path — jobs in coal mining will halve to 42 000 by 2045. If South Africa takes its commitment to lower carbon emissions seriously, they will drop to about 21 000. In 1980, coal employed 140 000 people.
Whereas mining coal contributes 2% to the national gross domestic product, it is 19% of Mpumalanga’s GDP. In municipalities along its border with Gauteng, coal is also responsible for providing services such as healthcare and water infrastructure. The industry also means municipalities earn an income from taxes.
The energy centre’s research said: “Any decline in production could lead to significant social and economic upheaval if such impacts are not understood and managed carefully.”
The research said people interviewed at all levels of government warned: “Local authorities are unaware of the upcoming challenges associated with moving away from coal and are ill-prepared to face them.”
In February, the energy centre held a meeting of countries and groups working on these issues. In Germany, government, unions and the coal industry have agreed to phase out coal in two decades. In Chile, a similar agreement has been reached. Each one of these plans includes retraining people so they can work in the renewable energy industry, or go into other work. In Canada, workers in one mining town are being helped to set up a facility for legal marijuana production.
Other countries are starting to work out what to do with workers who are no longer able to work in coal jobs. South Africa is starting to talk about the problem, but the discussion is happening while jobs are already being lost.
The Mail & Guardian applied for a fellowship to cover the Berlin Energy Transition Dialogue. This was paid for by the German government