/ 21 November 2023

Power struggle threatens just energy transition

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The Just Energy Transition is a shift to lower carbon technologies and resources, while ensuring that society, jobs and livelihoods will not be harmed. (CFOTO/Future Publishing via Getty Images)

Next week, world leaders will meet in Dubai at the 28th Conference of the Parties to discuss the biggest economic transition since the Industrial Revolution: our slow disavowal of fossil fuels and our acceptance of a greener future.

As with all great transitions, the move to away from fossil fuels has been fraught with competing interests and other dizzying complexities. 

There will be winners. There will be losers. And even under the guise of the benevolent effort to prevent further climate crisis-related destruction — or indeed delaying the inevitable economic contortions that will come with the transition — some may conspire to ensure that whatever gains are to be made during this period are concentrated among a handful of already powerful players.

In a report released last week, nonprofit organisation Open Secrets delves into the motives on both sides of the energy divide, each lobbying to grow their winnings in the wake of the greatest existential threat of our lifetime.

This power struggle has become difficult to ignore. 

It’s perhaps most palpable whenever Energy Minister Gwede Mantashe, an already polarising figure in South Africa’s political economy, accuses NGOs of taking foreign funding to stifle energy investments. This, the minister has alleged, is part of a sinister scheme to undermine development in poor countries like South Africa.

Mantashe himself has been accused of having vested interests, but in maintaining the fossil fuel-powered status quo. These allegations have been directed at Mantashe in the wake of his perceived resistance to renewable energy — and his championing of new oil and gas investments — a stance which has seemingly played out in the minister’s dithering on entrenching a greener energy system.

But the back and forth between Mantashe and his critics captures just the outline of a much bigger picture.

As the Open Secrets report points out, energy has long been at the centre of South Africa’s economy, and thus an inevitable source of political wrangling. 

The minerals-energy complex, the report notes, was the bedrock of the apartheid economy and still has a negative effect on the country today, including insofar as it has hamstrung our transition towards greener energy. “While continued use of coal-fired power will be disastrous for the planet and the health of people in South Africa while having significant long-term costs, there are still short-term profits to be made,” the Open Secrets researchers write.

“Those who stand to benefit are already spending resources on slowing down the transition from coal and other fossil fuels. We should anticipate this fightback to become more pronounced as the push for a just transition gains pace.”

South Africa’s energy crisis — as well as the economic malaise it has precipitated — has proved convenient in this resistance. Coal is the old faithful in the country’s energy mix. It can do the heavy lifting. Renounce it to your detriment.  

Fossil fuel-powered economic growth has also long been used to justify environmental and human destruction.

But the discourse has shifted in recent years. We’ve been presented with a new cure to our energy and economic crises: energy from renewable sources, which hold the promise of ending load-shedding, as well as setting off an avalanche of investments. 

In this narrative, a fossil fuel-guzzling Eskom — which is at the centre of South Africa’s minerals-energy complex — has been cast as dirty, corrupt, resistant to change and, perhaps worst of all, bad for the economy. As historian Adam Tooze wrote earlier this year, in his analysis of energy’s role in the South African political economy, Eskom “has become a byword for dysfunction with rolling blackouts and a near permanent state of emergency in the power sector”.

This characterisation of Eskom, earned in the wake of a 15-year energy crisis, tends to ignore how the power utility got this way and the interests that have shaped it.

Moreover, as the energy crisis accelerates, it becomes easy to gloss over the other interests at play in the renewables pivot. Failing to recognise these could land us with an even more inequitable economy, in which our desire for growth and private investments again comes at a high cost.

Going green does not automatically inoculate us against the malevolence of capitalist extraction. Where there is money to be made — and in this transition there will be bucketloads — there is sure to be those entities looking to get as much as they can, even if it means operating in a way that is contrary to the greater good.

According to Open Secrets, South Africa’s renewable energy sector, established mainly through the Renewable Independent Power Producer Programme, stands to become highly concentrated, with many of the companies at its centre being dominated by international interests. This, the researchers contend, raises concern that the financial benefits associated with the programme will flow out of the country, reproducing a pitfall of the fossil fuel sector.

The report also highlights questions over the community ownership of these renewable energy projects. Each project company must have a degree of South African participation, as well as black and community ownership. “However, various concerns have been raised about possible abuses of these requirements. This includes the possibility of companies using community trusts — which are opaque and with little monitoring — as little more than fronts,” the report notes.

It is also important to acknowledge the role that climate finance will play in all this, especially insofar as it calls on the state to de-risk investments in renewable energy infrastructure. These financing regimes tend to socialise risks and privatise returns, as economist Mariana Mazzucato has put it.

To guard against malevolent private interests taking advantage of our very necessary green transition, we need a robust and well-resourced public sector — a difficult ambition that will be achieved in the wake of austerity.

For their part, the researchers at Open Secrets prescribe effective regulation of corporate interests, more transparency and reporting in relation to corporate spending

on lobbying, greater access to information relating to energy procurement, as well as efforts to counter monopolistic behaviour. 
Finally they recommend that we follow the money, noting that the potential corruption of politics amid the energy transition must bemonitored with great care. “It risks not only distorting policy but selling out the planet and people for a handful of silver.”