/ 10 July 2024

South Africa’s energy policy prioritises profit over people

Eskom Holdings Ltd.'s Kusile Coal Fired Power Plant
The government’s support for coal-fired power and reluctance to transition to renewable energy undermines potential for economic expansion and job creation in the renewable energy sector. Photo: Waldo Swiegers/Getty Images

South Africa’s energy policy stands at a critical juncture, but one thing is clear, the current trajectory of energy policy is unsustainable and unjust.

With Eskom’s planned 44% price hike next year, and a new wave of City Power “load-reductions” targeting black neighbourhoods, the need for a fair and just energy transition has never been more important. The government’s “just transition” to renewable energy has failed, leaving communities such as Orange Farm  bearing the brunt of corporate and neoliberal policies.

Eskom’s excessive price hikes and targeted disconnections highlight a broader systemic issue: prioritising profit over people. This approach not only exacerbates inequality but also undermines the fabric of South African society. The government continues to amplify corporate pressures, leaving grassroots movements as the last line of defence against these injustices.

City Power recently implemented load-reduction because of network overloading from high demand in winter and electricity theft despite suspending load-shedding for 104 consecutive days. This inconsistency further emphasises the unstable and unreliable nature of the energy system, which disproportionately impacts marginalised communities.

There are also state-led processes including the $8.5-billion Just Energy Transition Partnership process. This initiative ignored local labour and communities in Mpumalanga, the country’s main coal-mining and power-plant province, at its design stage. In addition, the presidential climate commission, directed by Valli Moosa and Crispian Olver, is under scrutiny. Moosa has a history of promoting Eskom coal-fired power plants and has been involved in a corruption case, while Olver has been associated with dubious fundraising for President Ramaphosa’s internal party election. According to the Climate Justice Charter Movement, the Presidential Climate Commission process embodies a mix of “neocorporatist bargaining” and “stakeholder capitalism”.

YouTube’s The Big Debate South Africa episode on environmental justice underscored a lack of faith in the new cabinet and the prevailing cynicism towards state action. Nonhle Mbuthuma from Xolobeni voiced a sentiment shared by many: “Don’t have faith in the new cabinet.” This scepticism is well-founded, given the ANC-DA regime’s consistent failure to  meaningfully address climate and energy issues.

The global context further complicates South Africa’s energy woes. Substantive policy changes at home have not mirrored the international community’s shift towards renewable energy. The continued export of coal, particularly to Israel, underscores the hypocrisy of energy policies. Colombia’s coal boycott to Israel highlights the urgent need for a global coalition against fossil fuels. Local and international activism is crucial in shifting towards a more sustainable and just future.

The road ahead is filled with obstacles. The government’s neoliberal policies continue to undermine efforts towards a just transition. However, grassroots movements, supported by international solidarity, have potential to drive meaningful change. The fight for climate justice in South Africa is far from over but requires a concerted effort from all sectors of society to demand accountability, equity, and sustainability.

The appointment of Dion George from the DA as the new environment minister introduces a different set of problems. He has embraced an ideology suitable for the region and era, saying:  “Promoting local economic growth requires public-private partnerships, market liberalisation, property rights enhancement, trade openness, regulatory streamlining, and cutting red tape, labour laws that encourage job creation, scrapping of exchange controls, and a visa system that works.” 

Like others in the DA, George is flexible. He opposes a minimum wage for those between the ages of 18 and 35 and recognises the importance of welfare saying: “Government can increase the child grant to the poverty line [from R530 to R760/month]. Government can increase the zero-VAT rated basket of goods purchased by the most vulnerable 50% of South African households.”

While George’s advocacy for eco-modernisation and pro-business sentiments may seem progressive, they often translate into policies prioritising economic growth over genuine environmental protection. He repeats banal platitudes if given 25 minutes on national television. However, his core messages can be distilled into four key ideas:

  • George emphasises that battling climate change requires implementing technological projects funded through markets and foreign aid. But he fails to mention that 97% of the Just Energy Transition Partnership funds from the European Union, UK and US donors are loans, which must be repaid in hard currency. 
  • If the EU, UK, and US funders hit South Africa with the Carbon Border Adjustment Mechanism, a tariff on exported products made with high-carbon energy, George will become uncooperative because in his view, correcting a dysfunctional market (one that does not price in CO2 emissions damage) using a tariff, “is not a good idea”. This means he will depart from standard environmental-economic theory to become a climate-denialist when it comes to international trade. 
  • With South Africa having substantial coal reserves (53 billion tonnes), a rapid phasing-out of coal-fired energy is unlikely. George supports extending the lifespan of Eskom’s coal plants, arguing we must use its abundant coal resources. “We are sitting on a pile of coal. That’s what we have here. We’ve been using that. It was inevitable that we would use that for energy. You cannot change it. The fact of the matter is, we don’t have enough electricity on our grid.” George also avoids addressing the disproportionate energy consumption by 27 multinational corporations.
  • George says he not only values nature but considers it a commodity. So when asked whether “environmental impact studies are being used to block big projects that could have huge economic outcomes”, such as offshore fossil gas and oil exploration whose Scope 3 greenhouse gas emissions will be enormous, George replies in a manner that ignores the climate threat from burning oil and methane gas. “If you look at exploration, if there’s going to be exploration off the coast, for example, there’s an impact on the ocean ecology and communities reliant on fishing. As you know, my background is in finance. If you look at an economy, it’s a system. So, if we look at our system, for example, the economy, our natural asset economy, call it that.” Yet George does not apply a social cost of carbon, the $1 056 a tonne now being used by US economists – and instead simply asks that we strike a balance.  

As we navigate these tumultuous times, let us draw inspiration from the resilience and determination of communities such as Orange Farm. Their struggle is a reminder that the fight for a just and sustainable future is a collective endeavour. Together, we can challenge the forces of corporate greed and build a South Africa that prioritises people over profit.

Thabo Motshweni is a PhD candidate in the Department of Sociology at the University of Johannesburg.