SUMMARY: The report provides an annual review of Sam Tambani Research Institute (SATRI) activities for the period 2018 to 2019 (the 5th financial year in existence) on the socio-economic welfare of workers (and their communities) in the Mining, Energy, and Construction sectors in Southern Africa. SATRI has been sensitive to workers’ interests in influencing the country’s energy policy direction . The realisation was that the energy sector is a key employer and pivotal sector of the South Africa’s economy.

KEY FINDING / RECOMMENDATIONS: The energy sector has important linkages with almost all other economic sectors of the country including mining, trade and industry. The concern is that the wrong energy policy could lead to direct job losses in the energy, mining and other sectors and limit government ability to use energy as a development tool in the quest to achieve National Development Plan objectives.

SUMMARY: The document sets out actions to overcome the crisis at Eskom and put it on a new path of sustainability, in the form of a roadmap. Key steps in transforming the electricity supply system include the energy sources proposed by the 2019 Integrated Resource Plan. Actions to restore Eskom’s finances include government support. Measures are identified to reduce Eskom’s cost structure to enable provision of affordable electricity. Processes are outlined through which the restructuring of Eskom will take place, and through which a new transmission entity will be established.

KEY FINDING / RECOMMENDATIONS: The reform of Eskom, through retiring end-of-life power stations and diversifying primary energy sources, will minimise the impact on the utility’s workers and in related industries and communities. In managing the transition, alternative economic activities will be implemented to economically sustain communities dependent on the power stations and associated coal mines. The reforms require capable leadership and personnel at Eskom and greater transparency in the governance of both Eskom Holdings and the subsidiaries. The roadmap notes “tough decisions will have to be made” and all institutions, organisations and citizens will have to play their part in achieving a sustainable electricity supply system.

SUMMARY: The report provides a high level overview of the IPPPP and IPP Office activities for the latest available reporting period, including the contribution of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

KEY FINDING / RECOMMENDATIONS: The IRP 2019 calls for 37 696 MW of new and committed capacity to be added between by 2030 from a diverse mix of energy sources and technologies as ageing coal plants are decommissioned and the country transitions to a larger share of renewable energy. By 2030, the electricity generation mix is set to comprise 33 364 MW (42.6%) coal, 17 742 MW (22.7%) wind, 8 288 MW (10.6%) solar photovoltaic (PV), 6 830 MW (8.7%) gas or diesel, 5 000 MW (6.4%) energy storage, 4 600 MW (5.9%) hydro, 1 860 MW (2.4%) nuclear and 600 MW (0.8%) concentrating solar power (CSP).

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SUMMARY: The Integrated Resource Plan is an electricity infrastructure development plan based on least-cost electricity supply and demand balance, taking into account security of supply and the environment. The plan is a living document and is revised regularly. The promulgated IRP 2010–2030 identified the preferred generation technology required to meet expected demand growth up to 2030. It incorporated government objectives such as affordable electricity, reduced greenhouse gas emissions, reduced water consumption, diversified electricity generation sources, localisation and regional development.

KEY FINDING / RECOMMENDATIONS: Actions to be taken include undertaking a power purchase programme to help acquire capacity to supplement Eskom’s declining plant performance and to reduce the extensive use of diesel peaking generators in the immediate to medium term; extending Koeberg power plant’s design life by another 20 years; converting existing diesel-fired power plants to gas; and preparing for a nuclear build programme of 2 500 MW.

SUMMARY: The study analyses the employment impacts of different plans for expanding electricity generation in South Africa’s power sector. The report assesses the skill attainment levels required for energy transition, and the potential for workers to transfer from the coal sector to the emerging renewable energy sector. Four scenarios, which consider two timelines, are presented. The short-term 2030 timeline is based on the expected electricity generation mix to meet the rising demand in the country and which is aligned with the National Development Plan 2030. The long-term timeline is based on electricity generation mix predicted to meet the projected growth in energy demand up to 2050, and considers the predicted decommissioning timeline of coal power plants.

KEY FINDING / RECOMMENDATIONS: The study finds among other things that increasing the share of renewables can raise employment by 40 % (580 000 job years) in the period 2018 to 2030; with the shift from IRP 2016 to IRP 2018 an additional 1.3 million jobs are created economy-wide by 2050, 17% in the power sector by 2050; most job creation in renewable power generation is within the high-skilled labour group (educational attainment level above Grade-12), although employment is also created in other skill groups; and declining global demand for coal is the largest impact factor for coal mining employment.

SUMMARY: The report looks at climate action policy and the developmental challenges South Africa faces in its approach to energy transition. These include high and rising unemployment and poverty levels in coal-dependent communities like Mpumalanga, education and skills deficits, lack of integrated industrial policy to boost labour-intensive sectors, and infrastructure constraints. To attain the objectives of the Paris agreement, total installed capacity must be 113 GW by 2030 and 240 GW by 2040 for electricity generation from wind and solar power, and renewable energy technologies should account for 67% of electricity by 2030 and 99% by 2050. .

KEY FINDING / RECOMMENDATIONS: South Africa is dependent on fossil fuel for energy, particularly coal. Due to the Paris agreement, net investment in the coal sector has declined at a rate of 10% a year as coal becomes increasingly uncompetitive. Considering the possible effects of the transition on employment and economic activity, the report suggests creating worker transfer programmes and integrated multipurpose retraining programmes, as well as diversifying industry outside of the coal industry to boost the attractiveness of the region and increase opportunities for economic linkages into other areas.

SUMMARY: The report draws on the experiences of various countries, including China, Canada, Indonesia, Germany, Asia, and South Africa, and the EU to analyse energy transitions and the future of thermal coal. The paper investigates the decline of thermal coal in the EU and USA and its dominance in China, and the experiences in Germany’s transition process, highlighting the need for region-specific agendas and policies cognisant of different markets. In exploring the transition, the paper looks at the structural changes and measures needed to ensure smooth and effective coal transitions.

KEY FINDING / RECOMMENDATIONS: Coal has become a risky and unfavourable area of investment in comparison to renewable energy due to economic and environmental pressures. As the demand for coal exports decline, many coal-dependent economies will begin to prioritise domestic industries and guard against international price fluctuations, leaving coal exporters exposed to downward market trends and the national energy policies of international partners.

SUMMARY: The report offers an analysis of the current energy system and its dynamics in employment, the current international shift from coal to renewable energy, the drivers of an energy system change in South Africa such as the falling cost of renewable energy, climate change, coal production, addressing socio-economic challenges, and the urgent need to reform Eskom. It emphasises the importance of a transparent and people-centred Just Energy Transition led by social dialogue and consultation, ensuring equality in all forms.

KEY FINDING / RECOMMENDATIONS: The main drivers for coal transitions are related to strengthening global climate action in line with the Paris agreement and pressures for emissions reduction, local climate-change policies, and lessening stress on the environment. A Just Energy Transition could lower electricity prices, increase energy access to remote communities through off grid renewable energy, lead to greater job creation, and reduce health and environmental costs if it is managed properly. South Africa can adopt lessons from other countries on the importance of stakeholder engagement to emphasise the economic argument for an energy transition, and proactive and efficient planning to manage the transition.

SUMMARY: The report examines the risks associated with a transition towards a low-carbon economy for South Africa’s government, municipalities, companies and financial institutions. The analysis not only quantifies the risks of South Africa’s transition but tries to forecast some potential benefits. The report also outlines the measures that South Africa and its partners can take to reduce climate-transition risk and avoid potential economy-damaging risk concentrations, and in so doing reduce the costs associated with the decarbonisation of the South African economy.

KEY FINDING / RECOMMENDATIONS: Several significant findings emerge, et al, the cumulative impact of a global low-carbon transition between 2013 and 2035 could be more than $120 billion in present value terms; 75% of the risk and potential impact is due to factors, policies, and events, beyond the control of the South African government; but South Africa can still mitigate much of the climate-change risk if it urgently develops the fiscal, financial and policy tools required to shift transition risk away from parties without the capacity to bear it and to capture transition-related upside.