SUMMARY: The Chamber of Mines Coal Leadership Forum, consisting of coal executives, commissioned a report to determine what needs to be done to increase the profile of the coal mining industry in the face of seemingly ineluctable negative public opinion around the use of coal in industrial processes. The report draws attention to the three industries and sectors (electricity sector; liquid fuels manufacture and basic iron and steel industry) that will be adversely affected by enforcement of strict environmental laws in South Africa. The report also considers the impact on coal exports. Domestic constraints are outlined, including factors likely to result in reduced demand for, and supply of, coal.

KEY FINDING / RECOMMENDATIONS: Four scenarios (2016-2050) with associated coal demand growth rates are presented, from a 1% decline in total coal demand, with nuclear power and renewables supplanting coal as the main primary energy source and environmental and water regulations suppressing coal use, through to a 5% increase in demand growth due to a leap in clean coal technologies, and increase in export demand leading to higher investment and government policy supportive of the industry.

SUMMARY: This report promotes an ecosystems-based approach to promote environmental sustainability and addresses the challenges outlined in the National Development plan. It puts forward forming a Just Transition taskforce driven by the presidency to support the transition process. Several proposals are made to offset the risks of job-losses and support employment creation and intensification in the transition process.

KEY FINDING / RECOMMENDATIONS: Among proposals for job creation/intensification are, in mining, absorbing laid-off miners in infrastructure development, and repurposing abandoned mine shafts for pumped storage of electricity and for other economic activities; in manufacturing capitalising on the construction, installation, and operation of clean energy technologies including green transport vehicles, localising where the country can compete with imports manufacturing renewable energy technologies and localising production of water treatment and water conservation technologies and manufacture; and in energy enabling Eskom to invest in renewable energy.

SUMMARY: The brief looks at funding opportunities available for South Africa’s key manufacturing sectors. Particularly, it highlights the different dynamics and constraints in the financing spectrum of these sectors and offers recommendations on how SA can address challenges such as employment and job creation. The brief also proposes ways in which DFIs can secure additional funding, for example through taxation from individuals and large corporations. It further highlights the risks associated with sourcing additional funding through tax and offers possible risk-mitigation strategies

KEY FINDING / RECOMMENDATIONS: Because of their high-risk nature and low short-term profit opportunities labour-intensive manufacturing sectors in South Africa suffer from inadequate financial support. Current funding models limit the ability of DFIs to fully fulfil developmental mandates. The Industrial Development Corporation (IDC) and Development Bank of Southern Africa (DBSA) need government guarantees and stable, low-cost sources of funding. South Africa needs to create an export-import (EXIM) bank to boost the competitiveness of exported goods and services. The IDC needs to be redirected to target labour-intensive, high value-added sectors, rather than sectors that are already commercially viable and have private bank financing.

SUMMARY: As part of the Draft IRP 2016, the CSIR engaged in the public consultation and submitted comments primarily related to establishing a Least-cost Base Case, technology new-build limits (on solar PV and wind) and aligning costs to the latest Renewable Energy Independent Power Producer Programme (REIPPPP) Bid Window outcomes. The CSIR submission is a contribution to better understanding and improving on the current Draft IRP 2018.

KEY FINDING / RECOMMENDATIONS: The CSIR recommends, among others, transparency in all input assumptions, models and outcomes, comprehensively and consistently published; establishing annual technology new-build limits. In the interim, annual new-build limits on any new-build technologies should be removed until further investigations establish the need for them; explicitly including economic impacts of scenarios in future IRP iterations. At the very least, employment impacts should be analysed and published.

SUMMARY: The reflection paper provides the basics of a Just Energy Transition (JET) in South Africa, highlighting the reasons a JET is needed. The paper investigates ownership of the national Renewable Energy Independent Power Producers Procurement Programme (REI4P) projects so as to access the distribution of local versus foreign ownership for these projects. This was done to address the concern that financial benefits from these projects do not stay in South Africa. The paper outlines the type of community ownership which can drive JET and outlines international success stories for community energy ownership, the considerations and issues that could affect community energy in South Africa, and the next steps for REI4P in the context of community ownership.

KEY FINDING / RECOMMENDATIONS: The paper notes among others that clarity is needed about how the structure of Eskom would be compatible with community energy; political interference and vested interests in coal are raised as a concern; policy uncertainty exists in the energy sector; feed-in tariff is currently illegal in terms of Treasury regulations. Funding should be relocated to local manufacturing of renewable energy and development of the sector; municipal finance models need to change to accommodate community energy.

SUMMARY: The book looks at how South Africa moved from cheap, abundant, and unconstrained energy to its current state. The authors explore ways to allow South Africa to return to an era of cheap and abundant electricity. It seeks to show the advantages of a renewable energy-led electricity mix, looking at the costs, job creation, and how an energy transition can lead to a more competitive industrial economy, create new trade opportunities, accelerate economic development, and re-establish South Africa as a preferred electricity investment destination.

KEY FINDING / RECOMMENDATIONS: The book reckons a coal-based energy system is no longer economically viable. Cheaper alternatives such as solar power and onshore wind have proven more competitive and a feasible alternative. The low cost of a renewable energy system with solar and wind energy will enable SA to host a power system mix of renewable energy technologies and progressively pursue a large “electrification of just about everything.” However, wholesale privatisation of generation assets may not be politically feasible in South Africa and significant changes in the supply mix can only be expected 10-20 years down the road.

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SUMMARY: The report highlights the impact of coal mining on the Mpumalanga Highveld. The research presented focuses on social, gender, worker and environmental justice. The report is written from a legal and campaigning perspective and speaks about what is wrong on the Highveld while presenting possible ways forward.

KEY FINDING / RECOMMENDATIONS: The book recommends for a Just Transition for coal regions, et al: building a new energy system based on socially owned renewables, with jobs in manufacturing as well as construction and operations; rehabilitating individual mines and the mining regions; encouraging people’s food gardens as a first step towards creating a healthy food system; reconstructing settlements in anticipation of the extreme weather conditions associated with climate change.

SUMMARY: The future of coal is uncertain. The paper analyses the factors driving the fall in demand for thermal coal, presents scenarios on the global coal consumption for 2010-2050, as well as the potential impacts of declining global demand scenarios on major coal producers, consumers and investment. The scenarios on which the paper builds are based, on top-down information on global and regional energy system development, as well as on bottom-up national energy sector information made available to the project team.

KEY FINDING / RECOMMENDATIONS: Even without more stringent climate policy, the balance of risks and opportunities for the global coal market appears significantly on the downside. Factors such as the decreasing energy intensity of “late mover” developing countries’ growth pathways, local air pollution and technological advances reflected in the quickly increasing cost competitiveness of renewables can plausibly drive a significant decline in global coal demand. The scenarios explored in this report suggest that it is time for governments to begin to implement credible transition policies. A first step for policy makers to manage these uncertainties is through a focused dialogue on the future of the sector in their respective countries.

SUMMARY: The report explores pathways to implement coal transitions and summarises key findings from case studies in six countries (China, India, Poland, Germany, Australia and South Africa). The report also draws from findings in earlier phases of the project, including global analysis of the impact of coal transitions on steam coal trade and analysis of past coal and industrial transitions in over 10 countries, as well as political economy aspects of coal.

KEY FINDING / RECOMMENDATIONS: Coal transitions are already happening. Due to both climate and non-climate policy factors, global coal consumption is likely to reverse in the early 2020s. The analysis of the techno-economic scenario required to stay below 2°C temperature increases for all six countries showed that by 2040-2050 coal can be replaced with a portfolio of alternative energy sources. Coal transitions can strengthen global climate action and deliver other social and economic objectives. In South Africa, diversification from coal in the power sector would help reduce the cost of supplying electricity while limiting the risk of cross-subsidisation of the power sector by the coal export sector.

SUMMARY: The report looks at the risks of a development strategy that continues to rely on coal for energy security, employment, and growth. Three pathways are identified. The first, the least-cost energy pathway, assumes no climate-change mitigation policy is implemented beyond a gradual phasedown of coal power as stations reach their end of lives or become uncompetitive, a scenario in which South Africa would meet its nationally determined contribution (NDC) by 2025 and 2030 in terms of the Paris agreement on climate change. The second and third scenarios look at the impacts on the coal sector of South Africa meeting the lower range of its domestic climate change-mitigation objectives.

KEY FINDING / RECOMMENDATIONS: Moving from the NDC scenario to the scenario with emissions consistent with a low peak, plateau, and decline trajectory will require an accelerated phase out of large emitting infrastructure. The economic results show that meeting climate change targets and growing the economy is possible. Large investment in new renewable energy will have positive spin-offs, including net positive employment impacts in the electricity sector. While results are positive workers at coal-fired stations, mines, and the communities remain at risk if there is no orderly and properly resourced transition.