Energy transition: Opportunities, challenges for decent work
AFRICA’s energy landscape is changing, but not in a uniform direction. New discoveries of oil and gas are accompanying the expansion of renewable energy generation. What does the continent’s energy transition hold for jobs and sustainable development?
Because of its vulnerability to climate change, Africa as a whole is facing the double challenge of tackling climate change and coping with its consequences on production, growth, and employment in all economic sectors. While adaptation efforts are already, and will continue to be needed, preventing the worst possible impacts of climate change from materialising is also critical. Otherwise, the achievement of the 2030 Agenda for Sustainable Development may be compromised. Indeed, over the past decade, climate change and extreme weather events have caused unprecedented damage in African countries, ruining infrastructure, threatening economic activity, and destroying jobs. The most visible manifestations are the droughts in southern Africa, floods in West Africa, and desertification of entire areas in the Maghreb region.
To be sure, African countries focus most of their attention on adaptation to climate change. At the same time, however, an increasing number of governments across Africa consider a sustainable energy transition as a central aspect of their climate strategies. In this regard, several questions remain to be answered. How to achieve a sustainable energy transition that delivers inclusive growth and jobs? How to reduce the gap in skills in order to unleash the potential for vibrant enterprises and green jobs? And finally, how to develop public policy frameworks that are conducive to a just transition for workers, enterprises, and communities? This article touches upon these issues.
Context and issues in Africa’s energy transition
Compared to the majority of fossil fuel-dependent industrial countries, the energy transition in Africa presents a distinct feature. With the exception of a few countries such as South Africa, most African countries are not in a situation of pressure where they need to phase out of coal to meet their energy needs through alternative energy sources. Africa’s energy transition rather faces two important challenges: modernisation and expansion.
Modernisation is about exploiting the continent’s vast endowment of renewable energy resources, including biomass, wind, solar, and hydro-power potential. It also implies moving away from the use of inefficient and hazardous forms of energy by over 700 million people and towards the deployment of modern fuels and sources of energy for cooking, heating, and lighting. In the fossil fuel sector (especially oil and gas), both resource and labour productivity need to be improved. Expansion is about bringing to scale adapted technologies to meet the energy needs of a growing population of 1,2 billion people, of which only 30 percent have access to reliable electricity.
Globally, we are witnessing a shift in the energy landscape, away from fossil fuels and towards less-polluting sources of energy. In Africa, however, a closer look reveals a different picture. On the one hand, there is an expansion in energy generation from renewables. For example, the recently launched Taiba Ndiaye Wind Project in Senegal will generate 158-megawatt of additional capacity. In Ghana, the planned Nzema Solar Power Station will be the largest installation of its kind in Africa, and it is expected to increase Ghana’s electricity generating capacity by 6 percent and allow nearly 100 000 homes to benefit from clean energy. Morocco, a pioneer in this area, seeks to deploy about 1,5 gigawatts of solar and wind capacity across the country to meet its goal of increasing the share of renewables in its energy mix to 42 percent by 2020. In April 2018, South Africa signed contracts with 27 independent renewable energy power producers, worth US$4,6 billion, to produce 2 300 megawatts of electricity over the next five years.
While the African energy landscape is changing, it is not in a single direction. The energy transition is complex and has important ramifications for the structure of economies and future development prospects. Climate change is an essential aspect to it, but so are many other key aspects of the sustainable development goals, such as reducing the health impact on women and children of the use of inefficient cooking fuels; powering productive industries in rural areas and modernising agriculture; and the overall improvement of living conditions.
What are prospects for new job creation?
Studies by the International Labour Office and other institutions have pointed to four types of possible impacts of climate change and greening policies on labour markets. Firstly, the expansion of greener products, services, and infrastructure will translate into higher labour demand across many sectors of the economy, thereby leading to the creation of new jobs. Examples include jobs in renewable energy, energy efficiency, manufacturing, transportation, and building and construction. In addition to direct jobs, indirect employment is created along the supply chains, including in the building of necessary infrastructure. And as new income is generated and spent across the economy, further employment is created.
Secondly, some of the existing jobs will be substituted as a result of transformations in the economy from less to more efficient, from high-carbon to low-carbon, and from more to less polluting technologies, processes, and products. Examples include the shift from the manufacturing of internal combustion engines to the production electric vehicles, as well as the energy transition itself, as clean energy replaces fossil fuels.
Thirdly, certain jobs may be eliminated, either phased out completely or massively reduced in numbers, without direct replacement. This may happen where polluting and energy- and materials-intensive economic activities are reduced or phased out entirely, such as in the closing of inefficient coal mines.
Finally, many, and perhaps most, existing jobs (such as plumbers, electricians, metal workers, and construction workers) will simply be transformed and redefined as day-to-day workplace practices, skill sets, work methods, and job profiles are greened. For instance, plumbers and electricians can be reoriented to carry out similar work with solar water heating or solar photovoltaic systems.
On the energy transition more specifically, two common questions are whether clean energies generate more employment than fossil fuels, and whether this applies in the context of Africa. Several studies indicate that renewable energy technologies create more jobs than fossil fuel technologies. One study concludes that per dollar of expenditure, spending on renewable energy can produce nearly 70 percent more jobs than spending on fossil fuels. The International Renewable Energy Agency (IRENA) estimated that the renewable energy sector employed nearly 10 million people worldwide in 2016, with 62,000 jobs in Africa. Nearly half of these jobs are in South Africa and a quarter in North Africa.
In relation to the notion of modernisation mentioned above, replacing the millions of kerosene lamps, candles, and flash-lights used in many African countries with modern solar lighting can provide a cheaper alternative and stimulate green jobs. A study found that replacing these lighting systems with modern solar lighting technologies for people living outside the grid could create 500 000 new jobs related to lighting in countries of the Ecowas region.
More than 10 million young African men and women are expected to enter the labour market each year over the coming years. Most analysts tend to agree that the traditional public sector will not be able to absorb this new work force. Entrepreneurship and self-employment are indispensable to create quality jobs in large numbers, and the energy transition can play a central role in this regard. For that to happen, skills development and upgrading, entrepreneurship promotion, and enabling policy and governance frameworks are required.
Various intervention models and programs to promote job creation in clean energies have shown a clear advantage of combining technical and vocational training with entrepreneurship training. Particularly for African countries, entrepreneurship and self-employment are becoming priorities in youth employment strategies and policies. — ITCSD.