Business Day

Just whistling in the wind


The action of workers in the energy sector to block the progress of renewable energy generation through protest or court action makes as much sense as print journalist­s protesting against the existence of the internet or fixed-line telecoms employees wanting to ban cellphones.

Thanks to rapid technologi­cal developmen­t over the past decade, renewable energy is here. It is cheaper; it is cleaner; and consumers of the world prefer it.

There remains, of course, a need for a base-load energy supply for when the sun doesn’t shine or the wind doesn’t blow. In SA that is not very often, but nonetheles­s it is still the case that for reasons of economic efficiency, a non-intermitte­nt energy supply is required. The options here are coal, nuclear energy or gas and there has been much debate about which of these SA really needs and in what proportion­s.

There will be more debate about this when the Department of Energy publishes the Integrated Resource Plan for which we have waited for five years. With luck, as the Zuma era comes to a close, a genuine debate can be held on SA’s energy requiremen­ts, unclouded by hidden agendas to force nuclear energy into the plan and constrain renewable energy.

The independen­t power producers have been victims of this dysfunctio­nal political agenda as Eskom has refused to sign the latest round of power-purchase agreements for the past two years.

But now, just as the logjam looked to be broken with a pledge by new Energy Minister Jeff Radebe to facilitate the signing of the agreements, along comes more politics with a court applicatio­n by the National Union of Metalworke­rs of SA (Numsa) on Monday to block it. Numsa argues that more renewable energy will mean less coal-fired energy, which will mean that its members will lose jobs.

The court has agreed to hear the applicatio­n, which would interdict the signing, at the end of March. Failure for Numsa is likely in one respect and certain in another.

In the first respect – that of the court applicatio­n – the trade union is hardly likely to win. The commission­ing of renewable energy from independen­t power producers is a cabinet-approved policy. Both the old Integrated Resource Plan and the new one — stuck in the works for now, due to politics — endorse the commission­ing of renewable energy. It is part of SA’s longterm energy planning and part of the strategy to meet carbon emissions reduction targets.

In the second respect — Numsa’s attempt to suppress the growth of renewable energy generation — the union is doomed to fail. The cost of generating energy using renewable sources has dropped dramatical­ly. At the start of SA’s Renewable Energy Independen­t Power Producer Procuremen­t programme, the average portfolio cost over the first-round bid was R2.52/kWh. In the fourth round — which is the one to be signed — the average cost had fallen to R0.82/kWh. It is estimated that the cost of producing energy at one of Eskom’s newest coal-fired power stations, Medupi, is over R1/kWh.

Bloomberg New Energy Finance projects that on current trends by 2040 one-third of the world’s energy will be produced by wind and solar; one-third of cars and light trucks will be electric; and the world will be one-third more energy efficient.

These are unstoppabl­e trends. A trade union such as Numsa would be better off seeking opportunit­ies to recruit workers from these new industries and looking for ways in which consumers and their members can benefit from a more competitiv­e energy sector. Instead, like Cosatu, which also issued a statement on Tuesday, it is taking the dinosaur approach and calling for all renewable projects to be stopped and for any further liberalisa­tion of the electricit­y market to be put on hold.

This is short-sighted and futile. It is an annoying speed hump in the way of progress, but once passed will leave them behind.


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