No one answer to SA’s energy crisis

It’s no surprise that SA’s energy crisis has become top of mind for consumers and businesses as the rate and magnitude of load shedding continues to increase.

Recently, I came across a column by former Business Day and Financial Mail editor, Peter Bruce, wherein he makes a case for a swift transition from coal powered energy to renewable energy over the government’s proposal to first transition to an alternative to coal such as liquefied natural gas (LNG) to ensure a “just transition .

The concept of the just transition was first developed in the 1990s by North American unions to support workers who lost their jobs as a result of environmental protection policies. The aim of the just transition in SA is to ensure the protection of workers in the coal industry as the country moves to greener energy sources.

Bruce berates both energy minister Gwede Mantashe and the National Business Initiative for pursuing a change to LNG powered energy and says there is no merit in their doing so. But it as straightforward as that? While LNG is also a fossil fuel like coal, it has much less of a negative impact on the environment.

According to the US Energy Information Administration, burning natural gas emits 50% to 60% less carbon dioxide compared to a typical new coal plant, so it appears to be a sensible strategy.

However, Bruce is correct that a shift to LNG would result in our dependence on 100% imports. As he notes, Russia is the world’s fourth-largest LNG exporter and accounts for around 8% of the global LNG supply. With the war in Ukraine and sanctions imposed on Russia, commodity prices will continue to increase for as long as those sanctions continue. The collateral damage may include the slowdown of our energy transition to LNG and it will be more costly.

This is why Bruce argues for an immediate switch to renewable energy. But these sources cannot provide for a baseload (the minimum amount of electric power that needs to be supplied to the grid at any given time). What happens when the sun is not shining or if the wind doesn’t blow? Bruce fairly contends that we already have a solution for this in lithium-ion batteries but it’s not as clear-cut as that. His opposition to LNG seems to rest solely on the dependence on imports surrounding it but lithium presents a similar challenge. SA has no significant lithium reserves and there is only one lithium mine on the entire African continent.

Finally, Bruce boldly declared a just transition a “get-rich scheme”, seemingly dismissing the impact of transitioning to greener energy on the people within the coal industry as a non-concern. But the negative implications on employment in the sector are real and will be felt by ordinary South Africans. So, an analysis of all the options available is certainly not “fruitless”.

No matter which path is chosen whether a shift to LNG first or a direct transition to renewables jobs will be lost. LNG is not a panacea for the just transition.

It’s clear we need to start the move to greener energy production the world is fast moving away from coal. More importantly, we need to drastically reduce our impact on the environment.