Don’t rush to cut coal, says sector lobbyist
Just energy transition needs to consider the effect on employees — World Coal CEO
The World Coal Association (WCA), a global coal industry lobby group, has cautioned SA against a rushed transition to a low-carbon economy at the expense of jobs.
SA’s coal sector is the third-biggest employer in the mining industry after platinum and gold, with 92,670 direct employees, according to the Minerals Council SA.
Michelle Manook, CEO of the WCA, told the Investing in African Mining Indaba this week that a just energy transition needs to consider the effect on these employees and their communities.
SA, which is heavily reliant on coal for power, is moving to lower its dependence on fossil fuels as part of global efforts to limit greenhouse gas emissions and address challenges posed by climate change.
The 2019 Integrated Resource Plan (IRP) says the reliance of the country’s electricity capacity on coal is expected to fall from 71% in 2019 to 43% in 2030.
Manook said that given SA’s unemployment rate is at 35.3%, and more than 90% of renewable energy jobs are temporary, the country should heed a warning against rushing through a transition without learning from the experiences of more developed countries.
She said that Spain lost 2.2 jobs for every green job created.
“In SA the renewable energy power producer programme has shown that renewables are an expensive way to create jobs. The future of coal is a mindset and an actualisation of what you want it to be.”
Manook believes coal remains a strategic asset, not a stranded one. She Iamented the decisions of financial institutions to pull the plug on financing coal-fired power plants, saying coal could be cleaned.
Financial institutions under pressure from shareholders to cut exposure to fossil fuels have announced climate change strategies.
Among them is Standard Bank, which said in March it will reduce the financing of power sector clients using mainly coal from 0.18% of total group advances in 2021 to 0.15% in 2026, and 0.12% from 2030.
Manook said: “I have been prompted to reflect on the behaviour of corporations and the investment community who appear to be listening more to shareholder activism and less to a broader group of stakeholders, and in particular communities and their livelihoods.”
Manook said coal-fired power plants are responsible for 130,000 direct jobs and a further 340,000 indirect jobs in SA. “A just transition needs to consider the effect on these communities and their future.”
Following the COP26 summit in the UK last year, SA is set to receive $8.5bn from rich nations, including the UK and US, to shift away from coal.
Manook said she finds it concerning that the $8.5bn is earmarked for closing coalfired power plants rather than phasing down unabated coal or developing nearzero target industries.
“Perhaps it is still open to discussion to include a more inclusive vision of a diversified clean technology system supporting a robust energy system which is aligned with the aspirations of the Glasgow climate pact.”
She said the goal of any energy transition or development of any minerals industry should not continue with a colonial bias; a just transition should address the inequalities of the past.
Council for Geoscience CEO Mosa Mabuza said the council is in the early stages of research into the use of carbon technology to reduce emissions from coalfired power stations.
The latest report by the council indicated that SA has at least 70-billion tonnes of coal reserves, while many coalfields are yet to be mined, said Mabuza.
Mabuza said the council had signed an agreement with the Development Bank of Southern Africa (DBSA) to support technological intervention to clean the country’s coal. “Is it possible to clean the coal? Are we brainwashed? We do not know, let us give science a chance,” he said.
“We agree that we need to work towards a solution. I ask that our financial institutions must be part of the solution, and some of the solutions lie in science. I must acknowledge the World Bank and DBSA and I look forward to many more institutions coming forward.”
Exxaro Resources CEO-designate Nombasa Tsengwa said the just transition should be about taking care of all stakeholders affected by coal mining. “At the end of the day we need to create resilient communities and nobody should be left behind.”
Minerals Council SA senior health and environment executive Nikisi Lesufi said moving to a lower-carbon economy should not compromise energy security, nor should it minimise or compromise the livelihoods of communities.
“It will never be fair even if one job is lost in the interest of another. SA has a high unemployment rate and every job is important,” he said.
In SA the renewable energy power producer programme has shown that renewables are an expensive way to create jobs
Michelle Manook CEO of the World Coal Association