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SAREC Responds to Concerns of Coal Sector Job Losses

Posted at March 8, 2017 | By : | Categories : News | 0 Comment

Decommissioning of coal-fired power stations has been part of government’s Integrated Resource Plan since 2011. It is interesting that Eskom and its allies within the Coal industry have chosen this moment to connect closure of Coal-fired power stations to Renewable power. Rather than acknowledge the fact that it has a legal obligation – as sole power purchaser – to purchase duly procured power, it is being opportunistically suggested that duly procured renewable power purchase is threatening coal jobs.

Decommissioning of power stations takes place over a 10-year period, and the decision to decommission power stations is taken within the Integrated Resource Plan. Renewable power is procured through government’s renewable power procurement programme.

To-date the REIPPPP has created 26 790 jobs for SA citizens, of which 24 838 were in construction and 1 952 in operations. The emphasis is on jobs for South African citizens from local communities. The 64 active projects (that have signed contracts with Eskom and have commenced construction) have committed to create 57 627 jobs for SA citizens over their lifetimes. Accelerating deployment of renewable energy will fuel economic growth, create employment, enhance human welfare and contribute to a climate-secure future. It is predicted by the IPP office that SA GDP could increase by 1.2% by 2030, 106 100 new jobs can be created and SA welfare can increase by 3.6% by 2030 – by consistent investment in RE.

47% of the programme’s jobs are for youth and women. Ten percent of the jobs created are for women. Of this, 33% are for women in top management in construction and 32% in top management in operations. As the IPP office put it in its November 2016 report, “since IPPs have consistently been overachieving on job creation targets, it is expected that employment opportunities will grow beyond original expectations.”

The South African Renewable Energy Council (SAREC) recognizes the urgency to achieve direct socio-economic transformation which results in the creation of jobs, investment growth and affordable electricity tariffs. SAREC further recognizes that transformation of South Africa’s energy supply system can result in job creation in new areas of the economy. It is common knowledge that South Africa, along with the rest of the world, is transitioning from coal to other energy sources.  This is a challenge being faced by countries, citizens and workers around the world.

SAREC is concerned about who has been providing workers with inaccurate information, particularly in the light that Eskom continues to refuse to comply with the law of the land, the instructions of the President and the clear recognition of RE contributions to the economy by the Finance Minister.

The following points are worth noting:

• In the 2016 update of the IRP, Komati, Hendrina, Arnot, Camden and Grootvlei power stations are due for decommissioning by 2030. Just recently, Eskom has performed a life extension exercise for the rehabilitation of these and the results were that extension would be too expensive.  Eskom has planned for some time to decommission some 27,5 GW of coal-fired plant by 2040 which will result in a total of 12 thermal plants being closed. This decision is unrelated to duly procured Renewable power purchase which Eskom has refused to conclude for over a year now.

• The construction of the Medupi and Kusile coal-fired plant which would replace a number of these old plants will result in a reduction in Eskom’s coal procurement by some 30 million tonnes per annum. This has nothing to do with renewable power purchase. This is an outcome of Coal investment decisions taken by Eskom and government.

• The reduced coal consumption of up to 10 million tonnes by 2021 is part of Government’s policy and it is consistent with South Africa’s climate change commitment. Eskom’s own ambition to procure and own 9,6 GW of nuclear plant by 2030 as anticipated in the 2010 IRP and which is consistent with the utility’s support for the “Carbon Budget / Nuclear” scenario of the IRP.