Economist cautions that cost of alternative energy ‘still too high’

As South Africa seeks funding for a multitrillion-rand plan to transition from fossil fuels to renewables, aimed at achieving a zero-carbon economy, a leading economist has cautioned that the cost of alternative energy is still too high.

Mineral Resources and Energy Minister Gwede Mantashe said last weekend the just energy transition (JET) should not be done at the expense of the livelihoods of mining communities, industry and workers – mostly based in coal-rich Mpumalanga.

With deliberations at the United Nations (UN) Conference of the Parties (COP27) in Egypt expected to focus on plans, finance and fossil fuels, South Africa has said it will require at least R1.5 trillion to fund the JET.

While supporting a progressive switch to renewables to counter the growing impact of climate change, University of Johannesburg associate professor of economics Peter Baur warned: “The cost of alternative energy is still high, with a change from the traditional fossil fuels to wind and solar going to add huge costs to the system, which most developing countries cannot afford.

“This implies that people living within developing countries are literally stuck between a rock and a hard place.”

Baur said the reality was that the global climate was “expected to change more rapidly than previous years’ estimates”.

“According to the UN, climate change is now responsible for the intense droughts around the world, water scarcity in many regions, outbreak of severe fires, rapidly rising sea levels, increased rates of flooding and often associated with intense storms. Most of this is due to the huge increase in pollution emissions.

“If insufficient effort is made by developing countries, the problem of climate change will become an even greater challenge in the long run,” said Baur.

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In its projections, the World Health Organisation expects climate change over the next 20 years to cause about 250,000 additional deaths per year from malnutrition, malaria, diarrhoea and heat stress alone, leading to soaring health costs.

Given the current local supply of alternative energy being “insufficient to close down mines”, Baur said many developed countries have used fossil fuels indiscriminately in the past “to achieve the high economic development status that they now enjoy”.

“I believe the change to alternative energy is still important, especially given that energy prices will continue to rise.

“To make energy more sustainable in the future, very strong steps should be taken to encourage the development of alternative energy, while supporting those that may be affected by developing skills, which will support the transition into the alternative energy sector.”

Just energy transition must involve everyone

Supporting Mantashe’s all-inclusive consultation with all stakeholders on the introduction of JET, Congress of South African Trade Unions national spokesperson Sizwe Pamla said: “What is critical is for that transition to be just, to include directly and indirectly employed workers and their host communities.

“We cannot afford to leave behind workers, whether employed at Eskom coal plants, coal mines or communities.

“If we fail to plan, then workers will be sent to the unemployment queue and ghost towns will be created, especially in key coal areas of Mpumalanga.”

South Africa, said Pamla, “has a triple crisis of a shortage of energy generation, dangerously high unemployment levels and pollution and climate change”.

“They are all devastating for workers and all need to be tackled simultaneously.”

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He said the labour federation had “long championed the need for a just energy transition”.

“We have made this a central pillar of the Eskom social compact. Workers, unions and communities, must be included in the JET plans.

“Workers at risk must be upskilled and placed in alternative jobs, as needed. Power stations that have reached the end of their intended lifespans should, where possible, be extended.

“Where this is not possible, they should be converted to alternative energy generation.
“If this is not possible, there should be investments into alternative economic opportunities,” said Pamla.

– brians@citizen.co.za