When Stopping Coal Plant Closures Makes Environmental Sense

Coal versus Clean? South Africa’s Energy Wars

South Africa could be the place where the fight for a Just Transition could be elevated into a sustained union-led national campaign. It is worth reminding ourselves that it was the militant strikes and grassroots organizing that helped give birth to “social movement unionism” during the fight against Apartheid. Just as South African labor took the lead then, it can do so again—in a way that can build a powerful movement for a transition to a socially and ecologically sustainable political economy that could inspire unions and social movements everywhere.

The country’s energy sector is presently a political battleground where the national utility, Eskom, and private renewable energy companies (known as Independent Power Producers, or IPPs) are locked in an acrimonious war. Eskom controls 96 percent of the electricity market and serves this market almost exclusively by burning coal. South Africa is ranked among the highest emitters of pollution and greenhouse gasses (GHGs) in the world. The ruling African National Congress (ANC) has backed the private renewable companies as a means of both bringing more wind and solar power into the electricity mix, and to attract foreign investment.

Eskom has gone to some lengths to turn public opinion against both private renewables and renewable energy as a whole—citing the high costs of power purchase agreements signed with wind and solar multinationals and their local proxies. These agreements guarantee that the government will pay a fixed energy price over twenty years that will both lock in profits and give access to the public grid system. Needless to say, these agreements have won accolades from the likes of the World Bank and the global “investor community” for being a model partnership between the public and private sectors. ²

Threatened Coal Plant Closures

In March 2017, Eskom announced the ahead-of-schedule closure of five coal-fired electricity power stations. Eskom claims that, because it had been mandated by government to buy the power at a higher than market price from the private wind and solar producers, this had both raised the price of electricity for consumers (prices have risen 50 percent in just a few years) and left the utility generating coal-fired power that it could not sell. Unable to cover its own costs, Eskom said it had no choice but to make plans for the shutdowns, putting at risk roughly forty thousand jobs.

Unions responded angrily to the Eskom announcement. Today, unions are deeply divided on a range of issues, principal among them being the relationship of unions to the ANC. But the positions taken on the closure plans may provide the building blocks of a national campaign that could, perhaps, also help rebuild some kind of unity.

. . . Eskom said it had no choice but to make plans for the shut downs, putting at risk roughly forty thousand jobs.

The two main federations, the Congress of South African Trade Unions (COSATU) and the newly formed South African Federation of Trade Unions (SAFTU), along with key unions the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (NUMSA), not only oppose the closures, but they have also criticized the partial privatization of the electricity system through the private renewable companies. Unions have also criticized Eskom for its inefficiency, mismanagement, and corruption. Strike actions against the closures have also been threatened.

A Transition to What?

Some of the components of a national campaign are therefore in place. But to win broad-based popular support, the campaign must be built around a clear vision of an energy future that addresses core worker and wider social and ecological concerns. Such a plan would need to go beyond the narrow conceptions of a Just Transition, whereby the goal is limited to protecting the livelihoods of workers who are in the immediate firing line—in this case, power station workers.

Clear programmatic commitments are needed. The first commitment must be to bring about a managed and carefully coordinated phase-out of coal for power generation and, over a longer period, for industrial processes where renewables are currently not a suitable substitute for coal. Thus there can be no defense of Eskom’s enduring commitment to coal and its hostility to renewables. But Eskom, which is today a publicly traded for-profit concern despite its status as a “parastatal,” must be reclaimed and democratized so that it can also play a role in bringing about a full-on energy transition.

The second commitment must be to scale up renewable energy in a manner that allows South Africa to take advantage of its abundant wind and solar potential and reduce its emissions. This means drawing a clear distinction between the government’s support for the private and for-profit renewable energy suppliers (a “privatization by stealth” approach) and a fully socialized and public renewable energy sector.

The third commitment will be to pivot away from an over-reliance on energy-intensive and export-oriented industries, such as gold, platinum, and diamonds. The corporations in this sector—known as the “Mineral-Energy Complex”—take advantage of highly preferential pricing for energy.

A Just Transition campaign therefore has the potential to provide protection for workers in the coal sector, create good jobs in renewables in the communities that need them, and also enhance South Africa’s contribution to ensuring global climate stability in a manner that could provide leadership to many other countries.

Problems with Union Policy

But getting unions behind these commitments will be a challenge. The unions’ ideological and other divisions pose formidable obstacles. Overcoming differences that exist on energy policy will require political shifts that, of this writing, are hard to imagine. But the unity expressed around the proposed closures is a good place to start.

One problem is that NUM has echoed Eskom’s claim that renewables are too expensive. “As much as we support green energy,” says NUM, “we cannot ignore scientific facts that green energy is not as cheap as it is portrayed by the capitalists who are dealing with it.” This position ignores two important cost factors: (1) the high social and environmental cost of coal and (2) the fact that power purchase agreements between the government and private renewable corporations protect the private investors that operate in this high-risk sector. This raises the costs of renewable power considerably—costs that then get passed on to the public in electricity rates. By associating renewable energy with the for-profit system, NUM is reinforcing Eskom’s overall anti-renewables position. ³

. . . [T]here can be no defense of Eskom’s enduring commitment to coal and its hostility to renewables.

For its part, COSATU—which since 2011 has taken strong positions on climate change—has declared itself “not hostile” to the private renewable companies. Yet COSATU’s position appears to reflect its loyalty to the ANC, rather than committed support for government’s renewables program—which it has already roundly criticized for not delivering the social benefits that had originally been promised.

In other words, both NUM and COSATU are not a million miles away from being able to get behind a national Just Transition campaign and its key programmatic commitments. Along with NUM, COSATU affiliates are not comfortable with the privatization of electricity via the introduction of for-profit renewables, and a shift in COSATU policy is conceivable.

Reclaiming Eskom

Few in the unions, leaders as well as rank and file, would oppose reforming Eskom in order that, once fully reclaimed to serve the public good, the company could play its part in planning the transition away from coal. But the ANC has embraced the neoliberal mantra regarding the need “to mobilize private investors,” to drive renewable energy. It has foreclosed on the idea that Eskom itself might build up wind and solar power as a public service.

Feeling threatened, Eskom is determined to keep its 96 percent control of the market by resisting renewables both politically and by delaying connecting wind and solar generators to the grid, or refusing outright to do so. In many countries, even a 5 or 10 percent penetration of renewables can bankrupt the centralized utilities (“incumbents”) like Eskom, especially when profit margins are already squeezed by falling demand for power. This has forced NUM, the main power-sector union, to close ranks behind Eskom to defend its members’ jobs.

. . . [P]rivate renewables will not deliver the energy transition South Africa and the world’s atmosphere both desperately need.

From an environmental standpoint, the reform of Eskom is crucial. Despite the announced closures, the utility proposes to add a lot of new coal-fired power in the next decade to meet the needs of the Mineral-Energy Complex. ⁴ Residents consume just 17 percent of South Africa’s electricity, so more capacity is not aimed at meeting the basic needs of ordinary people but is geared toward perpetuating the existing unsustainable model.

Moving the Environmental Nongovernmental Organizations

The success of a broad-based Just Transition campaign will also require that some of the main environmental nongovernmental organizations (NGOs) rethink their wholesale opposition to Eskom, currently written off as a dinosaur committed to impeding government commitments to integrate renewables. According to Greenpeace, “Eskom is clearly running an anti-renewable energy campaign, which must be stopped in its tracks.” ⁵ Therefore anything that can weaken Eskom’s sooty grip deserves loud and sustained applause.

Environmental NGOs have largely supported the government’s private sector approach to driving renewables. But the amount of renewables generated has hovered around four gigawatts—the equivalent of about six average-sized coal-fired stations. This is not enough to do anything significant in terms of emissions reductions. And at the present levels of growth, private renewables will not deliver the energy transition South Africa and the world’s atmosphere both desperately need.

Supporting Eskom’s proposed closures is therefore something of a poisoned chalice. It will separate the environmental movement from the unions with whom it should be allied. And whatever environmental gains the five closures might produce at the margins in terms of avoided emissions and pollution levels will be more than offset by the impact of “jobs versus environment” political fragmentation. This is why the Eskom closures should be opposed, but opposed in a way that might lay the political foundations for a more fundamental energy transition.

The Critical Ingredient—Social Ownership of Renewables

Unions in South Africa for the most part opposed the ANC’s turn toward neoliberalism in the mid-1990s and have a long tradition of supporting public services and opposing privatization and the incursions of foreign capital.

Therefore NUMSA’s call for social ownership of renewables, along with the reclaiming of Eskom, could provide the basis for unions and environmental groups to come together to spur a national Just Transition campaign. NUMSA—Africa’s largest union with more than three hundred thousand members—has since 2012 called for the creation of “a publicly owned and community-controlled renewable energy sector made up largely of parastatals and cooperatives.” Similarly, the recently launched new trade union federation, SAFTU, declared in its founding statement, a commitment to fight the privatization of Eskom “and develop a position on transition to socially owned renewable energy.” ⁶

Social ownership has the potential to deliver several key things that the present private renewables system is failing to provide, and it therefore should be a top-line message of a national Just Transition campaign.

First, it can bring to scale renewables’ deployment in a way that can take advantage of South Africa’s abundant wind and sun resources. These resources do not have a price tag and are essentially free. If harnessed for the public good and not for private gain, the health benefits alone could be enormous. Second, it can create jobs. A study conducted by the One Million Climate Jobs Campaign in South Africa calculated that if South Africa fully embraced wind and solar, it could, by 2030, create an estimated 150,000 jobs. ⁷ Third, it can introduce long-term planning to the energy sector, replacing the “enforced chaos” of private markets that ties the future of the planet and its people to the whims of private investors. This will allow for a transition that is truly just, bringing an end to the dumping of labor as if workers were merely residue from mining operations. Fourth, large-scale renewable power, because it would be located in every city, town, and village, can be maintained and operated at the local level, allowing for community involvement and system flexibility.

Supporting Eskom’s proposed closures . . . will separate the environmental movement from the unions with whom it should be allied.

A broad-based unity in support of a transformative plan for energy creation and distribution is possible. By adopting a movement-building perspective and strategy, South African unions and their allies have within their grasp the chance to lay the political foundations for a Just Transition that is truly transformative and leaves no worker or community behind.