Solar Energy Creating Value For A “Just Energy Transition”

03 October 2018

The global problem of climate change presents countries with the opportunity to improve their energy systems for the benefit of society and the planet overall. But labour unions, domestically and abroad, are worried that jobs would be sacrificed at the altar of environmental sustainability.

“The importance of balancing environmental objectives on the one hand and jobs on the other has been woven into the preamble of the 2015 Paris Agreement, which South Africa has signed,” says Dominic Wills, CEO of SOLA Future Energy.

This principle is known as the ‘just transition’.

“As one of the most carbon intensive developing nations in the world, South Africa needs considerable investment in renewable energy, such as solar and wind, in order to meet its international commitment of reducing greenhouse gas emissions,” says Wills.

Locally, the ‘just transition’ principle forms part of the draft Climate Change Bill, recently published for public comment. The Bill supports the government’s international pledge to reduce greenhouse gases.

In 2016, South Africa committed to “a long-term peak, plateau and decline trajectory” meaning carbon dioxide emissions would peak in 2025 before reaching a plateau and then declining. The target also specifies an intended emission range up to the year 2030.

Wills says a reduction in greenhouse gases is one element of a just transition, adding that “the renewable energy sector must create value for society, which translates into accessibility, affordability, inclusion and job creation.” The issue of ownership is vital to the discourse, so projects that rope in small power developers and communities are much-needed, he points out.

Globally, there are concerns that the labour intensive mining industry will be forced to shed jobs in the transition to a low carbon economy. However, a World Bank study predicts a rise in demand for minerals and metals needed to produce solar panels and wind turbines, should the international community stay on track to meet its climate change objectives.

In South Africa, the department of Trade and Industry (DTI) has emphasised[1] the importance of the manufacturing sector for job creation. However, in typically energy-intensive processes such as textile creation, automotive manufacturing and agro processing, cheap energy is required in order to make these industries profitable.

“As the levelised cost of solar energy is much cheaper than coal, it has the potential to bolster the manufacturing sector, creating more jobs in the process”, Wills added.

The South African government’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme is in line with the country’s commitments to the Paris Agreement.

“But, for these projects to truly create socio-economic value, they must empower home-grown developers and construction companies,” Wills explains.

He says the successful implementation of the Small IPP (SPP) programme, aimed at smaller scale projects with a focus on SMMEs, high black ownership and local supply chains is exactly what the renewable sector needs.

Independent Power Producers (IPPs) have reportedly created 35 702 full-time equivalent jobs and have spent R766 million on education, health, social welfare and enterprise development, according to figures provided by the ministry.

“Looking ahead, the potential exists for even greater localised ownership of projects similar to the Danish model of energy cooperatives where citizens are shareholders,” he says.

“With good policies and political will, South Africa can work towards a fair and inclusive transition,” Wills concludes.

[This piece was picked up by iAfrica News. It was also published in the print editions of Business Report.]

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