Abstracts

8 Challenges Lie Ahead Privatization is a polarizing proposition in a country with an unemployment rate as high as 29% in 2019. Although the introduction of competition to generation in South Africa may resolve Eskom’s debt crisis, address supply shortages, and improve efficiency and reliability, it is extremely politically controversial. Eskom employs more than 46,000 people, and coal mining, which supplies close to half its output to Eskom, employs 80,000—about 17% of the entire mining industry (Eskom, 2019a, p. 133; Bischof-Niemz & Creamer, 2019, p. 147). Both workforces are highly unionized and politically influential; the Congress of South African Trade Union (COSATU), for example, represents many of these workers and is directly linked to the ruling African National Congress (ANC) through the Tripartite Alliance. 8 The influence of unions has played a large role in the government’s reluctance to drastically transform the electricity sector. While threatening mass strikes in September 2019, COSATU demanded that no employee be retrenched during any turnaround of Eskom. These fears are not completely unfounded; analysts repeatedly cite addressing Eskom’s bloated staff as an essential part of any cost reduction measure at the utility (Ensor, 2019). Unions also often have expressed concerns that renewables were being introduced by profit- making interests, fueling narratives that any transition to renewable generation would negatively affect coal-related jobs and widen wealth inequality (Baker, 2014). 8 Established ahead of the 1994 elections, the alliance is comprised of ANC, COSATU, and the South African Communist Party. The three wings are very closely intertwined, particularly for the purpose of garnering support for elections. South Africa’s history with racial inequality shouldnot be ignored inany potential transformation of its electricity sector. Fears exist that the historically disadvantaged, mostly black communities, largely located in the poorer northern regions of South Africa, such as Limpopo and Mpumalanga in the Transvaal region, that have historically supported the country’s mineral-energy complex, will be the most negatively impacted by a transition away from coal. Jobs aside, coal-fired power stations have also spurred economic activity by bringing much needed infrastructure development in the form of roads, schools, and shops to communities. Thus, any successful transformation of the electricity sector would need to be implemented in a way that not only mitigates potential negative societal impact for such communities but also challenges the legacy of inequality left by apartheid . Some evidence exists that Eskom can be restructured, and the electricity sector transformed, without negatively harming jobs in the long term. A colossal coal-fired power station may be a more visible employer than a modest solar orwind farm, yet a study conducted for South Africa’s Integrated Energy Plan (IEP) demonstrates that new solar and wind projects would provide more new employment opportunities than coal in South Africa (cited by Bischof-Niemz & Creamer, 2019). Solar PV and wind farms have lower capacity factors than coal stations due to the variability of sunshine and wind speed. They also generally have shorter lifetimes. Therefore, more solar PV and wind generation capacity must be installed more frequently than comparable coal-fired capacity to consistently provide the same amount of electricity. This allows solar and wind technologies combined to provide more direct jobs than coal (Table 2). The IEP Table 2 Permanent Jobs from Producing 100 TW Hours of Electricity in Perpetuity by Source Direct Jobs Indirect Jobs Total Jobs Coal 20,486 7,696 28,182 Solar and wind 26,475 10,517 36,992 Source: Adapted from Bischof-Niemz & Creamer (2019, p. 141).