2 February 2019

South Africa: ESKOM and the Crisis of Energy Democracy - A Case for Safe, Socially Owned Renewable Energy

opinion

This paper discusses the crisis facing South Africa's state-owned company Eskom and its general relationship to people's struggle and the pursuit for energy alternatives.

There is an infamous story of Masakhane, a township in Mpumalanga, eastern South Africa, which became popularised in the Big Debate episode on Energy in the South African installation of the television programme. Located nearby four power stations, which feed into the national electricity grid: Duvha, Kendal, Matla and Ga-Nala, Masakhane is known as the energy Mecca of South Africa [[i]].

In an unsurprising case of contradictions, the residents of Masakhane do not have access to electricity despite having four power stations in their backyards. Instead, they live with the remnants of pollution generated by coal deposits, respiratory diseases such as tuberculosis, and with children dying as a result of air pollution. The 2017 Centre for Environmental Rights Report identified Masakhane as one of the most polluted places in the country, making it unsafe to raise children.

Millions of South Africans are unconnected to the national energy grid [[ii]], and many more struggle to pay the rising electricity bills on a monthly basis. The question, which arises, is: who benefits from the electricity generated by the nation's power stations? And, in particular, who stands to benefit from the current energy crisis?

Background

It is late for you if you do not know the answer to the former question, as it suggests you have been left behind by the woke-train over recent years. Households in South Africa are only responsible for 20 percent of total electricity consumption (Deloitte, 2017:19). Data compiled by the Department of Energy on South Africa's national energy balances shows that mining and manufacturing are responsible for just less than two-thirds of South Africa's total electricity consumption. The iron and steel industry alone, is responsible for 10 percent of total consumption; non-ferrous metals industry (aluminium) consumes a further 9 percent; and chemical industries a further 6 percent [[iii]]. In sum, the industrial, commercial and transport sectors consume approximately 75 percent of energy produced in South Africa.

The unravelling crisis presents a watershed moment for us to critically reflect on the ownership patterns and provision of energy in South Africa. Mirroring apartheid patterns of exclusion, poor black people disproportionately dominate the statistics of lack of access to electricity. On the other hand, established corporate giants like BHP Billiton have long benefitted from State contracts and subsidies with their historic roots during the apartheid regime [[iv]] . In fact, whilst the mining and manufacturing industry consume two-thirds from the national energy grid, they contribute to less than 30 percent of South Africa's gross domestic product (GDP) in contrast to the 70s when they contributed 45 percent to the GDP.

This was particularly illustrated with the case of BHP which uses at least 5 percent of total electricity in South Africa yet employing no more than 2 000 people before divesting from South Africa in 2014; shifting its profits outside of South Africa through its Australian based holding company South32 [[v]], all the while only paying less than a fifth of the cost that the average household pays to Eskom for electricity [[vi]], and currently employing only 200 people. In 2013, Eskom made a loss of R10.7 billion through supplying electricity to BHP Billiton.

To add further insult to the injury, it is deeply ironic that despite South Africa's abundance of coal, the current crisis is as a result of Eskom's coal suppliers refusing to deliver coal to the parastatal. We therefore present the argument for socially owned renewable energy.

To begin, we draw on the impending crisis of fossil-fuel based energy consumption and how that is destructive not only to the environment, but to the future livelihood and sovereignty of the continent, the health of workers in those mines and the health costs which have to be borne by those living in mining communities. Second, we outline the toxic patterns of ownership as it relates to energy provision and how these essentially mean that Eskom's mandate to provide electricity to our people cannot be met. This is important because we highlight why social ownership shifts the ranking of priorities and the determination of how the country's energy is used. Finally, we argue that if it is through state subsidies and funding that the coal mining industry is sustained through billions of Rands and bailouts through taxpayer money, renewable energy can and must be funded and subsidised by the state. This must be in conjunction with a development trajectory, which enhances people's control over their energy needs.

External costs of fossil fuel extraction

Africa is the most vulnerable region to climate change (Kotir, 2010). Whilst the aggregate contribution to carbon emissions by African countries is less than 4 percent of the global figure, it is predominantly poor and underdeveloped countries that will bear the brunt of climate change. Currently, five million deaths occur annually from air pollution, hunger and disease as a result of climate change (Climate Vulnerable Forum, 2012). It is estimated that by 2030, this figure will have risen to six million deaths annually, and more than 90 percent of those deaths will occur in developing nations (Guerrero, 2015). In leading the charge for repatriations from the global industrial north responsible for the climate energy crisis and the deaths of millions, it will be paramount for us, in part, to lead by example. Not only to save lives, but to also leverage an undeniable moral high ground to compel a more sustainable global world order.

Furthermore, the question of how we generate our energy is inextricably tied to how we meet our basic daily requirements of food security, water, and transport. The continent primarily relies on agriculture and subsistence farming to starve of hunger. In a country such as South Africa where 14 million people go to bed hungry every night, food security is a grave concern. These insecurities are further deepened as climate changes intensify. Arable land is shrinking, and current estimates project that by 2080 up to 20 percent of Southern and Central Africa's arable land will no longer be suitable for farming (Bassey, 2015). Land degradation caused by flooding, droughts and acid rain undermines African food sovereignty.

Countries in the industrialised global North are relatively cushioned from the impacts of climate change. Thus far, the most severe effects such as droughts and floods have predominantly displaced people living on the continent and simultaneously destroyed sources of earning a livelihood for farmers as crops and livestock were destroyed.

Despite the continued ringing of the death knell, Eskom is currently engaged in a project to build two of the largest coal fired power stations in the world. The primary premise of Eskom's argument rests on the fact that we have an abundance of coal. Yet, ironically, the current crisis has been brought on because Eskom does not have enough coal supplies at its power stations. This is despite the fact that South Africa is the seventh largest coal producer in the world (StatsSA, 2012). The current crisis boils down to the fact that the energy sector is a deeply undemocratic sphere, which panders to the interest of the market and not of communities or workers impacted by the lack of energy. Control of South Africa's coal mining industry, as with most other industries, is largely the purview of a small historically privileged elite.

In addition to food sovereignty, we must locate the mineral-energy complex within its proper geopolitical context. For this reason, it is critically important to flag and address the faux alternatives and solutions postured by the developed world in the global North. Through the power of technology, we are told that the current harms of coal production can be mitigated. For example, on the question of the shrinkage of arable land, genetically modified organism crops and biotechnology are being forced down our thoughts as plausible alternatives to starve off malnutrition and ensure food security. Not only are both these alternatives demonstrably false, they rely on technology most African countries do not own or have, thus undermining food sovereignty.

This is particularly important because whilst the global North is technologically advanced, it is a pipe dream to think such technology will be given to us freely. As the common proverb goes, the hand that feeds you controls you. The existing example of Monsanto forcing indigenous farmers in Tanzania to stop seed farming, and only farm using its patented seeds is a clear depiction of the future awaiting us should we go down this route. Farmers who persist using traditional seed exchange practises face up to 12-year prison sentences if they trade patented seeds.

In a country ravaged by poverty and inequality, where basic access to electricity is yet to be realised, these quick technological fixes must be called out for the expensive and unrealistic scenarios they present. Notwithstanding to the folly of accepting solutions from the same people who created the current crisis we are in and who currently benefit off of it, we must be cognisant of the deeper implications in so far as power relations are concerned.

Who stands to benefit from the crisis?

Whilst South African households are disgruntled by the latest phasing in of load-shedding across the country, it stands to reason that those immediately affected financially by the electricity outages are the industries and commercial sectors using 75 percent of the total energy produced in South Africa. In turn, this has a knock-on effect on the economy due to decreased productivity and increased costs, which by extension impacts the lives of ordinary folks. Over the long run, sustained load-shedding can result in a shrinking economy resulting in job losses and higher prices charged for goods and services.

Not only is the economic setup of South Africa quite telling with respect to the industries, which use electricity, the most, but it is quite unnerving that we have such little control over the various forces which influence many facets of our lives.

Whilst we may be in a moment of crisis, renewable energy provides an opportunity to reboot and reorganise the structure of South Africa's economy, by moving capital away from small concentrated holdings, to collective and social ownership. In so doing, the character and form of the economy would be fundamentally altered to reflect and advance a more equitable social order. By decentralising energy provision to allow for cooperatives to emerge owned locally by workers and communities, an entire value chain is opened up to create more jobs and break existing monopolies.

More importantly, existing ownership patterns are undemocratic as we are forced to live under the tyranny and at the whims of private capital. On the other hand, a social ownership of renewable energy means the power to decide how and where the nation's energy is used is given to the people and used for the people. This is important because it means that motivating factors of our energy production will not be primarily driven by the bottom line of established industrial giants. And because energy production is inextricably tied to the fate of the economy, it also means that we can begin to break away from South Africa's economic apartheid, which excludes the majority in favour of entrenching the wealth of a white minority.

We have a choice before us: we can either choose to continue bankrolling Eskom, whilst it makes losses due to contracts negotiated during apartheid to supplying electricity below the cost price to big industrial giants like BHP, and also from paying exorbitant prices to arrogant coal supplies who do not care about the future of this country. Or, we can decide to take another path, which ensures a sustainable and just development of society. Whatever the choice, there will be a party which benefits from the current crisis, because crisis creates opportunity. The major difference in this instance is that the benefit is not neutral - established industry in South Africa will continue to benefit and pillage off the backs of hard working black people as it did during apartheid. It is also working class people who will pay the price of continued extraction of fossil fuel with their livelihoods.

There is a lot at stake here, given how the provision of energy is the backbone of South Africa's economy. The actions of civil society may be decisive in challenging entrenched economic interests, which refuse to be unsettled. Our role must be to galvanise this moment to create the conditions where the wealth of this country can be fairly redistributed to its rightful owners.

We must also pressure the state to act in the interest of the people. It is through state subsidies and funding that the coal mining industry is sustained through billions of Rands and bailouts through taxpayers' money, therefore the financing for renewable energy is there, and existing funds can be redirected accordingly.

Just transition from below

The Independent Power Producers projects, which are slowly introduced into Eskom to transition from coal driven-energy to renewables-driven alternatives, may appear as a leap forward in addressing the ecological crisis that beset the world. It is undeniable that the ecological crisis requires an urgent response to decrease the rate at which the carbon economy is polluting the environment. But the manner in which it is approached by the Minister of Energy Jeff Radebe signals that the initiative is more business driven and business friendly than it is socially responsive.

The historical cost, which has been systematically imposed on mining communities has either been ignored or reduced to the matter of building roads and schools, which rarely materialises. It is a common practice for mining and energy companies to promise community development and skills-transfer programmes to the to-be-mined and displaced communities with very little intention to honour those commitments.

It is widely reported that the activities of coal mining have influenced the local ecosystem. The water, health, air and land of the local communities have been affected by coal activities. Of course, this comes with the reality that the very communities who are affected by the particulate matter directly or indirectly depend on mining activities for employment and livelihood. Their dependence on the coal economy demonstrates that they are caught in a precarious position: on the one hand coal mining has a serious consequence to their health while they depend on it for a livelihood. There is also an unequal distribution of power between companies and the local communities, the companies can use their resources and financial muscle to lobby and influence policy in their favour which communities do not have.

Health and safety is often a sticking issue among the workers at the production lines. This is usually accompanied by the low-income rates, which makes it difficult to access health facilities and fully provide to the families, which they come from. This perpetuates a social hierarchy that is predicated on environmental racism and a racialised economic setup where Black communities are often displaced by multinational companies and used as subsidies for cheap labour. This form of social and economic relation reifies the realities of gross inequality. It undermines our effort to do justice to the historical carry-over.

Just transition from below argues that all stakeholders must be consulted and engaged. But not all stakeholder sitting around the table hold the same power, some have more power than others to influence decisions and policy. Communities and labour should be at the centre of the conversation if we truly want to change the face of oppression and exploitation in South Africa.

We must also take into account the historic cost that has been carried by labour and communities as a result of corporate power over time. This means that communities and labour should be at the driving seat in shaping the transition towards renewable energy sources. That would be an attempt towards socially owned energy production that is responsive to the social and ecological demands. We agree with the National Union of Metalworkers in South Africa that the mineral - energy sector should be socially owned if we are serious about energy security and sustainable living.

* Thabang Bhili and Simon Rakei are part of the Alternative Energy Popular Education Programme: https://www.altepep.com

Disclaimer:The Alternative Energy Popular Education Programme has been invited to share their views by Power Futures South Africa, a platform to share accurate information, surface critical questions, and facilitate a space for engagement between stakeholders in the energy sector. We believe in the value of inclusivity, evidence-based discourse, respectful interaction, curiosity and integrity.

Endnotes

[i]https://mg.co.za/article/2018-10-12-00-political-expedience-is-the-final-insult-to-polluted-masakhaneaccessed on 2 February 2019

[ii]The percentage of households that used electricity for cooking increased from 57,5% in 2002 to 75,9% in 2017, and roughly 16% of South Africans do not have access to the main electricity supply. http://www.statssa.gov.za/publications/P0318/P03182017.pdfaccessed on 2 February 2019

[iii]Other commercial and government services consume a further 15% of the energy supply. http://www.eskom.co.za/Documents/EcoOverviewElectricitySA-2017.pdfaccessed on 2 February 2019

[iv]In 2013, Eskom made a loss of R10.7bn through supplying electricity to Hillside, the bigger of the two aluminium smelters at BHP Billiton. Hillside uses 1 200 MW, which makes it the third-biggest electricity user in the country. This usage is surpassed only by the cities of Cape Town and Durban, which each uses 1 300 MW https://www.fin24.com/Companies/Industrial/Eskoms-Billiton-losses-already-R107bn-20130404accessed on 2 February 2019

[v]https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=20460148accessed on 2 February 2019

[vi]In the same period, BHP Billiton Hillside paid about 22.65c per kilowatt hour (kWh) for two-thirds of the 1 200 megawatts it uses, as opposed to R1.40/kWh charged to normal consumers.

South Africa

Citizens Can Still Register to Vote

Cabinet has called on all eligible voters who have not registered to vote in the upcoming elections to do so at the… Read more »

See What Everyone is Watching

Copyright © 2019 Fahamu. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.