Energy Transition Threatens 120,000 South African Coal Jobs


As many as 120,000 jobs at South African coal mines and aging power plants that use the fuel are under threat from a drive to switch to electricity production methods that have less impact on the climate, a research consultancy said.

The transition could threaten economic activity in four municipalities with a population of more than 2.3 million people, said Muhammed Patel, an economist at Trade & Industrial Policy Strategies, known as TIPS, on a webinar on Tuesday. In the Emalahleni municipal area coal-related activities make up 44% of the economy. Most of the country’s coal is mined in the municipal areas, which lie in the eastern province of Mpumalanga.

“Because these municipalities are so highly reliant on the coal value chain activities this is going to leave a huge gap,” Patel said. “This is a key concern for South Africa given our high levels of unemployment, inequality and poverty.”

South Africa produces almost all of its electricity from a suite of coal-fired power plants run by Eskom Holdings SOC Ltd. in the eastern province of Mpumalanga. Many of the plants have been running for decades and there is a push to retire them and switch to alternatives such as solar energy as South Africa emits the same amount of climate-warning greenhouse gases as the U.K., which has an economy eight times the size.

Coal mines and power stations are more labor intensive than renewable energy plants, said Pulane Mafoea-Nkalai, a senior research specialist at the Sam Tambani Research Institute, which is affiliated to the National Union of Mineworkers, on the webinar. Mpumalanga will also face competition from other provinces for the siting of solar power plants. The Northern Cape has a more arid climate and clearer skies.

“Moving to a low-carbon economy will change the structure of the economy and impact on the working class,” said Mafoea-Nkalai. “NUM, as a union organizing in both the coal and energy sector, recognizes that their members and their communities will be affected.”

Diversified Economy

The eventual closure of coal-fired power plants is not due to renewable energy but to climate change and alternative employment, ranging from rehabilitating idled mines to adding value to coal waste, according to TIPS.

“It is not a shift to renewable energy which will lead to job losses but a failure to deal with the potential impacts of climate change on the economy,” said Gaylor Montmasson-Clair, senior economist at TIPS. “A move to renewable energy forms part of a number of mechanisms to mitigate the impacts of climate change on the coal value chain.”

South Africa has a small, but growing, solar and wind power generation industry. Many of those plants are in the western half of the country.

Eskom says its planning to create alternative employment by repurposing power stations through its Just Energy Transition program.

“The whole Just Energy Transition is Eskom’s plan to ensure the communities that have hosted Eskom over the past 100 years are not simply left behind when these older stations are retired and decommissioned,” the company said by text message. “Eskom is making sure that these communities are offered economic opportunities through investments and job opportunities in the re-purposing of the stations for renewable energy sources.”

©2020 Bloomberg L.P.

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