OPINION: SA to slow on renewable energy economic bonanza
If you think I am being dramatic, then you have not been listening
By Wido Schnabel
In 1992, the phrase, “It’s the economy, stupid” was painted by James Carville, Bill Clinton’s political strategist, on the walls of the presidential campaign office.
With South Africa facing the most challenging economic climate for generations, we need now more than ever to come together and plaster that slogan everywhere to remind every single individual what is at stake if we fail to act.
If you think I am being dramatic, then you have not been listening or looking around you, because right now we as individuals, citizens and elected representatives risk missing out on a route to economic upliftment for all citizens.
The time for self reflection, slow and steady, incremental changes and initiatives is over.
We have gone too slow for too long.
We have wasted valuable time not addressing one of the building blocks of our economy and our individual prosperity, looking for piecemeal solutions, patching a system that is not fit for purpose and hampering our businesses and lifestyles with the constant strain of load-shedding.
Enough is enough.
Today, South Africa is facing a crisis on three fronts. We face an energy crisis, an economic crisis and an unemployment crisis.
One of these alone would be a hurdle for the government to overcome, but together they present us with unprecedented challenges that will require concerted effort, innovative thinking and speed.
And the answer, my friends, is literally staring us in the face.
We have everything we need to not only work our way out of the recession that is coming, but to actually improve the situation for every individual and elevate our standing internationally as well.
As a priority we must increase energy capacity and diversify our energy forms. We urgently need to move away from our dependence on finite fossil fuels. That is not a question, but how we do so and how we alleviate the impact of the decommissioning of coal mines is up for discussion.
The question on everyone's lips is where the jobs come from to replace the value chain created by the coal sector. We must ensure that the transition is just and that no one gets left behind, and in this renewable energy represents not only a sustainable source, it also creates jobs right across the value chain.
Take for example Solar PV. With some 11GW of coal to be decommissioned by 2030, renewable energy can step into the breach. Not only will the 16GW wind, 6GW solar PV utility and 6GW distributed generation more than compensate for the loss of coal, but will also create the much-needed increase in capacity we need to enable a functioning economy.
More importantly, the jobs created by these energy sources are plentiful. Sapvia has commissioned a jobs study which we anticipate will report that utility scale solar PV projects can generate between seven to 14 jobs per MW capacity, commercial projects between 10-12 jobs, while residential projects could create up to 14 jobs per MW.
These numbers are not to be sniffed at and we could use the current energy crisis as the impetus we need to make a step change and address the fundamental flaws in our infrastructure and economy.
Not least because, as we seek foreign investment to support our under-performing economy our downgraded status, and the lack of functioning infrastructure in place, means that any promises of investment will surely come to nothing.
Why would any investor set up when they cannot rely on a stable electrical supply to enable their business to function? And for us here in South Africa, we are continually hampered by load-shedding that leaves us unable to operate and sustain our own businesses.
And as the economy shrinks our unemployment levels soar. The young are especially affected by joblessness with almost 50 percent unemployment, but across the board we see too many people out of work and unable to lift themselves out of poverty and improve their circumstances.
As a result of the Covid-19 pandemic, unemployment levels will more than likely double, plunging us into an even deeper crisis.
So where do we go from here?
While it might sound like I am the harbinger of doom, I am not. I firmly believe that South Africa is on the cusp of seizing an unprecedented opportunity. We are sitting on the proverbial pot of gold at the end of the rainbow. A pot filled with natural, mineral and human resources.
I often say there is enough sun in Africa for us all, and when you add in our abundant wind, you can see that when it comes to natural resources our cup over-floweth. Harnessing these natural resources must be a priority if we are to emerge from the crisis.
But that’s not all we have right under our feet. Here in South Africa we have access to the very mineral resources required to create and store the energy created from renewable sources. Platinum and vanadium are the fundamentals required for battery energy storage systems and we have them in abundance.
Even better, we can actually become not just energy independent but also an energy exporter, able to sell and improve our economic prosperity by shipping green energy abroad.
All of this would mean nothing if we didn’t have the people to set up the organisations to deliver the required renewable projects and maximise on the abundant resources we have available.
South Africa’s diverse population is filled with entrepreneurial, resourceful and multi-skilled individuals who are ready and waiting for the opportunity to drive forward our economy and put money into their own pockets and their families’.
So what’s holding us back?
We have a plan. The Integrated Resource Plan has been out since October. But we’ve been on go-slow for too long.
Players in the renewables industry stand ready to sprint ahead, but are being held back by policy decisions and inertia that must be overcome if we are to emerge from this crisis with fewer people materially affected.
Some might ask where will the money for all this investment in infrastructure come from. We have so many options available to us. Local investors are chomping at the bit to play their part in driving the South African economy forward.
Unfortunately, South Africa is also one of the world’s worst carbon dioxid polluters; fortunately this means that there are global investment programmes that we can avail of to finance our transition away from a carbon reliant economy.
So again you might ask, what is holding us back?
Why are we missing this opportunity?
Because to me it is a complete no-brainer for us to put the foot down and turn ideas into action.
Energy, energy, energy needs to be the focus.
Without a robust energy infrastructure all will fail, from both a micro and macro perspective. We can only build the foundations of a prosperous economy if the building blocks are energy.
The Sapvia jobs study has shown that the transition to a low carbon economy could create at a minimum seven jobs per MW capacity.
This is a conservative estimate and renewables has the potential to transform the jobs landscape with employment opportunities across the board, invigorating rural communities and offering access to new skills in localities where opportunity has been scarce.
We can and will address the re-skilling and up-skilling of individuals who are affected by the move away from coal and we can and will create an environment of proactive training and skills sharing that will ensure that every individual who wishes to participate in the new economy can do so.
Moving forward will require concerted effort from thegovernment, industry and individuals. We need to all focus on the prize ahead, which will benefit every single individual across South Africa.
At its heart this will be a just transition, where no one is left behind.
But it requires us to act now.
We cannot wait any longer.
Wido Schnabel is the chairperson of Sapvia.