GREENPEACE PRESENTATION TO NERSA PUBLIC HEARING INTO ESKOM TARIFF

INCREASE 21st January 2010

Nkopane Maphiri, Greenpeace Africa

Jay Rutovitz, Institute for Sustainable Futures, University of Technology, Sydney

Broad areas to be covered

Brief introduction to Greenpeace Africa

International and national context

Energy [R]evolution

Job creation from the Energy [R]evolution (preliminary results)

Policy imperatives

Greenpeace exists because this fragile earth deserves a voice. It needs solutions. It needs change. It needs action.

Mission Statement

Greenpeace is an independent, global campaigning organisation that acts to change attitudes and

behaviour, to protect and conserve the environment

and to promote peace.

Core Values Independence

Non violence

Taking direct action

The power of acting together within South Africa

International and national context 

The reality of climate change continues to outstrip scientific

projections.

An increase in global temperature of more than 2ºC

will cause catastrophic, irreversible climate change.

Climate change is already causing 300 000 deaths a year

according to a report from Kofi Annan’s Global

Humanitarian Forum.

International and national context 

International negotiations are ongoing (most recently in

Copenhagen) to come up with a global agreement to tackle

climate change and reduce CO2 emissions post-Kyoto

Protocol.

South African energy policy operates within this context,

and the South African government has made an

international commitment to reach a 42% reduction in

projected emissions by 2025.

Therefore Eskom build plans must take account of the

fact that there is a world-wide push to reduce emissions.

Energy [R]evolution

South Africa is among the 15 countries with the highest CO2 emissions in the world. Greenpeace and the European Renewable Energy Council (EREC) have published the Energy [R]evolution, a low carbon energy scenario which would allow SA to:

Save money,

Create jobs, and

Maintain sustainable economic development without fuelling catastrophic climate change.

The Reference scenario is “Business as Usual”, and is the International Energy Agency 2007 projection.

Energy [R]evolution - electricity generation

Energy [R]evolution – renewable electricity

• Renewable energy could provide up to 75% of SA’s electricity by 2050.

• Investing in renewable technologies and energy efficiency would reduce CO2 emissions in 2050 by 328 million tons per year.

Energy [R]evolution

Renewable energy is mature, ready and can be deployed on a large scale within 2 years or less. Proactive investment in renewable power and energy efficiency would mean:

A more diverse energy mix would decrease SA’s

dependency on a single energy source (coal), thereby

increasing energy security.

Energy efficiency is absolutely critical - it offers the simplest, easiest and most cost effective way to reduce greenhouse gas emissions and costs.

Energy [R]evolution

Coal and nuclear power need to be phased out.

Emissions from coal pose a real and present threat to people and the environment.

There is no role for nuclear power in the Energy [R]evolution because of the numerous safety threats,

and the fact that there is no solution to waste disposal. Nuclear energy is also very cost intensive.

Carbon capture and storage is unproven, and will deliver too little too late.

Energy [R]evolution Jobs

Given the importance of securing energy jobs, and encouraging a just transition to green jobs, Greenpeace Africa commissioned the Energy [R]evolution jobs study which illustrates the benefits of moving towards clean energy and securing South Africa’s future as a champion for change.

Energy [R]evolution Jobs

The Institute for Sustainable Futures (ISF), University of Technology Sydney, analysed the employment effects of the SA Energy [R]evolution for Greenpeace Africa.

Electricity sector jobs only.

Direct jobs only (does not include jobs in accommodation, catering, or from spending wages).

We included one scenario with enhanced renewable manufacturing and export to rest of Africa.

ISF also did analysis for global Energy [R]evolution.

Preliminary results

Energy [R]evolution jobs - methodology

Employment factors (jobs per MW)

UNCERTAINTY SA factors where possible, otherwise OECD

factors + multiplier. Adjustment for cost decline. Energy efficiency job factor (only for the

reduction in electricity consumption)- Includes a proportion of energy efficiency

achieved by solar water heating

Employment factors – key inputs

Construction jobs per MW capacity increase O&M jobs per MW installed Fuel jobs per GWh

- For coal this means coal mining jobs per GWh

Local SA factors for – Coal mining– Coal construction– Coal, nuclear and hydro generation O&M– Solar water heating

Employment factor - adjustment from OECD

Labour intensity tends to be higher in countries with lower GDP per capita.

One method: multiply OECD factors by the ratio of labour productivity* in SA to labour productivity in the OECD. This would mean multiplying by 4.6.

We used the weighted average of the ratio between local factors and OECD employment factors, which is 1.8.

Conservative approach.

* GDP per person employed

Electricity sector jobs to 2030 (including coal exports)

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Efficiency

Efficiency - SWH

Ocean

Solar thermal

Geothermal

PV

Wind

Hydro

Biomass

Nuclear

Oil & diesel

Gas

Coal

Coal exports0

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Efficiency

Efficiency - SWH

Ocean

Solar thermal

Geothermal

PV

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Hydro

Biomass

Nuclear

Oil & diesel

Gas

Coal

Coal exports

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Reference [R]evolution

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Efficiency

Efficiency - SWH

Ocean

Solar thermal

Geothermal

PV

Wind

Hydro

Biomass

Nuclear

Oil & diesel

Gas

Coal

Coal exports

The potential for enhanced manufacturing

Additional 26,300 jobs Additional 22,000 jobs

in renewable export 147,400 in total, 45%

more than in the Reference scenario

Reference [R]evolution [R]evolutionenhanced

manufacturing

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Efficiency

Coal exports

Fuel

O&M

Export

CMI

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Efficiency

Export

Coal exports

Fuel

O&M

CMI

The Energy [R]evolution scenario creates 64,000 new jobs in renewable energy between 2010 and 2030.

In electricity supply, the [R]evolution scenario creates 46,000 new jobs by 2030, compared to 29,000 in the Reference scenario.

There are 123,000 energy sector jobs by 2030 in the [R]evolution scenario, 20% more than the Reference scenario.

Energy [R]evolution jobs - results

Policy Imperatives

In principle, Greenpeace Africa is not opposed to energy price increases, provided there are provisions to protect low income consumers.

However, Greenpeace Africa does oppose the tariff increase application made by Eskom as it stands. Instead, the proposed tariff increase MUST encapsulate the following principles:

Policy Imperatives

1. The need to prepare SA for a low carbon future and quit our dependency on coal.

2. Eskom should ring-fence at least 50% of the proposed tariff increase for investments into renewable energy and energy efficiency.

3. Under no circumstances should the tariff increase go towards funding nuclear energy or more coal power after Medupi and Kusile.

4. There should be a pause between Medupi and Kusile to develop and build substantial renewable capacity.

Policy Imperatives

5. Energy efficiency is the most cost effective way of meeting energy needs, and Eskom should be required to demonstrate there is no demand management or energy efficiency alternative before developing any further non-renewable capacity.

6. There should be a national program of providing energy efficiency packages, which should be free to low income consumers, and include efficient appliances, solar water heating, and insulation.

Policy Imperatives

7. Eskom should introduce a universal stepped tariff for residential customers. The Free Basic Electricity should be provided as the first block, followed by charges designed to recoup costs. The FBE should be increased to 100 kWh per month.

8. The cost of providing FBE, the energy efficiency packages and renewable energy feed in tariff should be spread across all electricity consumers.

9. NERSA’s mandate should be extended to regulate the municipal tariffs.

Conclusion

There is no doubt that South Africa’s energy costs are amongst the cheapest in the world, and there is a justifiable reason for predictable tariff hikes.

The energy price increase together with new policies and incentives should enable Eskom and the private sector to invest in renewable energy, stimulate the local renewable manufacturing industry, create 64,000 green jobs by 2030 and place South Africa in the enviable position of having the foresight to switch over to renewables and become a leading exporter into the new African market for renewables.

This fragile earth deserves a voice. It needs solutions. It needs change. It needs action.

Thank You.

www.greenpeaceafrica.org