COSATU Submission: Integrated Resource Plan

Portfolio Committee: Energy

24 October 2018

Introduction

Interests of COSATU and workers in Eskom:– Eskom employees and their families.

– Consumers.

– Impact on economy and jobs.

– Debt threat to state and bail outs.

36% unemployment, 1% jobless growth & rising levels of retrenchments.

Economic recession & state capture.

Consultation

Welcome MPs’ interest & intervention.

Repeated delays in government consultation with workers on IRP and IEP at Nedlac.

6 Ministers and DOE instability.

New Minister’s efforts to engage Nedlac.

Separate processes from IEP.

IRP: Structural Problems

Major omissions from IRP.

Lack of bold proposals to put Eskom on sound economic model to ensure its survival.

IRP admission that 2030 model needs further studies.

Outdated Rand Dollar exchange rates.

IRP: Silence on Governance Crises

State capture with Eskom as epicentre.

Billions lost to looting.

Plans to recover stolen money?

No comprehensive forensic audit.

R400 billion debt.

Plans to increase debt to R600 billion.

Nuclear and Russia?

IRP: Silence on Governance Crises

Impact of decade long massive tariff hikes on consumers and economy.

Medupi and Kusile massive budget run overs.

Calls of Eskom Chair and Finance Minister to retrench 17,000 – 30,000 workers.

– Presidential Jobs Summit commitment to no state retrenchments.

COSATU Proposals

A comprehensive forensic audit is needed of all of Eskom’s expenditure.

– Those implicated must be charged, arrested, tried, convicted and sentenced and their assets frozen and confiscated.

The IRP must be revised to include a serious business model that will stabilise and save Eskom.

COSATU Proposals

Eskom must be instructed by government that it cannot increase its debt levels from R400 to R600 billion.

Eskom must be instructed by government that there will be no retrenchments. If there is a need to reduce the head count, then management vacancies can be frozen.

Economic Opportunities

Lack of business model that will save Eskom from its current downward trajectory.

How will Eskom afford to pay for Independent Power Producers at their current set prices that are far from affordable for Eskom and in fact are bleeding it dry?

Economic Opportunities

Investment in battery storage for renewable energy base load storage.

– Potential partnership with Tesla.

Impact of imported renewal energy technology on local industries.

Revive historical exports to neighbouring states.

Potential to drive Africa’s industrialisation.

Economic Opportunities

Electric vehicles:

– International trends.

– Local auto-manufacturing sector.

– Domestic, continental and international markets.

Biofuel, cogeneration & methane gas.

– Positive boost to sugar and other agricultural sectors.

Economic Opportunities

Reindustrialisation and lower/ stable tariffs.

Municipal arrears

– Soweto

Worker and community ownership?

COSATU Proposals

Sustainable business model linked to IPAP & based upon increasing electricity production, boosting exports to SADC & Africa & preparing for onset of electric vehicles.

Include integration of biofuel, cogeneration and methane gas, especially for the agricultural sector.

COSATU Proposals

Commitment not to retrench workers but in fact to increase energy jobs by expanding energy production and exports.

Renegotiation of IPP contracts to reduce the price at which Eskom must buy & sell electricity.

Amend Eskom’s mandate to allow it own & produce renewable energy.

COSATU Proposals

Require all renewable technology be manufactured locally.

Invest in battery storage capacity for both residential and commercial consumption.

Revised financial model that will allow Eskom to pay off its debts and keep tariff hikes in line with inflation.

COSATU Proposals

Plan to ensure all municipalities & communities, including Soweto, pay for what they consume.

Distribution of locally produced solar panels to indigent homes, emerging farmers and SMMEs.

Plan to establish community & worker owned energy production through cooperatives and the PIC.

Just Transition

Realities of climate change:

– Mpumalanga and Limpopo pollution.

– Water crises.

– UN Report on urgency of next decade.

– Impact upon workers’ health.

– Responsibility of mine owners and Eskom.

Just Transition

Jobs and transition plans:

– Coal mine and energy workers.

– Economically dependent towns and provinces.

Mpumalanga vs. Northern Cape.

– Reskill and absorption of workers.

UIF, DOL, SETA and PIC funding.

Just Transition

Need for massive investments in green job opportunities:

– Land rehabilitation and reforestation.

– Water conservation and recycling.

– Consumer and industrial recycling.

– More energy sustainable methods of construction and industrial production.

– Green friendly buildings and homes.

– Electric vehicles and public transport.

Conclusion

COSATU rejection of IRP.

Need for overhaul of IRP with parliamentary oversight.

Overhauled IRP needs to:

– Halt looting & recover stolen money.

– Clear sustainable business model.

– Reduction of Eskom debt levels.

– Just transition to protect jobs and environment.