Envisioning a Socially-Owned Renewable Energy Sector
– A NUMSA Working Perspective –
NUMSA Deputy-General Secretary
Since our call made in August 2011 for a socially-owned renewable energy (RE) sector, questions have been raised about what NUMSA means about “socially-owned renewable energy sector”. We have also been asked for motivations for this call. With us convening this conference under the theme: Building a Socially-Owned Renewable Energy Sector in South Africa; questions about what we mean about “a socially-owned renewable energy sector” have become more louder.
In this short presentation we hope to answer these questions. The presentation is divided into the following sections:
1. Sketching out our vision of a socially-owned renewable energy sector
2. Briefly stating our reasons for the call for a socially-owned renewable energy sector
3. An outline of what we consider as potential building blocks for the construction of a socially-owned renewable energy sector in South Africa
4. Identification of potential obstacles to the realisation of our objective to build socially-owned renewable energy sector in the country
5. Listing of concrete steps that we need to take to realise our objectives.
Before we outline our vision of a socially-owned RE sector, let me say that although we have been working on a definition of a socially-owned RE since August 2011 what we are about to describe are tentative ideas, a working perspective. We are humble enough to say that we see this conference as contributing to our efforts to refine our understanding of what we mean by a “socially-owned RE sector”.
The Research and Development Groups (RDGs) which are NUMSA worker-based research groups are meant to take this work forward after the conference. The plan is – in the near future – for the union’s constitutional structures to finally adopt what will become NUMSA’s position and perspective. So any suggestions and advices are most welcome!
What do we mean when we talk of a “socially-owned renewable energy (RE) sector”?
1. When in NUMSA we speak about a socially-owned RE sector, we are referring to a mix of different forms of collective ownership that we want to see in the sector. The mix includes energy parastatals, cooperatives, municipal-owned entities and other forms of community energy enterprises.
2. While in our view these socially-owned entities will involve some level of decentralisation in terms of ownership and operation, they must relate to each other and be integrated in a way that builds a national sector as a coherent whole. We are aware of the limitations of the transformative potential of “stand alone” entities.
3. For socially-owned RE entities to prevail in the sector, they must have prioritised access to the grid. The grid itself, as the backbone of the sector, needs to be publicly-owned.
4. The mandate of socially-owned RE enterprises should be service provision, meeting of universal needs, de-commodification of energy and an equitable dividend to communities and workers directly involved in production and consumption of energy. From our perspective socially-owned RE enterprises should be NON-PROFIT entities.
Clearly, socially-owned RE entities cannot be modelled on current corporatised state-owned enterprises (SoEs) in the energy sector such as Eskom. While existing state-owned energy enterprises can be important building blocks – among others – for a socially-owned RE sector; it is NUMSA’s considered view that for existing state-owned energy enterprises to contribute to a construction of a socially-owned RE sector they need to be re-socialised in the following manner:
1. Change their mandates from the current profit orientation to that surpluses generated are for service provision.
2. Change the existing forms of accountability. Instead of boards of directors appointed by Ministers and other politicians, our discussion points to the need for significant representation of energy consumers and energy producers on new and legislatively-empowered governing councils of these SoEs.
So our definition of a socially-owned RE sector is not just about OWNERSHIP. Our definition has FIVE elements;
o ownership yes, but also
o democratic control through constituency-based governing councils;
o a strict social mandate;
o prioritisation in the grid of electricity generated by socially-owned RE entities; and
o accrual of a large share of economic benefits of renewable energy production and consumption to producers and owners of the actual means of renewable energy production.
As NUMSA, we are still discussing which branches of the sector are most necessary to bring under social ownership and control. We are also asking ourselves strategic questions such as: what sectors are we best positioned to bring under such control? Related to these two questions is the issue of how to approach private investors in the RE sector. It’s the question of what we think is necessary but equally the issue of strategy: what is possible in the short, medium and long term?
To begin answering these questions we used a commodity chain analysis where we broke the RE sector into the following sub-sectors:
• sources (eg: solar, wind, tidal and geo-thermal)
• research, innovation and training
• technology production and manufacture
• construction and installation
• utilities (generation, transmission and distribution)
• servicing, maintenance and refurbishing.
• consumption of energy generated
The pace and the ability of bringing these sub-sectors under social ownership will differ from sub-sector to sub-sector and on each technology. It may be more difficult (from a balance of class forces, financial and technological perspective) to, in the short-term, bring under social ownership an already existing privately-owned turbine-manufacturing company than to start a new cooperative that installs and maintains solar water heaters (SWHs) that municipalities are rolling out.
The work to determine which branches of the sector we bring now or later under social ownership is outstanding. We hope that this conference and post conference collaborations will contribute to these discussions. But for us there appears to be some non-negotiables. These are:
1. Bringing sites with the greatest abundance of useable renewable energy sources such as land under public, community or collective ownership.
2. Fight for social ownership of utilities (generation, transmission and distribution)
3. Bringing the fossil fuel industry under social ownership and control. To manage a transition to low carbon economy requires interventions on both sides of the energy line – on the renewable energy side and on the fossil fuel side.
Bringing the fossil fuel industry under social ownership means that we have to seriously discuss with the National Union of Mineworkers (NUM) the question of nationalising coal mines. It also raises the standing resolution of COSATU, NUMSA and the South African Communist Party (SACP) to renationalise SASOL; a company that produces synthetic fuel from coal. A fossil fuel under social ownership will allow for a planned transition to a low carbon economy.
4. Although we are still discussing the role of the private sector, we are of the view that to ensure that we build a manufacturing base in South Africa, a strategic and targeted local content requirement regime should be implemented. This local content requirement regime should look at manufacturing capabilities that exist now, potential to build these capabilities and necessary to convert existing manufacturing infrastructure into capability to produce RE technologies.
Reasons for the call for a socially-owned RE sector:
a) Renewable energy has a great potential to give communities greater control of their resources and satisfying their energy needs on a decentralized basis, where fossil fuels are currently failing. Renewable energy is essential to mitigate climate change.
b) However, the renewable energy sector is not developing as fast as it needs to and a socially-owned and controlled sector can push its development far faster than it is currently expanding.
c) Because of the fact that energy is vital for production and meeting basic needs, energy supply that is determined by the dictates of the market is vulnerable. Social-ownership of renewable energy can guarantee greater security of supply and equality of access.
d) However, as the NUMSA President pointed out in his opening address, although renewable energy is necessary, there is nonetheless, nothing inherently progressive about renewables. They can be as exploitative as any other sector, as we have heard from various comrades in this conference.
e) Energy is central to national development, and a socially-owned renewable energy is a way to resist that the country’s energy is determined by foreign multinational corporations. Socially-owned renewables can provide a strong basis for energy sovereignty, as an important way of confronting, and in the long term overcoming, energy inequalities in the world-market.
Potential building blocks for construction a “socially-owned renewable energy sector”:
a) There is natural abundance of Renewable Energy Sources. South Africa has one of the best solar energy resources in the world. It also has good wind resources.
b) We have an industrial base with certain skills, capabilities and infrastructure.
c) We have a strong basis to collectively and democratically plan an industrial conversion process away from the mineral energy complex.
d) We have organizational strength in key industrial sectors and a strong tradition of anti-capitalist political consciousness and struggle. Importantly, this includes an already existing strong discussion on ownership questions of the country’s key productive assets.
e) We still have public energy entities, even if they have been corporatized and have problems. These include: ESKOM, Central Energy Fund and subsidiaries.
Likely obstacles to the realisation of our objectives:
a) The biggest obstacle is the structure of our economy and its dependence on fossil fuels (coal and oil). The abundance of fossil fuel mainly coal in our country, is a strong weapon the hands of the fossil fuel lobby. This is made more difficult by the fact that two different unions organise on the different sides of the energy line; with us organising in companies that produce and service RE technologies and National Union of Mineworkers having its base among workers who work in coal mines. It is our firm belief that no significant transition can happen without winning over and dealing with the fears of workers in the fossil fuel industry.
b) The private sector has been the first to move, and is currently much better prepared than the working class and communities to carry out the expansion of the renewable energy sector. This includes the fact that they have better access to capital, and technology, R & D and innovation. This is all protected by Intellectual Property Right’s regimes.
c) The public Research & Development and innovation capacity that does exist is weak and underdeveloped.
d) The regulatory framework which is being developed is being almost exclusively shaped by the private sector.
e) Foreign imports may make it hard to develop a South African manufacturing base in the sector. There is a risk of being consumers of technology, not innovators.
f) The fear amongst workers of job losses in the existing energy sector as the country moves towards renewables. There is a concern that these people will not be adequately re-skilled. There is widespread scepticism about the reliability of RE to run the economy.
g) The ownership structures of land in South Africa may hinder the development of a socially-owned RE sector, as they heavily favour private ownership. Linked to this is the fact that private RE developers may get access to the land where key strategic renewable energy sources exist before communities and workers are able to benefit from these resources.
h) There may be conflicts of land-use as some communities may resist the use of their land for renewable energy use, unless there is a strong awareness raising campaign.
We hope that this has given you some ideas of the current state of our thinking about social-ownership of renewable energy. There is still a lot of work to be done. Because of some presentations that are still to come, I have not touched on the following issues which we need to consider:
• Financing of a socially-owned RE sector
• The question of innovation and technological capabilities
• Policy instruments that will be necessary for building a socially-owned RE sector. Crucial in this is the question of whether the system of bids that has been adopted by the South African government is it not favouring private capital. This opens up the debate that is a subject of this afternoon; that of the Renewable Energy Feed In Tariff (REFIT) versus the REBID.
• The role of the National Energy Regulator of South Africa (NERSA) which for us has become nothing else but a space for career advancement for officials from Eskom and Department of Energy.
Much more work lies ahead of us and we therefore view this conference as an initial intervention. As part of this, in the last day of this conference we will talk concretely about what immediate steps should be taken in South Africa to realize this vision. We are certain that the following further interventions are necessary if we are to concretise our vision and mission of establishing a Socially Owned Renewable Sector in South Africa.
1. As we indicated earlier the Numsa Research and Development Groups (RDGs) and our soon to be launched Numsa Economic Institute shall be catalysts in the work to realise Numsa’s strategic objective related to the establishment of a Socially Owned Renewable Sector in South Africa.
2. We commit to work with our sister Unions in COSATU more specifically National Union of Mineworkers (NUM) and Chemical Energy Petroleum Paper Wood and Allied Workers Union (CEPPWAWU) to take forward our vision building a Socially Owned Renewable Sector in South Africa.
3. We shall use our Numsa Parliamentary Office in the National Assembly and our representatives in NEDLAC to advance the Numsa policy perspectives and strategic objective of building a Socially Owned Renewable Sector in South Africa.
4. Going forward we shall work very closely with the ANC Parliamentary Study Group on Energy. The invitation to Comrade Sisa Njikelana who Chairs the ANC Parliamentary Study Group on Energy to participate in the Numsa International Conference to establish a Socially Owned Renewable Sector in South Africa is testimony to our intentions to take this project to higher levels.
5. We shall as a national leadership of NUMSA use our proximity to the Presidency, Department of Trade and Industry and other relevant ministries to further advance our call for the establishment of a Socially Owned Renewable Sector in South Africa.
We believe it is very important that this conference contributes to the development of NUMSA’s work, and is not just an academic exercise. We also hope that the conference will lead to concrete collaborations with different participants in order to advance this ongoing work.
As a class orientated trade union, NUMSA and its leadership is absolutely clear that nothing will come in a platter or like manna from heaven. We shall have to mobilise our members and the working class in particular to struggle side by side for the realisation of the establishment and building of a Socially Owned Renewable Sector in South Africa.
SOCIALISM IS THE FUTURE – BUILD IT NOW!
I THANK YOU