Chapter 5: Regimes and values in the Global South
5.2. Results
5.2.6. Justice and scalar implications of urban transitions
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117 Local government cannot continue to rely on national electricity planning. We need greater energy autonomy (Interview 23. 26 August 2012).
Third, the contestation is based on divergent values. Proponents for retaining centralised networks tended to underpin their argument within a developmental lens. They argue that national grids are instruments for sharing costs and benefits across national boundaries and that these principles are entrenched in legal instruments such as the Electricity Regulation Act, 2006. This position more or less aligns with the aim of preventing ‘patchy’ (Coenen and Truffer, 2012) distribution of development and using the grid for redistribution.
Four, the tensions are underpinned by opposing views on climate change responsibilities. On the one hand, actors that advocate for energy autonomy argue that wealthier cities have a moral responsibility to mitigate climate change. In contrast, national government and the Electricity Department argue for differentiated responsibility for climate mitigation vis-à-vis Global North- South. This was captured by the Head of Pricing and Regulation:
Climate change is not caused by African cities. South Africa has proven itself a leader in mitigation. Why should a South African city go further at the expense of the poor? There is very little political will in Cape Town to charge customers more for green electricity, particularly when energy poverty is a major challenge (Interview 16. 16 September 2013).
These opposing views were visible in a multi-stakeholder Workshop on Low Carbon City Centre Strategy where a proponent for energy autonomy argued that the City has a responsibility to facilitate widespread localised renewable electricity (Meeting 68. Cape Town Partnership. 23 April 2013). In response, the Head of Green Energy raised the following argument against energy decentralisation and autonomy:
If local governments go at it alone on large scale renewable and ‘cleaner’ energy, it means reduced resources and funding for national energy planning and hence energy services to the poor. National is the best scale for decarbonising supply (Interview 11. 04 December 2012).
Five, these tensions are based on different metrics and assessments of costs and implications for the poor. The Electricity Department and national government argue that large-scale renewable electricity would cost more than electricity from the national blended grid (CCT, 2011h). Thus, if the City were to enter into a PPA the associated increase in bulk electricity costs would be passed on to customers through tariff increases. As argued by the Head: Green Energy, this would disproportionately affect the poor:
Increased tariffs stemming from green electricity will effect the poor the most which is politically indefensible in Cape Town... Local governments cannot charge people more for green electricity (Interview 11. 04 December 2012).
118 The basis for the above statement is that the poor are disproportionately affected by tariff increases arising from renewable energy, as a larger proportion of total income is spent on electricity (CCT, 2011j). Conversely, proponents for energy autonomy argue that the costs of large-scale renewable energy will become cost competitive with the national grid price in the medium term. A report drafted by the Energy and Climate Change Unit argues:
Given cost projections it appears that there might be considerable scope for CCT, or CCT electricity customers to benefit from electricity generated at costs lower than the national grid price (CCT, 2011i: 3).
Further, they highlight that the economic benefits, including localised jobs and security of supply should be considered in an assessment of cost (CCT, 2012f).
Finally, an argument raised by proponents of centralised networks relates to cross-subsidies between wealthy metros and poorer municipalities. In brief, municipalities in South Africa contribute varying amounts to Eskom revenue from bulk purchases. Poorer municipalities receive a discounted rate on bulk electricity (SEA, 2015) and large metros consume far more electricity.
Thus, wealthier metros contribute considerably to national supply, transmission and distribution and thus cross-subsidise poorer regions63. Hence, urban energy autonomy in wealthier cities impacts on this intra-city cross-subsidisation. This argument has been raised by both Eskom and NERSA (Eskom, 2012; CCT, 2011g; CCT, 2011h), summarised by the Eskom’s Chief Engineer:
Network Planning:
Eskom needs to continue getting bulk sales and revenue from Cape Town. It is the responsibility of wealthier metros to play their part in supporting smaller municipalities and rural electrification. One of the reasons for renewable electricity being supplied on the national level is because the cost of renewables is more. With national grids, the cost of electricity is spread and cross-subsidies are not as threatened (Eskom, 2010).
This situation is compounded by recent trends related to electricity reconfigurations in large South African metros. An analysis of data provided by the Sustainable Energy Africa indicates that revenue is declining across South African metros. Figure 5.14 highlights that net deficits in electricity sales surplus are inevitable for metros in the coming years. The ‘State of Energy in South African Cities’
highlights that large South African metros64 have already reported large decreases in electricity sales whereas secondary cities are reporting net deficits (SEA, 2015). This means that rather than electricity sales subsidising general municipal services, electricity services would have to be subsidised from other revenue sources. Thus, intra-city cross-subsidisation is already being reduced
63 Through, inter alia, financing electrification and energy service provision
64 Including the City of Johannesburg
119 by socio-technical reconfigurations. These trends are thus caused by and will be further exacerbated by urban energy transitions.
Figure 5.14: Electricity surplus for categories of South African municipalities
Source: Raw data sourced from local government MTREF budgets (2006-2014)
The case of large-scale renewable electricity provides a strong example of tensions between urban transitions and autonomy and national development aspirations. These structural tensions, that cut across levels of government, are manifested by conflicting visions, values and understandings amongst social groupings. This highlights the complex relationships between scale, contestation and justice in relation to reconfigurations of urban infrastructure networks that are (inter)- connected with national grids. Notably, it brings to the fore opposing securities of urban ecological security the one hand, and national developmental transitions on the other. In brief, it illustrates that wealthy munipclaities ‘going it alone’ in urban transitions may conflict with national development ambitions or transitions.