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November 28, 2011

Durban's Dirty Energy Week

Dirty Energy Week
Watch footage from Dirty Energy Week here

As world governments gather for another round of climate change negotiations, they continue to fan the flames of climate change with astronomical subsidies to fossil fuels, undercutting clean energy's rapid march to grid parity and widespread adoption.

In the literal shadow of the world's largest coal export terminal, Richards Bay, and figurative shadow of public financing of two of the world's largest coal plants – Medupi and Kusile, over 100 campaigners from across the African continent, and the world, came together to support a growing movement of grassroots resistance to dirty energy.

The similarities between South Africa's electricity crisis, and India's are striking. South Africa is heavily dependent on coal, which accounts for the vast majority of electricity supply. Like India, a significant portion of the population, roughly 25%, lacks electricity access. As India continues to struggle with its own coal crisis, the lessons from South Africa's dirty energy week are timely.

Fossil Fuel's Welfare Problem

Governments continue to undermine international climate negotiations by doling out billions every year to dirty energy. The gargantuan price tag - $409 billion - dwarfs the $67 billion clean energy receives (PDF). These dirty energy subsidies are so large they are actually twice the size of the entire clean energy market.

Worse, only 8% go to support the poor. The truth is this money is lavished on an obscenely profitable, extremely expensive, value-destroying industry that will not solve energy poverty problems. Instead, the industry uses this public welfare to ensure its own political power and strangle global progression to a cleaner more sustainable future.

Medupi and Kusile

A prime example of the folly of this situation is public support for two of the world's largest coal plants in South Africa. The first of the two plants, Medupi, sought financing from the World Bank and was met with fierce grassroots resistance. The bruising battle opened fresh wounds at an institution with a checkered history in energy lending dating back to the Narmada dam struggles of the 1980s.

Ultimately, despite the abstention of key governments (the UK and US amongst them) the Bank decided to give the project a staggering $3.75 billion dollars – nearly a quarter of its energy portfolio over the past three years.

Just a year later Kusile, despite similarly stiff resistance, was able to secure financing from the US Export Import Bank. This enormous plant was financed despite the fact that it will be built in an area that already exceeds dangerous levels of air pollution.

Perhaps the most troublesome aspect of these projects is the tremendous financial burden they pose to average South Africans. Large industrial users, who will secure the majority of the supply, have locked in Apartheid-era sweet heart deals that ensure the lowest electricity prices in the world, meaning the state-owned utility Eskom has no choice but to recoup the investment from average ratepayers.

In order to pay for Kusile, Eskom will seek an additional 25% rate increase on top of electricity prices that have already gone up 137% (mostly to finance Medupi). These skyrocketing rates are forcing poor households off the grid while doing nothing to provide electricity access to the 25% of South Africans who aren't connected to the grid at all.

The people's response

These two bruising battles have galvanized grassroots resistance to dirty energy while revealing a stark contradiction that world governments simply can't gloss over here in Durban. Just as the Sierra Club has helped lead a "coal swarm" in the United States, grassroots activists worldwide are leading a wave of activism targeted at ending the fossil fuel industry's grip on politics and our future.  

As India, and the world, grapple with the ever increasing costs of dwindling cheap coal supplies, there is a need to make a clean break with these failures by ending public financing for dirty energy. Another future is possible, and communities here in Durban are demanding that we seize it.

-- Justin Guay, Sierra Club International Program

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