Renewables

Energy Transition Forum: People should benefit from energy transition

Photo: Energy Community

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October 5, 2023

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Published:

October 5, 2023

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The Energy Community region needs a green deal with a just energy transition in its core, and in the Western Balkans the process will cost EUR 31 billion to EUR 36 billion by 2030, according to the participants at the Energy Community Just Transition Forum in Skopje. The process, primarily aimed at preserving the livelihoods of coal workers and their families and based on inclusiveness, still hasn’t become visible for the people in the affected areas. The transformation also concerns environmental and climate issues.

The Energy Community Secretariat held its Just Transition Forum in the capital of North Macedonia. Officials, experts and representatives of state-owned power utilities agreed that the country is the frontrunner in the energy transition in the Western Balkans. However, one of the main takeaways was that the concept of a just energy transition remains largely unknown to the population of coal regions.

The plans to decommission coal-fired power plants and close all mines herald a major blow to employment, prompting the need for social programs. In addition, the affected areas need to quickly overcome their dependence on coal and switch to other economic activities. One 0f the most sensible solutions is to turn the devastated coal land into solar parks and open the way for new energy technologies.

Energy Community Secretariat Deputy Director Dirk Buschle said the debate needs to involve all stakeholders such as working groups, regions, municipalities and civil society. “The transition per se has crossed the point of no return. Make no mistake by believing that we are discussing whether or not countries will transform. It is about the impact of this transformation,” he pointed out.

Necessary coal workforce support makes up only 1% of just energy transition costs

There are 40,000 coal workers in the Western Balkans and another 60,000 jobs indirectly depend on the sector, said energy and climate specialist Anna Vasylyeva from the European Bank for Reconstruction and Development (EBRD). Power plants that run on fossil fuels have a combined capacity of 8.7 GW, of which 2.6 GW is scheduled to be shut down by the end of the decade.

The bank calculated that the Western Balkans require EUR 31 billion to EUR 36 billion climate-neutrality aligned just energy transition by 2030 excluding regional economic diversification. Most is needed for renewables, 52%, and it would primarily be covered by the private sector. Another major chunk, 42%, is for grids and storage while 5% of the sum is envisaged for the closure, remediation and repurposing of coal assets. It leaves 1% for workforce support, for 32,000 employees.

EBRD coal phaseout costs
Photo: EBRD

“The Energy Community region needs a green deal. And the core of this deal is the issue of just transition,” said Head of Green Deal Unit at the Energy Community Secretariat Adam Cwetsch. He underscored that the countries in question have different starting positions than their counterparts in the European Union.

Cwetch also pointed to the social costs of pollution and emissions and called on including them in the equation as a “deal with nature.” It would also ensure the funds needed to be redirected into the economy, in his view.

“The recipe for a social deal is first to have awareness,” he added. Cwetsch explained that a study last year showed 80% of people in the Energy Community are not familiar with the term just transition.

Local communities are coming up with best alternatives

North Macedonia aims to phase out coal, deploy renewables and reduce its electricity import dependence, State Secretary in the Ministry of Economy Razmena Cekic-Durovic said. She highlighted the Roadmap for a Just Transition that the government adopted in June. It also established the Just Transition Council, led by Deputy Prime Minister in Charge of Economic Affairs Fatmir Bytyqi.

Local communities that will be the most affected by the coal phaseout tend to work harder and come up with the best alternatives, Cekic Durovic asserted.

Sense of certainty is crucial for people’s willingness to stay in coal regions

“The Western Balkans are small economies. If we want to work on economic convergence with the EU, a joint approach is fundamental. As we open possibilities of integrating into the single market, we are also strengthening the economic potential of the region by working on synergies and creating a common regional market, said Michela Matuella, Acting Director of the European Commission’s Directorate-General for Neighbourhood and Enlargement Negotiations – DG NEAR.

The slogan of the just energy transition is to leave no one behind. The region’s population is rapidly decreasing, so giving people a sense of certainty is crucial for their willingness to stay. One such place is the city of Bitola and its surrounding area, North Macedonia’s main coal hub.

Mayor Toni Konjanovski said the municipal authority is working on energy efficiency and district heating in public buildings to cut air pollution. There is a tree-planting program as well. Photovoltaics are being set up on the roofs of schools, including in the rural area.

Bitola and the neighboring municipalities of Novaci and Mogila are establishing a joint firm for public transformation, Konjanovski explained. He stressed that the intention is to cut the rates of migration from villages to the city and prevent the emigration of youths. Bitola is working on a project for the Žabeni industrial zone with the World Bank, the mayor added and stressed it would be based on low-polluting industries.

Transition will be just or there will be no transition

From the very beginning, the European Parliament endorsed the approach that the transition will be just or there will be no transition, said Ryszard Pawlik, advisor to Jerzy Buzek, a lawmaker and the parliament’s former president. One of the most critical factors is a skilled workforce, in his view.

The European Battery Alliance said its sector would require 800,000 trained, reskilled, and upskilled workers by 2025, Pawlik underscored. “Our just energy transition will succeed only if all citizens understand and feel that this is made with them and for them and not despite or against them. It is simply about new jobs, the air they breathe and the water they drink,” he stated.

The World Bank is investing in making heating more affordable, given the link between energy poverty and using dirty fuels, Lead Specialist Wolfhart Pohl said.

Among other examples, he mentioned a project with the government of Poland for strategic land management of 800 square kilometers of devastated coal land and other areas. Conversely, five square kilometers of forest was recently cleared for a battery factory, he underscored. There is also an endeavor in Kosovo* for 25 square kilometers of former coal areas.

Declarations, action plans don’t stop people from emigrating

Denis Žiško from the Aarhus Center in Bosnia and Herzegovina highlighted the lack of tangible measures with regard to just transition. “Our countries have signed the Sofia Declaration three years ago. The only thing we have is the action plan and nothing concrete on the ground. I fear that we are going to continue to produce documents, and the impact of that is people from this region will leave and go live and work in decarbonized Europe,” he commented.

Moreover, the energy transition, which concerns companies and the commercial sphere shouldn’t be confused with just transition, the activist stressed.

People need to be shown benefits of just energy transition
Union leader Slobodan Trendafilov warned that green energy must be introduced without losing jobs and livelihoods

Trade unions are aware that the Western Balkans should follow the EU’s plan to fully decarbonize by 2050 and that it primarily depends on political will, President of the Federation of Trade Unions of Macedonia Slobodan Trendafilov said. However, the main focus should be placed on human capital, the workers, in his words. They are producing electricity in harsh conditions, he noted.

The level of discussions needs to be expanded to the local level, where social councils need to be established, according to Trendafilov. In addition, he explained that his trade union maintains a good dialogue with companies. Green energy must be introduced without losing jobs and livelihoods, the trade union leader warned.

National power utilities lean on solar power

State-owned coal and power producer Elektrani na Severna Makedonija (ESM) is the driver of the energy transition in North Macedonia. The utility is lining up projects for installing photovoltaics on abandoned coal ash and slag dumps and depleted open pits.

Director of Legal and General Affairs Dušica Seizovska Jovanovikj recalled that the government made a deal with investors under a public-private partnership for two solar power projects of 50 MW each in the Oslomej coal complex to take in one ESM’s employee per every megawatt.

Elektroprivreda Bosne i Hercegovine (EPBiH) has been analyzing the possibility of repurposing former coal mining areas for the past few years and transfering some of the workforce to new projects, Expert Associate for Development of Power Generation Elma Redžić said. Particularly, the utility, controlled by the government, has developed 15 solar power projects of 300 MW in total, she revealed.

North Macedonia made a deal with private investors to take in one ESM’s employee per each solar megawatt that they install

Another direction that the company opted for is to switch a coal plant unit into a combined heat and power (CHP) facility on biomass. A pilot project for energy crops is underway. The capacity would be 25 MW, Redžić asserted. In the winter, it would mostly be used for heating while in the summer the system would primarily generate electricity, she added.

Montenegro’s state-owned Elektroprivreda Crne Gore (EPCG) is funding its solar rooftops program with proceeds from the national carbon tax that it pays, Executive Officer Ivan Mrvaljević explained. He said it is a good example of an intermediary solution for the entire Western Balkans.

The company already installed 30 MW and 70 MW more is underway. Additionally, the scheme includes assistance in preparing documentation.

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