Renewable energy and local development: Seven lessons from the mining industry

ABSTRACT

Having long depended on fossil fuels for energy generation, South Africa is now investing in renewable energy. Like its mining operations, its renewable energy plants will have local implications. Renewable energy companies are therefore required by government to engage with communities to contribute to socio-economic development. We present seven lessons we believe the renewable energy sector can learn from the mining industry. We argue that the new industry must: manage social disruption, understand community complexities, create responsive institutions and the capacity to support industry practice, employ trained community practitioners, be clear about the aims of local development, encourage economic diversification in remote areas and, importantly, in view of problems caused by downscaling in the mining industry, plan for the possible closure of projects. Renewable energy projects could then serve and shape local development.

KEYWORDS:

• Renewable energy
• local development
• mine closure
• remote locations
• South Africa

1. Introduction

Although South Africa’s development has long been closely associated with the minerals–energy complex, this is now slowly changing. Coal, on which so many towns were founded (see e.g. Binns & Nel, 2003; Campbell et al., 2016; Marais et al., 2016), is being supplemented by other sources of energy. The long-term goal is that renewable energy should contribute 40% of South Africa’s energy requirements (McEwan, 2017). In nearly 100 places across South Africa, wind turbine, solar photovoltaic and concentrated solar farms are now producing cleaner forms of energy. Increasingly, local economic and community development is being driven by renewable energy projects. This transformation is largely due to the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP, referred to as ‘renewable energy projects’ in this paper). The Department of Energy and the National Treasury have procured 63 projects and approved another 39, representing more than 7000 megawatts (MW) of renewable energy capacity. The projects are at various stages of development, over 43 already feeding electricity into the grid (Independent power producers Office, 2016). Investment in renewable energy generation in South Africa increased from a few hundred million US dollars in 2011 to US$5.7 billion in 2012, and in 2013 it stood at US$4.5 billion (United Nations Environment Programme [UNEP]/Bloomberg New Energy Finance, 2016).

Since many of the renewable energy projects are located in poor rural areas of South Africa, the government requires independent power producers, in line with today’s ‘green economy’ thinking, to foster local development. The producers are expected to generate not only green energy but also community benefits. The project specifications require them to spend 1.5% of their revenue on socio-economic development and in addition it is suggested they spend a voluntary 0.6% on enterprise development (Wlokas, 2015). Ownership of a project must be shared with a legal entity representing the local community, which must hold a minimum of 2.5% of the shares. A local job creation quota is also stipulated. These development initiatives apply to the area within a radius of 50 km from the project.

These initiatives are laudable. However, recent research has shown how difficult it is to put them into practice. In its response to the requirements, the renewable energy sector appears to be designing and implementing socio-economic development without learning from the experience of the mining industry. Already research is pointing to an over-emphasis on quantitative results, insufficient project evaluation, sometimes arbitrary definition of ‘communities’ and ‘beneficiaries’, the absence of a framework to guide the planning of local initiatives, and pressure to spend funds locally without the required institutional capacity (Baker & Wlokas, 2014; Wlokas, 2015).

Many of the challenges the renewable energy industry currently faces have also been documented in the mining industry. Ey and Sherval (2016:4) note that ‘extractive projects are interwoven within their sites of operation in powerful political, economic and socio-economic ways’. The negative effects of mining on communities have been variously analysed as ‘social disruption’ (England & Albrecht, 1984), ‘the resource curse’ (Obeng-Odoom, 2012; Haslam-McKenzie, 2013) and the consequence of neo-liberalism in mining (Ferguson, 2005). The effects of mining companies’ corporate social responsibility (CSR) programmes have been widely studied and debated (e.g. Hamann, 2004; Owen & Kemp, 2013).

Although its economic output and environmental implications are much smaller, the renewable energy sector can learn from the mining sector’s experiences with local communities. In this paper we outline seven lessons we believe the new industry can learn from the mining sector.

2. Lessons from the mining industry

Our focus in this paper is not only on lessons from the mining industry for the local settlements or communities in which renewable energy projects will operate, but also for the renewable energy companies. There are a number of reasons for having chosen the mining industry and the local setting.

First, mining has a long history in terms of affecting local areas. One of the most prominent ways in the twentieth century was through the creation of mining towns (Littlewood, 2014) or the expansion of existing towns adjacent to new mining activities. The history and development of mining towns are of importance, as most of the renewable energy projects have been located near formal towns (as opposed to areas in which traditional land is located) (McEwan, 2017). Initial work on mining towns used the ‘social disruption thesis’ to explain the negative social consequences of mining (Wilson, 2004). However, the resources slump of the mid 1980s, which had negative local implications for mining towns, also led to questioning of the wisdom of establishing permanent settlements near mining sites. The neo-liberal response that featured in Australia from the early 1990s focused on outsourcing, block roster shift work, high salaries and fly-in–fly-out arrangements. Consequently, multinational mining companies often tried to avoid investing in local development and having to invest outside their mining activities. It is within this neo-liberal context, and the formal urban yet small-town environments, that independent power producers find themselves operating in South Africa. The neo-liberal context of the renewable energy programme is discernible both in the outsourced nature of these contracts and in the fact that many of these companies are multinational corporations. Also, although the prospects for long-term employment will be very low, the construction phase of many renewable energy projects will create many jobs. There is, moreover, a possibility that especially the construction period will be associated with social disruption.

A second reason why the mining industry is relevant to renewable energy projects lies in the notion of a ‘social licence’ to operate. Even if this term was originally used in the broader business context, it has often been used in relation to the mining industry (Bice, 2014). The concept of a social licence has partially been applied in the legislative requirement for social and labour plans in South Africa (in accordance with the Mineral and Petroleum Resources Development Act No. 28 of 2002). Linked to their mining licence, mining companies are obliged to contribute a share of their operating profit to local and economic development. The requirement in renewable energy projects to invest in local development is yet another version of a social licence.

Third, within the above context of needing a social licence to operate, many mining companies have invested heavily in creating an industry of community development workers. The evidence from the existing research reveals both good and bad practice. Fourth, in a number of mining settlements, many mining companies play a dominant role in employment provision and local or social development. Although the dominance of renewable energy companies is likely to be less pronounced, there is very little doubt that local communities will pressurise companies to provide employment to larger numbers of locals and to contribute more to local development. Fifth, like mining, renewable energy projects may not continue in perpetuity. While decline and bust could put an end to dependency on these projects, they are further likely also to have implications for local employment and expenditure. The final reason for considering the mining industry is the existing link between mining and energy in South Africa – commonly referred to as the ‘minerals–energy complex’. The point is that existing energy creation in South Africa has a protracted history of being linked to mining.

Our notion of lessons to be learned from the mining sector is related to a number of actors. First, we relate the lessons to the local towns and communities. The location of renewable energy projects is sure to have both positive and negative implications that will have to be understood and planned for at the local level. Second, our lessons relate to the nature of the interaction between renewable energy companies and local communities. These lessons should help companies the better to manage the social risks of their operations, to obtain value for money and to ensure appropriate outcomes with respect to their local development requirements.

2.1. Lesson 1: Manage disruption of place attachment

‘Place attachment’ is an emotional bond that attaches people to places (Altman & Low, 1992). It affects the behaviour of not only individuals but also entire communities (Manzo & Perkins, 2006). Place attachment serves a range of functions: survival, achievement of goals, continuity, a sense of belonging, enhancement of identity and self-esteem (Scannell & Gifford, 2010). Disruption of any of these functions will affect people’s lives and, therefore, how people respond to the siting of a renewable energy development.

Both the mining sector and the energy sector can be catalysts for change in the environment, whether of a physical or a socio-cultural nature. When implementing mining and energy projects, it is important to take not of the many ways in which the features and resources of places matter to people. Disruption of any of them may significantly affect local lives. Proposed developments evoke positive or negative responses from those living in the vicinity of such developments, depending on how a new development affects (or is perceived to affect) any of the functions of place attachment and local resources. Ey and Sherval (2016:4) have summarised an extensive body of literature in the mining sector and have problematised the way in which ‘extractive projects are interwoven within their sites of operation in powerful political, economic and socio-economic ways’. It has been extensively documented that both the mining and the energy sectors can be a catalyst for a range of changes, including alterations to the local physical environment that people may be attached to or depend on (Younger & Wolkersdorfer, 2004) and also to socio-cultural environments (Banks 2009). The Grasberg Mine in Papua New Guinea, the Carajas Mine in Brazil and the mine at Potosi in Bolivia are examples of places in which significant damage was caused to the local community and environment by mining. The damage included a loss of habitat for a range of species, water pollution and the disruption of community life as a result of both infrastructure development and migration (International Institute for Environment and Development, 2001). Similar damage has, for example, been reported in South Africa: coal mining damaged the soil composition of local arable land and social systems were affected when large numbers of workers took up residence in small communities (Farrell et al., 2012).

Developers must be cognisant of the many ways their projects can shape places and plan them in accordance with the locality. To do this they will have to understand people’s relations with their local areas (de Groot & Bailey, 2016). Johnson et al. (2009) argue that understanding sense of place could serve the needs of communities and professionals in development practice. An example of this in the mining sector is the work of the Socialgold operation in Central America, which engaged local communities in the environmental, social and economic impact assessment (Erzurumlu & Erzurumlu, 2015). This kind of approach not only enhances rapport with the community; it also allows local knowledge and expertise to be applied in impact assessments.

Energy generation sites are not much different from mining sites because projects under the REIPPPP mandate will also ‘reform not just the physical terrain, but also the socio-cultural and political contexts upon which it makes its mark’ (Ey & Sherval, 2016). Common examples of impacts that arise similarly in the mining and renewable energy sectors and that may be relevant to REIPPPP projects are: a decline in amenity (Haggett, 2011), wildlife impacts (Haggett, 2008), displacement of livelihoods (de Groot et al., 2014) and even displacement of people, for example when implementing large-scale hydropower or solar plants (Tilta & Gerkey, 2016) These can all disrupt existing bonds between people and places. Corporate social responsibility programmes and mandatory community benefits of REIPPPP projects are examples of potential social and economic consequences of renewable energy projects that may affect place attachment. These initiatives must comply with a suite of impact assessments and community benefit requirements, and their successful delivery is strongly dependent on the local context. The often rural locations of REIPPPP developments in South Africa have diverse environmental, socio-economic, political and cultural backgrounds. As a consequence of the strong focus on achieving economic development in CSR and REIPPPP initiatives, there is a danger that of overlooking the possibility that negatively affecting place attachment may impede development. A place-based perspective requires an understanding of what aspects of the local area matter most to communities, community strength and weaknesses, threats and opportunities, and peoples’ relations with their local areas and considers this in assessments of renewable energy projects (de Groot & Bailey, 2016). In the context of renewable energy development in South Africa this means that projects and plans should be understood within the range of social, cultural and political dynamics of the local area and the extent to which energy developments have the capacity to shape the place.

Although the scale and severity of impacts may somewhat differ between the mining and renewables sectors, neglect of place attachment and dependencies by the part of the renewable energy sector may well damage the physical environment and socio-cultural structures of communities. The key lesson regarding place attachment is that ensuring local benefits from renewable energy generation requires engagement with the places. It further requires determining how these benefits may construct, frame and/or alter place relations. Because places are socially constructed, such efforts have the potential to connect issues like community cohesion, development and participation (Manzo & Perkins, 2006) – all of which are important with respect to sustainable energy deployment. ‘Community characterization’, a concept suggested by de Groot (2015), requires developers to reach out into the community before project implementation. This could help in the identification of priorities for community-benefit spending and capacity building, it could build rapport with the local community and it could ensure that participatory requirements are met. An approach of this kind could further contribute to the avoidance of damaged place relations as have been experienced by the mining and energy sectors worldwide.

2.2. Lesson 2: Understand community complexities

The literature is critical of the mining industry’s homogeneous view of communities. Although this attitude is changing, the industry’s community development projects still tend to underestimate the complexity of communities and fail to understand local processes (Kemp, 2010). More than 60 years ago, Hillery (1955) identified 94 different definitions of ‘community’ in the scientific literature, and the debate as to what precisely ‘community’ is or means to different people continues today. The perception that a community is a small, static, bounded entity with a homogeneous social structure and shared norms is misleading (Agrawal & Gibson, 1999).

As with the mining industry, the complexity and the fluidity of communities pose a challenge to the renewable energy industry. The renewable energy programme is attempting to manage this by means of the ‘50 km radius’ definition of the beneficiary community and allowing companies room to decide who within this area will actually benefit. This artificial, spatial concept of a community, which cuts across sections of society with different interests, languages, cultures, economic possibilities and political power, has been a matter of concern to renewable energy stakeholders. They argue that a more flexible approach should be applied that will reflect socio-spatial changes in communities (Tait et al., 2013). The renewable energy industry should bear in mind that every definition of ‘community’ is a social construct and will include some groups and exclude others (Kapelus, 2002). Companies must make sure that they follow a transparent and participatory process when defining their communities.

When the mining industry’s CSR and corporate social investment (CSI) programmes do not sufficiently take into account the complexity of communities, this results in inequitable benefits, social conflict and failed development (Kapelus, 2002). A lack of attention to community politics can fuel power squabbles and cause conflict with respect to both tangible and intangible benefits (Kemp et al., 2011; Owen & Kemp, 2014). The renewable energy industry could avoid these problems by recognising the different actors and social groups within communities, understanding their specific interests in the renewable energy project and allowing them agency to influence project design and outcomes (development benefits and costs). To minimise community conflicts, the relevant renewable energy company should ensure equal representation of all community interest groups in important meetings, insist on transparent and democratic decision-making processes, monitor supported development activities and hold community representatives accountable for their actions.

2.3. Lesson 3: Provide industry with practice support

Over time, the mining industry has increased its capacity for managing corporate community relations. In the early days of mining, a friendly face would have qualified a geologist to act as the ‘community liaison’ between an exploration team and local residents. Today, it is common for mining companies to employ teams of professionals specialising in community relations, community development, external relations and stakeholder management. The Centre for Social Responsibility in Mining in Australia describes experiences of this evolution (Kemp, 2010; Owen & Kemp, 2013).

Industry bodies like mining chambers and mining associations were originally set up to deal with engineering issues. Only recently have institutions been created to discuss the community relations and development side of mining operations. Most prominent of these is the International Council on Mining and Metals, which replaced the Mining, Minerals and Sustainable Development initiative and is mandated to enhance the sector’s sustainability. Despite the Council’s efforts to support the industry’s community relations practice by means of ‘toolkits’ and handbooks, the ten-year review of the Mining, Minerals and Sustainable Development initiative (Buxton, 2012) re-emphasised the need to ‘step up the game’, especially in the light of increasing social pressures and ‘community demands’, and to demonstrate a stronger commitment to robust community-engagement procedures. The review also indicated that the mining industry should support government efforts to harness mining to ‘positive development’. It noted that community development remained a complicated field in both rhetoric and implementation, but that there was evidence of progress and more sophisticated approaches (e.g. company-specific tools like Anglo’s socio-economic assessment toolbox) to tackling these issues. It recommended that the industry implement company practices and industry standards effectively, mainstream grievance mechanisms in response to the increased importance of social impact assessments for permits and regulations and use the community development potential of the industry to build further capacity among communities and in industry.

Ganson and Wennmann (2015) argue that the private sector manages socio-political risks best when adopting an integrated, long-term and flexible approach to working with the research, facilitation and mediation capacity that is available amongst local stakeholders and is supported externally. Members of the South African renewable energy industry increasingly value dedicated institutional capacity to facilitate engagement processes and support industry practice (Wlokas & Soal, 2016). The required funding and political support are, however, lagging behind. In South Africa, the renewable energy industry has various support associations, including the SA Wind Energy Industry Association’s working group, Wind for Communities, established in 2013, and the SA Photovoltaic Industry Association’s subcommittee on Socio-Economic Development and Enterprise Development, established in 2015, which started meeting jointly in 2016. Their series of roundtable conversations represent the sole effort to share the mining industry’s expertise on this topic with the renewable energy community. In addition, the series has issued a first, tentative invitation to trustees representing local beneficiary communities to attend one of the events. It is early days for the renewable energy industry, but this progress indicates the importance of institutionalising the capacity to enable companies and the industry as a whole to respond to current practical, political and policy questions.

2.4. Lesson 4: Employ trained community practitioners

Community development has, over the past 25 years, been gaining global recognition as a discipline. It has ‘an intrinsic orientation towards democratic and participatory outcomes of collective change, inclusion and equality’ (Hart, 2012). Mining companies rely on community development practitioners or community relations practitioners to manage the social risks associated with their operations so as to obtain a social licence to operate. Social risks are ‘the range of potential impacts on a project that may result from its interaction with communities and stakeholders’ (Barclay et al., 2009:15) and require careful management so as to avoid significant costs to a company. The sector typically assigns staff with backgrounds in human resources or public relations to this important task and, in some instances, anecdotal evidence suggests that even non-performers from other departments are moved to community relations. Poor management of social risks has cost companies millions of dollars (Davis & Franks, 2014) in lost productivity and staff time when communities have protested or blocked the entrance to a mine. Deterioration of relations and conflict between the company and the community may well be a manifestation of the inadequate skills of those who have been mandated to promote good community relations. According to Ernst and Young’s annual ‘Business risks facing mining and metals’ publications (2013–14, 2014–15 and 2015–16), social risks have remained in the top five business risks the mining industry faces. Social risk management should, therefore, be part of core business and adequately resourced through rigorous selection and training of practitioners.

The mining sector’s increasing emphasis on ‘social performance’ has led to the development of structured processes and standardised practices for community development. Anglo American’s socio-economic assessment toolbox, for example, is widely used to improve social performance in the industry. Other international bodies, such as the International Finance Corporation and the International Council for Minerals and Mining (ICMM), have contributed not only to the body of knowledge on community development but also to standardisation and thus to professionalising community relations work in industry.

In the renewable energy sector in South Africa, the requirement to pay for socio-economic and enterprise development means that companies must employ qualified staff. As in the mining sector, these staff members typically have backgrounds in areas outside community relations, such as human resources. If they are not retrained and reskilled with the competencies required for community development, the sector is likely to experience the same negative consequences as those experienced in the mining sector. The skilling of people also applies to staff of the Department of Energy, which does not have the skills necessary for monitoring and advising independent energy producers.

The producers need to take note of this lesson from the mining industry. Despite some local differences, community development can be said to be quite similar across industries. The ICMM defines ‘community development’ as ‘the process of increasing the strength and effectiveness of communities, for the betterment of people’s quality of life and their participation in the decision-making that will achieve greater long-term control over their lives’. Though this objective is meant to be common across sectors, local and contextual differences determine the priorities and methods of implementing community development initiatives. The producers need to familiarise themselves with and take part in the community relations professionalisation efforts being undertaken by the mining industry. The training that academic institutions and other training providers have developed to professionalise community relations in the mining industry could easily be broadened to include the renewable energy sector. Some of the well-known universities offering accredited training specifically targeting community relations practitioners include the University of Queensland in Australia and the University of the Witwatersrand in South Africa. The University of Queensland’s Centre for Social Responsibility in Mining offers students training and qualifications in community relations to develop and strengthen skills and to invest their work with credibility. In Africa, the University of the Witwatersrand, working in partnership with Synergy Global, was the first university to develop and offer certified short courses aimed at the professionalisation of community relations. The Community Relations Practice Programme, managed via the Centre for Sustainability in Mining and Industry, annually offers four modules leading to a National Qualifications Framework Level 6 Certificate of Competence. These are resources with which not only independent producers but also the sector at large could collaborate in training their development practitioners and to persuade curriculum planners to include renewable energy contexts.

In a review of the experiences of community relations practitioners across Africa who had attended the Community Relations Practice programme, Coulson et al. (2015:3) conclude that ‘the skills and foundations for building resilient relations are universal’. This implies that community practitioners from the renewable energy sector can benefit from the existing training offerings of the mining industry.

2.5. Lesson 5: Local planning capacity and responses are important

Many mining towns around the world were established to support the mining companies’ workforces, and for many years the companies managed these towns. In many cases, the dominance of a company had the effect of limiting a town’s ability to diversify its economy. The slump in resource prices from the mid 1980s meant that mining companies had to rethink their commitment to mining towns. A first reaction was to transfer the management of these towns to local government. But this allocation of responsibility to local government did not necessarily have appropriate results. Negi (2014:1007), summarising the local problems associated with national decisions in the African context, says, ‘the local state appeared to struggle in the face of social and spatial changes induced by the mining boom. In the mid-1990s, collaborative planning and hybrid governance models became necessary because, while in many countries national government made decisions about mining rights, local areas had to bear the brunt of mining development’ (Warhurst & Naronha, 2000). Hamann (2004) observes, however, that collaborative planning generally does not work well in areas of weak local government, and even struggles in more affluent areas, and that many mining companies were eager to provide local investment funds through their social corporate investments. For Hamman (2004) this meant a commitment to short-term projects rather than longer-term collaborative planning.

To promote local collaborative planning in South Africa, mining legislation (Mineral and Petroleum Resources Development Act of 2002) requires companies to produce social and labour plans. Whereas Cawood (2004) calls this a ‘paradigm shift’, in the international context these plans represent a form of compliance with a social licence to operate. The idea is that companies will link their local strategies with local government’s integrated development plans (IDPs). The guidelines for these plans mention ‘regeneration of mining economies’ and ‘provision of adequate living conditions and housing’ (Cawood, 2004). However, there is very little evidence that the plans have either improved collaborative planning in mining areas (Van Rooyen & Lenka, 2016) or created post-mining economies (Marais, 2013b). In many cases, short-term projects and CSR projects dominate the planning landscape. Long-term collaborative planning is being hampered by weak local government.

In responding to local planning issues, renewable energy companies should take particular note of the three following points. First, the remote locations of many projects are unlikely to yield adequate government capacity to engage in local development planning, so it will be necessary to avoid an uneven power balance in which the company dominates. This could well be achieved by tapping into the technical expertise that can be provided by other spheres of government. Second, companies must ensure that the design of these local development funds does not overlook the importance of local planning issues. If companies distribute local development funds outside the planning ambit of local government this could have unintended consequences, such as failure to plan for expanding informal settlements because of inward migration of workers attracted to the projects. Third, the way in which local development funds are currently structured could quite easily bypass local planning structures. The one important lesson of collaborative planning could well not materialise in renewable energy projects, as the funding might go to institutions outside government.

2.6. Lesson 6: Encourage economic diversification in remote areas

Mines are often located far from a country’s main economic centres. South Africa is no exception in this respect. Although gold mining on the Witwatersrand created Johannesburg and what is today known as Ekurhuleni, most mining in the past 20 years has been in peripheral locations. The situation in the renewable energy sector is similar: approximately 60% of renewable energy plants are located in the arid part of Northern Cape province, which has the lowest population density in South Africa.

Mining has had large-scale consequences for remote communities. Many of these communities have struggled to diversify their economies. This is partly because arid environments do not provide adequate natural capital to support economic diversification, but also because of the dominant role of mining companies and the cyclical nature of mining, an unwillingness to make land available for purposes other than mining (Petkova et al., 2009), the environmental damage associated with mining (Kemp, 2010), the shortage of skills (Rolfe et al., 2007) and the fact that mining activities sometimes result in the disruption of water supply, earth tremors and power shortages (Petkova et al., 2009) – all things unconducive to the development of businesses beyond the ambit of mining. There is even reference to mining communities being ‘locked in’, as very few mine workers have the required skills to work outside the mining environment (Lawrie et al., 2011). Development of peripheral areas is a much discussed notion in international literature. One of its key proponents is Rodriguez-Pose, who is an advocate of the importance of improving networks (pipelines) between peripheral and core areas (see Rodriguez-Pose, 2001)

The peripheral location of most of the renewable energy projects in South Africa means that they may experience similar problems. The nature of renewable energy and the prominence of large numbers of multinational corporations mean that long-term local employment will be minimal. Local employment may be limited to a few cleaners and technicians, and higher-paid engineers and project managers will fly in (or drive in) as required.

Local projects may create skills suitable for local participation, but may not help to solve the inherent economic problems of remote places. An example of this are self-help projects focusing on local markets, as the transport cost of accessing national markets outweighs production costs. Projects of that kind are likely to fail. One way of dealing with remoteness is to improve the connections between the local and broader economies (the networks Rodrigues-Pose refers to). Creative ways of improving connectivity (which could include internet access but also training in skills that could help people find jobs in a highly competitive economic environment) should be high on the agenda of local development projects.

2.7. Lesson 7: Plan for the possible closure of projects

While much of the literature has concentrated on the effects of mine development on communities, the effects of mine closure are increasingly receiving attention. Lawrence (2005:555) notes that the ‘excitement and fanfare that surrounds the opening of a new mine is never present when it finally closes’, and Warhurst and Naronha (2000:154) ask how mine closure can be managed so that it does not ‘result in impoverishment at the close of mining operations’. The socio-economic consequences of mine closure have been noted in work in the Global North (Neil et al., 1992) and in developing countries (World Bank, 2002) and there is also a small but growing body of work on the topic in South Africa (Binns & Nel, 2001, 2003; Marais, 2013a, 2013b; Marais & Nel, 2016). The evidence from these sources suggests the importance, not only of environmental rehabilitation and government involvement in planning for downscaling, but also of planning for closure when mining is initiated. All of this could be relevant to the renewable energy sector’s relations with local communities.

Four points about mine closure may be relevant to the new sector. First, closure has had large-scale negative socio-economic and environmental consequences for mining localities (Marais, 2013a). Second, communities are generally ill prepared for the closure (Marais, 2013b). Third, the closure is often the direct result of global resource trends and competitiveness (Marais & Nel, 2016). And, fourth, it is not the closure itself that is the main concern but rather the way that many of the mining companies deal with it: in many cases, closure is accompanied by feelings of betrayal, resentment, exasperation and anxiety in the community (Pini et al., 2010).

Contracts have been signed with renewable energy producers for 20 years, but there are many eventualities that could cause earlier closure. The inevitability of closure, sooner or later, means that producers must ask themselves a number of questions. What are the implications of decommissioning for renewable energy projects? Have the probable socio-economic and environmental consequences been taken into account? How will environmental rehabilitation take place? Who will suffer the long-term consequences of land-use changes associated with renewable energy? Although project duration has been set at 20 years, lessons from the mining sector make it clear that mine closure is often the result of economic factors outside the local environment. Lack of competitiveness, for example, may well be a reason for closure earlier than anticipated. Similarly, decommissioning can happen because of improvements in technology or cheaper alternatives becoming available. The renewable energy companies should consider whether the local development initiatives make provision for decommissioning and for dealing with the consequences of plant closure.

3. Conclusion

While the large-scale roll-out of renewable energy projects will reduce the negative consequences of coal-generated energy in South Africa as a whole, it could also bring with it its own set of problems and potentials for local communities. It cannot simply be assumed that a cleaner environment and a commitment to local development will solve all local problems. Our assessment of the existing literature on the mining sector has enabled us to develop the above lessons for the renewable energy sector. We argue that, as mining companies have tended to dominate local development processes, renewable energy producers must take cognisance of the way that large construction projects may affect local communities in remote small-town economies. Experience from the mining sector has shown that caution should be exercised when defining and understanding communities. The mining industry has in general struggled to develop appropriate responses to local communities. We foresee that renewable energy projects may also find community relationships difficult to manage. We warn against narrow definitions, such as defining the beneficiary community as the area falling within a 50 km radius. The example of the mines demonstrates the importance of creating responsive institutions and the need for skilled community practitioners. The mining sector continues to struggle with these two issues. The renewable energy sector will have to strive to do better.

We have highlighted the importance of clarity with respect to local development goals. Mining companies tend to favour CSR funds that put them in a position to dominate local communities through top-down management practices and so to avoid participation in collaborative planning initiatives. The way local development funding arrangements have to date been structured suggests that they have been no more than a form of ‘institutionalised’ CSR. These funds are used as do-good monies and there seems to be little evidence of collaborative planning. We argue that this propensity should be reconsidered so as to incorporate collaborative planning. This could make it possible to promote genuine development for communities in the remote areas, and help companies to plan for the longer-term implications of the closure of their projects. Renewable energy generation, despite holding the promise of cleaner energy production, could lead to many of the undesirable local consequences of mining. The lessons offered in this paper may help to equip the renewable energy sector to manage local development better than the mining industry has done.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Lochner Marais http://orcid.org/0000-0002-0299-3435