Tag Archives: energy

South Africa’s Road to Growth is Paved With Coal

By Nikki Fisher
Coal Stewardship Manager, Anglo American Coal

South Africa is already largely urbanized. Today, nearly two thirds of South Africans live in urban centers. Although the rate of urbanization is slower in South Africa than some other emerging economies, it is projected that 77% of the country’s population will reside in urban areas by 2050.1 Energy from coal is intertwined with urbanization in South Africa in two important ways. First, in urban centers, baseload coal-fired power plants provide electricity to support much-needed industrial growth and the employment opportunities created. Second, coal-fired power plants have directly supported the development of several urban centers, especially in the Mpumalanga region.

Since 1990, the percentage of South Africans living in urban centers has increased from 52% to 65%. The demand for electricity, and the coal that makes up 93% of South Africa’s electricity generation, has grown at similar rates during this period (see Figure 1). Urbanites consume more electricity than their rural counterparts due to higher levels of access and more money to pay for services. The disparity is considerable: On average, urban households in South Africa consume 4800 kWh each year while rural households consume about 800 kWh.2

FIGURE 1. Growth in urbanization, electricity demand, and coal demand in South Africa since 19903,4

FIGURE 1. Growth in urbanization, electricity demand, and coal demand in South Africa since 19903,4

Today, South Africa’s electricity sector is facing considerable challenges—including a lack of sufficient, reliable baseload power—that could impact urbanization and overall economic growth. South Africa has also made climate commitments. All options are being explored as different energy sources will be called upon to make progress on increasing electricity generation while meeting the country’s climate goals. Thus, the South African Coal Roadmap (SACRM) was prepared to explore the activities and interventions needed for the coal industry to maximize its contribution to the country in the face of an uncertain future.


South Africa is currently facing an electricity crisis deemed to be one of the country’s greatest challenges over the last 20 years. Rolling blackouts began in November 2014 and the power supply system will continue to be under extreme pressure, with an imminent risk of load-shedding of up to 2000 MW at any time for at least the next two to three years.

This is not the first time that the country has experienced rolling blackouts. In 2007/2008, several months of load-shedding occurred, which motivated the recommissioning of three previously moth-balled power stations and a strong demand-side energy efficiency drive. Coupled with the global financial crisis and subsequent in-country economic downturn, the result was decreased electricity demand and temporary relief of pressure on the grid. Even so, ensuing grid constraints have resulted in slower economic development estimated at roughly R300 billion (~US$25 billion) or 10% of the potential economic growth.5

Economists’ estimates about the economic impact of the controlled blackouts on the country vary between R6 billion6 and R20 billion per month7 (US$0.5 billion and US$1.65 billion, respectively) for Stage 1 load shedding (i.e., 1000 MW load shed). These estimates are based on the day-to-day impact on business of running generators, changing shifts, and lost work time; the less conservative estimates include the long-term costs of job losses, stunted economic growth, and less investment in the country.

The inability of the country to meet electricity demand has led to downward revisions of the economic growth forecast by the South African Reserve Bank from 2.5% to 2.2% for 2015. Several ratings agencies have also downgraded the country’s credit rating, which has had a negative impact on investor confidence in the economy.7


In 1994, the majority of South Africans did not have access to electricity. Since then an ambitious electrification program has increased the proportion of electricity users in the total population from 36% to 84%.8 This electrification program would not have been as widespread without low-cost electricity, which, in turn, could not have been achieved without coal as a fuel source. It is because coal is abundant, accessible, secure, reliable, and affordable that it is the cornerstone of energy in South Africa—today coal is used to produce 93% of electricity and 30% of liquid fuels. In excess of 60 billion tons of coal resources and reserves remain in South Africa.

The nation benefits from the coal industry in several ways apart from its contribution to affordable electricity. It is the mining industry’s top revenue earner, ahead of platinum and gold. At a time when the current account deficit is precarious, the country can ill afford to lose revenue from coal exports. Moreover, the coal industry as a whole employs 83,000 people in a country with a 25% unemployment rate, with employees earning a combined $1.6 billion in salaries and wages.

With the majority (i.e., 72% in 2014) of South Africa’s primary energy coming from coal and given its demonstrated benefits to the economy, new coal-fired power plants were planned. The greatly anticipated new 4800-MW coal-fired power stations, Medupi and Kusile, were originally anticipated to start coming online in 2012. However, both projects have been plagued by construction delays and budget overruns. The first unit of Medupi was synchronized onto the grid on 2 March 2015 and is expected to deliver roughly 780 MW onto the grid by June 2015. Neither plant will be running at full capacity before 2020.

As a consequence of these delays, Eskom has been running many of the existing, aging power stations beyond their expected lifetimes and delaying scheduled maintenance to keep the lights on; this has led to breakdowns, unplanned maintenance, and a severely constrained system. Almost one third of Eskom’s 45 GW of installed capacity is presently offline due to planned and unplanned maintenance.7 Despite the new capacity that has come online, including an increase in non-Eskom power production by 8.5% from 2013 to 2014, overall production has decreased by 1%.9

The large build program, primarily funded through tariffs, resulted in the electricity price in South Africa increasing 78% between 2008 and 2011, and it will continue to rise in real terms for several more years. The National Energy Regulator of South Africa (NERSA) approved a 12.7% increase in the electricity price for Eskom for the 2015/2016 financial year.10 This has significant impacts on affordability and continued access to electricity for many households and on energy-intensive businesses.


The SACRM was developed and published in 2013 as a means to explore the activities and interventions that the coal industry should undertake to maximize its contribution to the country in the face of an uncertain future. Despite South Africa’s energy challenges, the country is working to balance its development and climate priorities.

The SACRM is the only place that comprehensive information about the coal value chain has been compiled into a single document. Four scenarios, shown in Figure 2, were developed. These scenarios were based on the local and international response to climate change as a framework for developing the roadmap.

FIGURE 2. The four scenarios used as a framework for the South African Coal Roadmap

FIGURE 2. The four scenarios used as a framework for the South African Coal Roadmap

According to the Roadmap, the country will need a total of between 85 and 125 GW of installed capacity by 2040, depending on the level of renewable energy in the mix, up from 42 GW in 2010.11


To encourage economic growth and build a thriving society, energy security is a priority. Under all of the scenarios modeled in the SACRM, including the “Low-Carbon World”, South Africa cannot afford early retirement of existing power stations. In line with this, the lives of many of the existing coal-fired power stations have been extended and are now scheduled for closure between 2030 and 2040. New power stations will be required to replace this capacity and, to meet demand growth, clarity is required on technology options that will be used. The SACRM makes some recommendations for actions necessary to keep the lights on.

Coal Roadmap Recommendations

Secure contracts for continued coal supply to existing power stations and invest in new mines. Impending coal shortfalls for the existing power stations are a serious risk to energy security. Dubbed the “coal supply cliff”, a massive shortage (in excess of 60 million tons) in coal supply is anticipated from 2018. The reasons for this are several. When the current fleet of power stations was commissioned, long-term supply contracts were signed for the life of the power station (usually 40 years). The lives of many of these power stations have since been extended, and most power stations have been run at loads higher than originally expected when the coal supply contracts were signed. In addition, some of the resources have not been as extensive as originally assumed. The recommissioning of the three moth-balled power stations in 2008 also created additional and unexpected demand for coal. The majority of the new coal resources that could potentially fill the supply gap require extensive exploration and feasibility studies before mines can be opened and supply contracts signed.

The cost of mining is increasing, due to coal being sourced from lower-quality deposits with higher operating costs associated with increased processing requirements and longer transport distances. In all scenarios in the SACRM, the price of coal to Eskom will increase. Agreement must be reached on a coal price mechanism and a fair rate of return on investment being sought by mining companies to encourage investment in new mines. The most viable model for a domestic supply coal mine is for it to be a multi-product mine that benefits from the higher returns possible on the export market. Figure 3 shows the disparity between export and domestic tonnages and prices for 2012.7

FIGURE 3. Domestic versus export tonnages by sales volume and revenue

FIGURE 3. Domestic versus export tonnages by sales volume and revenue

Open new coal fields. Traditionally, the coal supply has come from the Central Basin, where the majority of the coal-fired power stations are located. All scenarios in the SACRM show that high-grade utility coal from the Central Basin will be very constrained from the mid-2020s onward and essentially depleted by 2040. During this time, just one mine switching from domestic to low-grade export supply could create an immediate domestic coal shortfall. To reduce this risk, it is prudent to open alternate sources of coal, of which the largest and most likely resource is the Waterberg coalfields. As rail, transmission, and water infrastructure from this area to the power stations in the Central Basin is lacking, and given the long lead times required for construction of such infrastructure, the SACRM recommends that access to the Waterberg be enabled without delay.

Resolve coal transport challenges to Central Basin power stations. In 2010, roughly 22% of the coal supplied to Eskom was delivered via road. The externalities associated with road transport include damage to roads, increased road accidents and fatalities, and increased air pollution leading to human health impacts. To address this, Eskom is undertaking a road-to-rail migration together with Transnet Freight Rail. A shift from road to rail will impact the trucking companies and associated jobs and these impacts must be carefully considered and minimized.

Align policy and licensing procedures. Investment in new mines requires a supportive and enabling regulatory environment. The current regulatory situation relating to complex environmental permitting requirements under multiple laws (and consequently multiple government departments) creates extensive delays and affects the timely delivery of mining investments. Alignment and certainty of regulatory and permitting procedures for new mines is critical.

Other policies where certainty is needed include statements made by the Department of Mineral Resources regarding coal as a strategic resource, which may limit coal exports and impact negatively on investment; carbon tax or other carbon pricing mechanisms; Broad-Based Black Economic Empowerment requirements and interventions to prevent hoarding of rights and situations where a resource may be urgently needed for Eskom supply, but is not a priority for the mining company that holds the rights.

The mining “majors” (Anglo American, BHP Billiton, Glencore, Exxaro, and Sasol) account for 85% of coal production in South Africa and 90% of the supply to Eskom. The remaining supply is from smaller players.12 Eskom now requires that 55% of their supply be sourced from black-owned businesses.13 The capacity of these smaller businesses to fund and develop mines may be limited, which indicates that there is a strong need for cooperative business partnerships between either Eskom or the existing majors and the smaller players.

Provide clarity on new electricity build. The future of electricity in South Africa is governed by the Integrated Resource Plan for Electricity 2010–2030 (IRP).14 The IRP included 9 GW of nuclear power by 2023; however, the program for investment and development of nuclear power is far behind the schedule required to have it online by 2023. A revision of the IRP is due for publication in the near future, and clarity is needed on new and replacement baseload generation as well as who is to take responsibility for the new build. The Renewable Energy Independent Power Producer Programme has been successful, bringing 1700 MW capacity on to the grid, and expedition of the baseload Independent Power Producer Programme (IPP), for both coal and gas, will help to ensure energy security if favorable market conditions are created for the IPPs.

Investment in electricity infrastructure ranges from R930 billion in the “More of the Same” scenario to R2060 billion in the “Low-Carbon World” scenario because of the higher capital cost of renewable technologies, which may decrease over time, and because of the additional installed capacity required due to the lower load factors of renewables. The higher capital costs are offset by lower operating costs, a diversified investment mix, and a more resilient grid. However, increased nuclear and renewables in South Africa’s energy mix is likely to result in higher electricity prices which may put additional strain on an emerging economy.

Mitigate impacts and the transition to a low-carbon economy. In the longer term, the role of coal in the electricity mix will be dependent on the ability to mitigate the environmental impacts of coal-fired power generation.

Transition to a diversified grid will help to mitigate emissions, as can the improvement of power station efficiency, which will significantly reduce emissions per unit of power compared to the existing fleet. The demonstration of technologies such as underground coal gasification and high-efficiency combustion is also important. Carbon capture and storage (CCS) may also help to reduce emissions, but CCS in South Africa is in its infancy and any mitigation potential would only be realized in the long term.

Plan for closure. At least six power stations will close in the Mpumalanga region before 2040. The resulting job losses could ultimately lead to the decline of the existing urban centers that have developed around the coal-mining and power-generating region. It will be important to create diversified industries in this area and to undertake capacity building as well as skills development for the people in those areas to help to mitigate these impacts.

It is recommended that transition plans are in place for communities that have developed around power plants now slated for closure.

It is recommended that transition plans are in place for communities that have developed around power plants now slated for closure.


South Africa is currently best represented by the “At the forefront” scenario, where ambitious (albeit conditional) climate change commitments have been made. Continuing on this trajectory could have serious implications for global competitiveness, employment opportunities, and energy security. The outcome of COP21 and the country’s Intended Nationally Determined Contributions committed to at COP21 will play a large role in determining our energy future.

South Africa is on the precipice of a crisis. Careful planning and prompt action are essential for a future where electricity demand can be met, economic growth takes place, and a just transition to a lower-carbon economy is possible.


  1. United Nations. (2014). World urbanization prospects, esa.un.org/unpd/wup/Highlights/WUP2014-Highlights.pdf
  2. Castello, A., Kendall, A., Nikomarov, M. & Swemmer, T. (2015, February). Brighter Africa: The growth potential of the sub-Saharan electricity sector. McKinsey & Company, www.icafrica.org/fileadmin/documents/Knowledge/Energy/McKensey-Brighter_Africa_The_growth_potential_of_the_sub-Saharan_electricity_sector.pdf
  3. U.S. Energy Information Admininstration. (2015). International energy statistics, www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=2&aid=2&cid=SF,&syid=1990&eyid=2012&unit=BKWH
  4. World Bank. (2015). Data: Urban population (% of total), data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS
  5. George, D. (2015). DA alternative budget 2015/16: Increasing job opportunities and growth, not tax, www.da.org.za/2015/02/da-alternative-budget-201516-increasing-job-opportunities-growth-tax/
  6. Du Plessis, H., & Legg, K. (2015, 10 February). Tripped switch at Koeberg “cost SA billions”. Business Report, www.iol.co.za/business/news/tripped-switch-at-koeberg-cost-sa-billions-1.1815851#.VPgFCu8cT5o
  7. Chamber of Mines (CoM). (2013) Facts and figures available online at www.chamberofmines.org.za/media-room/facts-and-figures
  8. South Africa Census. (2011). www.statssa.gov.za/Census2011/default.asp
  9. Statistics South Africa. (2014). Electricity generated and available for distribution (preliminary), beta2.statssa.gov.za/publications/P4141/P4141December2014.pdf
  10. NERSA. (2014, 3 October). NERSA decision on the implementation plan of Eskom’s MYPD2 regulatory clearing account, www.nersa.org.za/Admin/Document/Editor/file/News%20and%20Publications/Media%20Releases%20Statements/Media%20Statement%20-%20Energy%20Regulator%20Decision%20on%20implementation%20of%20MYPD2%20RCA.pdf
  11. The South African Coal Roadmap. (2013). www.sanedi.org.za/archived/wp-content/uploads/2013/08/sacrm%20roadmap.pdf
  12. Burton, J., & Winkler, H. (2014). South Africa’s planned coal infrastructure expansion: Drivers, dynamics and impacts on greenhouse gas emissions, www.erc.uct.ac.za/Research/publications/14-Burton-Winkler-Coal_expansion.pdf
  13. McKay, D. (2015, 20 February). Eskom softens coal crisis stance. Miningmx, www.miningmx.com/page/news/energy/1649806-Eskom-softens-coal-crisis-stance
  14. South Africa Department of Energy. (2011). Integrated resource plan for electricity 2010–2030, www.energy.gov.za/IRP/irp%20files/IRP2010_2030_Final_Report_20110325.pdf

The author can be reached at Nikki.fisher@angloamerican.com


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Urbanization, City Growth, and the New United Nations Development Agenda

By Barney Cohen
Chief of Branch, Population Division,
Department of Economic and Social Affairs,
United Nations

In September 2015, member states of the United Nations (UN) will meet in New York to finalize a new global development agenda that will guide the international community’s efforts to eradicate poverty, reverse global trends toward unsustainable patterns of consumption and production, and protect and manage the environment over the next 15 years. For the past 15 years, the international community’s efforts have been guided by the UN’s Millennium Development Goals (MDGs), the eight-point agenda adopted by member states in 2000 that focused on eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality and empowering women, reducing child and maternal mortality, halting the spread of HIV/AIDS, ensuring environmental sustainability, and strengthening global partnerships for development, by the target date of 2015. The world has made notable progress in reducing extreme poverty over those years, in large part because of the remarkable economic growth that China has achieved. Some countries look set to attain all or most of the MDGs prior to the 2015 deadline. Overall, however, progress has been uneven both within and between countries and regions.1 At the same time, signs of global climate change and environmental degradation have become increasingly visible and the international community has come to recognize that global goals and targets for sustainable development need to be reprioritized in order to give environmental objectives a somewhat higher profile.


In designing the new global development agenda, it will be important for policymakers to understand and account for the nature and extent of the major demographic changes likely to unfold over the next 15 years and how such changes can be expected to contribute to or hinder the achievement of the new sustainable development goals. Much will depend, for example, on how well countries manage their cities. Cities have always been focal points for economic activity, innovation, and employment. Historically, most cities developed because of some natural advantage that they possessed in location related to ease of fortification or transportation, access to markets, or access to raw materials. Today, cities play a central role in creating national wealth, enhancing social and economic development, attracting direct foreign investment and manpower, and harnessing both human and physical resources in order to achieve gains in productivity and competitiveness. Cities also offer other advantages that are important for achieving sustainable development. Higher population density associated with urbanization provides an opportunity for governments to deliver basic services such as water and sanitation more cost-effectively to greater numbers of people. Higher population density may also be good for minimizing the effect of humans on local ecosystems. Despite the high rates of urban poverty found in many cities in low-income countries, urban residents, on average, enjoy better access to education and health care, as well as other basic public services such as electricity, water, and sanitation, than people in rural areas. For example, it has been estimated that 94% of urbanites have access to electricity compared with only 68% of rural residents.2

The challenge, of course, is that as cities become ever larger, managing them inherently becomes increasingly complex. A basic determinant of the world’s ability to achieve the post-2015 development agenda will be the quality of governance at all levels. In this context, it is important to note that the structure and organization of urban governance has itself undergone significant changes over the recent past, resulting in solutions to urban problems increasingly being sought at the local rather than the state or national level. This has created an urgent need to strengthen the capacity of local governments charged with solving new and persistent environmental and social service challenges that accompany rapid urban growth so that the benefits of urban living are shared equitably. In many cities, unplanned or inadequately managed urban expansion has led to urban sprawl, pollution, environmental degradation, and, in some cases, heightened exposure to the risk of natural hazards (e.g., floods and landslides). Future urban expansion needs to be undertaken in a more sustainable and inclusive manner, and needs to be accompanied by a reduction in the number of slum dwellers, an expansion of infrastructure to ensure greater access to basic services for the urban poor, and the implementation of policies that preserve the natural assets within cities and surrounding areas, protect biodiversity, and minimize tropical deforestation and changes in land use.


Cities are currently home to just over half of the world’s population and nearly all of the 1.1 billion increase in global population projected over the next 15 years is expected to occur in urban areas. For that reason, the United Nations Population Division has published a new resource, World Urbanization Prospects: 2014 Revision [Highlights]. The report contains the latest official UN estimates and projections of urban and rural populations for major areas, regions, and countries of the world from 1950 to 2050 and estimates and projections to 2030 of all urban agglomerations with 300,000 or more inhabitants in 2014. As such, it was created to provide important insights into the size and characteristics of future urban challenges and opportunities.3

The latest official UN estimates were provided in the 2014 World Urbanization Prospects.

The latest official UN estimates were provided in the 2014 World Urbanization Prospects.

As the report makes clear, urbanization has proceeded rapidly over the past 60 years. In 1950, more than two-thirds of people worldwide lived in rural areas and slightly less than one-third resided in urban areas. In 2014, 54% of the world’s population lived in urban areas, and the coming decades will not only see continued global population growth but also continued urbanization so that all of the growth in global population over the next 15 years is projected to occur in urban areas. Furthermore, those projections show that urbanization, combined with the overall growth of the world population, could result in the addition of another 2.5 billion people to the global urban population by 2050, at which time the world is expected to be one-third rural and two-thirds urban—almost the exact opposite of the situation observed in the mid-20th century (see Figure 1).

FIGURE 1. Estimated and projected populations in urban and rural settings, 1950–20503

FIGURE 1. Estimated and projected populations in urban and rural settings, 1950–20503

Just over the brief span of the next 15 years, the timeframe for the implementation of the new UN development agenda, the world’s urban population is projected to expand 28%. All regions, with the exception of Europe, are projected to increase the size of their urban population by at least 15%—with Africa and Asia projected to have the largest increases of 63% and 30%, respectively (see Table 1).3 Perhaps not surprisingly, given the size of their populations, the greatest urban growth is expected to occur in India, China, and Nigeria. Taken together, these three countries are projected to account for 37% of the total growth of the world’s urban population between 2014 and 2050. By 2050, India is projected to have added an additional 404 million urban residents, China an additional 292 million, and Nigeria an additional 212 million.


The new UN report differs from previous versions because, for the first time, estimates and projections from 1950 to 2030 are provided for all urban agglomerations with populations currently over 300,000. Previously, data were reported only for cities with over 750,000 residents. Although there is obviously much uncertainty about the future course of urbanization and city growth, and, in particular, the exact trajectory of any given city or urban area, the broad trends across regions and across city sizes over a 15-year time horizon can be expected to be reasonably robust and are very clear: The world’s fastest growing cities are located in Africa and Asia and tend to be medium-sized cities of between one and five million residents.

Given the projected increase in the global urban population, it is not surprising that the world is projected to experience not only an increase in the absolute number of large cities, but that the largest cities are projected to reach unprecedented sizes. “Mega-cities”, conventionally defined to be large urban agglomerations of 10 million or more, have become both more numerous and considerably larger in size. In 1990, there were 10 such mega-cities, containing 153 million people. By 2014, the number of mega-cities had nearly tripled to 28, and the population that they contain had grown to 453 million inhabitants, accounting for roughly 12% of the world’s urban dwellers. While Tokyo, currently the world’s largest urban agglomeration with 38 million inhabitants, has grown at an annual rate of roughly 0.6% over the last five years, other megacities such as Delhi (with 25 million residents) and Shanghai (with 23 million) have been growing at more than 3% per annum over recent years. Such rapid growth is creating significant challenges for local authorities charged with delivering essential services. Rounding out the list of the top 10 largest urban agglomerations are Mexico City, Mumbai, and Sao Paulo, each with around 21 million, Osaka with just over 20 million, Beijing with slightly under 20 million, and New York-Newark and Cairo, each with around 18.5 million inhabitants.


While there is no doubt that large cities will play a significant role in absorbing future anticipated growth, the new report also makes clear that at least for the foreseeable future the majority of the world’s urban residents will continue to live in far smaller urban settlements.3 In 2014, close to one-half of the world’s urban population lived in settlements with fewer than 500,000 inhabitants whereas only around one in eight lived in the 28 mega-cities with 10 million inhabitants or more. Although the percentage of the urban population living in relatively smaller urban settlements is projected to shrink over time, even in 2030, the anticipated final year for the implementation of the soon-to-be-adopted new UN development agenda, small cities and towns will still be home to around 45% of the population. Typically, residents of small cities in developing countries suffer a marked disadvantage in the provision of basic services, including provision of piped water, sanitation, and electricity, compared to residents of medium or large cities. Furthermore, researchers have found that in developing countries, rates of poverty are typically higher in smaller cities than in medium or larger cities, and that infant and child mortality are negatively proportional to city size.4 Given the role that will be played by small cities in accommodating future population growth, improving the provision of basic services in such cities must remain a priority.

Urbanites have better access to basic services, such as water, trash removal, and electricity.

Urbanites have better access to basic services, such as water, trash removal, and electricity.


It has long been recognized that the size, composition, and spatial distribution of human populations can substantially affect the likelihood of achieving sustainable development goals. Over 20 years ago, in 1994, the International Conference on Population and Development’s Programme of Action pointed out that unsustainable consumption and production patterns were contributing to the unsustainable use of natural resources and environmental degradation as well as to the reinforcement of social inequities and poverty. In designing the new post-2015 development agenda, member states of the UN need to ensure that efforts to improve the quality of life of the present generation are far-reaching, broad, and inclusive, but do not compromise the ability of future generations to meet their own needs. Accomplishing these ambitious goals will depend on identifying strategies to expand access to resources for growing numbers of people, eradicate poverty, increase standards of living, reduce unsustainable patterns of consumption and production, and safeguard the environment.

Cities have become the principal venue for attempting to achieve the goals and targets of the new development agenda. Consequently, one of the central challenges over the next 15 years is finding means to take full advantage of the potential benefits of urbanization and city growth in ways that lessen the obvious potential negatives. The realization by the international community that, alongside poverty reduction, environmental objectives must feature more prominently in any new list of global goals and targets suggests that attention to issues of energy use and energy efficiency5 are likely to attract much more attention than ever before. Continued urban population growth combined with rising standards of living suggests that energy use and greenhouse gas emissions will be much higher in the future, unless there is concerted action to reduce them. Therefore, one essential element of the new sustainable development agenda will be to encourage local authorities to invest in new cleaner energy infrastructure relying on high-efficiency, low-emissions fossil-fuel technologies and utilize new technologies that take advantage of alternative energy sources.


The views expressed in this article are those of the author and do not necessarily reflect those of the United Nations.


  1. United Nations. (2014). The millennium development goals report: 2014. New York: United Nations, www.un.org/millenniumgoals/2014%20MDG%20report/MDG%202014%20English%20web.pdf
  2. International Energy Agency (IEA). (2011) World Energy Outlook 2011. Paris: IEA. www.worldenergyoutlook.org/resources/energydevelopment/accesstoelectricity/
  3. United Nations. (2014). World urbanization prospects: The 2014 revision [Highlights]. New York: United Nations), esa.un.org/unpd/wup/
  4. National Research Council. (2003). Cities transformed: Demographic change and its implications in the developing world. Washington, DC: National Academies Press.
  5. International Energy Agency (IEA). (2014). Capturing the multiple benefits of energy efficiency. Paris: IEA.


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Emerging Workforce Issues for the U.S. Energy and Mining Industries

By Cy Butner
Study Director, Former Senior Program Officer, National Research Council
Elaine Cullen
Vice President, Safety Solutions International Northwest Operations
Charles Fairhurst
Professor Emeritus, University of Minnesota, and Senior Consulting Engineer, Itasca Consulting Group, Inc.
Elizabeth Eide
Director, Board on Earth Sciences and Resources, National Research Council


The National Research Council of the National Academies has recently concluded a study of emerging workforce trends in the U.S. energy and mining industries, and the resulting report provides important messages for all of these industries.1 The study covered oil, natural gas, coal, carbon capture, use, and storage (CCUS), nuclear, geothermal, solar, wind, and nonfuel minerals, along with the electric grid (including the Smart Grid), workforce education and training, workforce safety and health, U.S. federal government workforce issues, and workforce data and data sources. The workforce components in industry, government, academia, and skilled labor at the entry and senior levels were considered. The study focused on the “upstream” portion of the workforce (associated with the production or extractive portion of the industries).

U.S. Energy and Mining Workforce

People and technology will be critical to meeting U.S. energy and mining workforce needs. Photo: Peabody Energy

Since no single body collects, analyzes, and reports data on all aspects of the energy and mining workforce, data and information from a range of sources were considered in the NRC report.1 Where possible, data from federal sources were used, but these data have limitations and data from other sources (including industry, industry associations, professional societies, and academic sources) were used to supplement federal datasets. (The report presents data for each industry and sector, and its appendixes contain an extensive compilation of workforce-related data from federal sources and an overview of these sources.) Although the available data are quite disparate and do not give a complete or precise description of these industries or their workforces, the data and information clearly show the general nature of the workforce and the important trends, issues, and concerns related to it. Following is a summary of the study results.

Energy in the U.S. comes from many sources with established commercial industry bases: e.g., fossil fuels, nuclear energy, and renewable energies.  Figure 1 provides the historical and projected energy use by fuel for the U.S. for 1980–2035. Although the use of coal as an energy resource is projected by the U.S. Energy Information Administration (EIA) to decrease slightly from 21% of total U.S. energy use in 2010 to 20% in 2035, coal will remain a sizable segment of the nation’s energy portfolio. (New EIA data released after the workforce study was released are largely consistent with these estimates—indicating that coal provided 20% of U.S. energy consumed in 2011 and projecting it to provide 19% in 2040.2)

Workforce issues Figure 1

Figure 1. Primary U.S. energy use by fuel, 1980–2035 (quadrillion Btu). Source: EIA 20123

The Big Picture

The present and future are bright for energy and mining jobs overall, with demand for workers at all levels remaining strong for the foreseeable future. Moreover, these jobs should continue to pay well.

However, two primary factors that cut across the energy and mining sectors do adversely affect their workforces—the aging of the baby-boomer population and the need for workers with science, technology, engineering, and math (STEM) skills. Baby boomers (people born between 1946 and 1964) represent about a third of the U.S. workforce and a large number of expected retirements will occur within the decade. There are not enough younger workers in the “pipeline” to replace them. Also, many energy and mining jobs at all levels require STEM skills. This need is increasing as the workplace becomes more complex and technical, and the existing pipeline of STEM-capable students and workers is inadequate to satisfy anticipated needs.

Promising Solutions

Potential solutions to these problems offer promise. Solutions will need to address the issues of attracting more people into the energy and mining workforce and providing adequate workforce education and training.

Traditional sources of workers will not be sufficient to meet the projected demand. The report outlines the need for urgent and strenuous efforts to attract young and nontraditional workers (ethnic minorities and women) to avoid a workforce shortfall.

Education and training programs are essential if we are to have a workforce of adequate size and ability. It is necessary to bring young people into STEM and technical programs that can lead to energy and mining jobs, beginning at an early age (as early as grade seven). Also, present and future jobs require more education than in the past. Education beyond high school is required for many energy and mining jobs, but a degree from a four-year institution is not required for most. The need for education is increasing and current educational approaches are generally not meeting it. Key components of a more effective education and training system should include community colleges, universities, and education–industry partnerships. There are some very effective programs already underway that target minority portions of the young population and could be expanded and emulated.

The GeoFORCE Texas program at the University of Texas at Austin,4 for example, is an industry–education partnership that uses a cohort model and focuses on bringing disadvantaged minority students in Texas into the earth and engineering sciences. This program has expanded to the GeoFORCE Alaska program at the University of Alaska Fairbanks.5 The AfricaArray program at Penn State University6 also focuses on minority students and seeks to develop a pool of undergraduate and graduate students for the geoscience workforce in the U.S. and Africa using linked research and training programs. The National Science Foundation (NSF) provides another example through its support of Advanced Technological Education centers and projects at selected community colleges. These centers focus on particular industries or sectors, perform industry–educator analyses of the required skills and competencies, and aid other colleges in the development of curricula aligned to the skills requirements.7

With their ability to quickly adapt to changing conditions and to work with industry to closely align a curriculum with industry needs, community colleges are providing new, additional pathways for workforce education and certification. Also, in partnership with universities and colleges, community colleges can serve as a pathway to four-year institutions by providing remedial and entry-level education to prepare students for the higher level of undergraduate study. Going forward, it will be important for universities and community colleges to expand partnerships, and critical for committees of experts to be engaged in aligning programs of study with industry requirements.

Partnerships among industry, educational institutions, and educators, especially at community colleges or in the first two years of higher education at four-year institutions, are critical to the future of U.S. energy and mining. They create competency-based educational pathways to industry careers by aligning programs of study with industry requirements.

Competency models exist in manufacturing (which is closely aligned with the energy industry) and in several energy sectors, and there is great potential for extending such models into all of the energy and mining industries. In competency models, basic skills are building blocks to industry careers. As skills are learned at distinct levels, certification can be provided and students can move to higher skill levels and greater achievement. Needed skills can be learned in secondary or community college programs, and lead to high school and/or college credit and degrees and to industry-granted skills certifications that map to career and educational pathways. Figure 2 shows a competency model developed by the Center for Energy Workforce Development (CEWD) for energy generation, transmission, and distribution.

Workforce issues Figure 2

Figure 2. Energy industry competency model: Generation, transmission, and distribution. Source: CEWD 20108

Universities are also an essential part of workforce development. Specialized programs at the bachelor’s and master’s levels are needed, especially for mining, petroleum engineering, and geosciences. For years, university geoscience and petroleum engineering departments, faculty, and undergraduate enrollment had been decreasing, but these trends have reversed in the last few years. Mining and mineral engineering programs and faculty have experienced a long decline in numbers, and the U.S. graduates a nonsustaining number of mining engineers. Shortage of faculty is a serious problem in all of these disciplines, which impacts the oil and gas, mining, and geothermal workforces. An increase in industry and government funding for academic research would attract and train students and strengthen faculty.

A possible solution to advancing science and engineering, along with enhancing student enrollment, in mining, petroleum, and geological engineering in the U.S. could be the establishment of interdisciplinary graduate Centers of Excellence in Earth Resources Engineering at major research universities. Such centers could bring attention to the technical challenges faced by the extractive industries, offer more holistic earth resources curricula, and develop the professional expertise needed by these industries. These centers would complement the classical programs of the U.S. schools of mines (some of which may establish centers, either alone or with other universities). The report notes that establishing such centers now could ensure the U.S.’s position as a technological leader in mining engineering.

What About the Coal and Hard-Rock Mining Workforce?

The U.S. Bureau of Labor Statistics (BLS) reported average annual U.S. employment in 2010 for coal mining as about 81,100 and about 8100 for support activities for coal mining (totaling around 89,200, all in the private sector).9 The U.S. Mine Safety and Health Administration (MSHA) reported a 2010 U.S. total operator employment of about 89,200 and total contractor employment of about 46,300, for a combined total of around 135,500.10 The BLS data undercount employment largely due to limitations associated with the North American Industry Classification System (NAICS) taxonomy they use, which results in undercounting contractor employment.

BLS projects coal mining employment (excluding support activities) to decrease to 77,500 by 2020.11 In comparison, EIA projections show that total U.S. employment in coal mining could be around 86,500 in 2020, 115,700 in 2030, and 128,600 in 2035.12 As Figure 3 indicates, EIA projects that domestic coal production, as an energy source, is expected to decline through 2015, after which production is expected to grow at an average annual rate of 1.0% through 2035.

Workforce Issues Figure 3

Figure 3. Coal production by region, 1970–2035, reference case (quadrillion Btu). Source: EIA 201213

For nonfuel mining, BLS reports a 2010 U.S. workforce of about 128,000 (all in the private sector, except for about 270 in local government) and BLS projections suggest a net increase of 3300 private-sector jobs by 2020 in metal ore mining and nonmetallic mineral mining and quarrying.14 MSHA reports a 2010 U.S. employment of about 160,100 for nonfuel mining operators and about 65,500 for nonfuel mining contractors (totaling around 225,600).15

For mining, an aging workforce and international competition for talent are driving a pending workforce crisis for professionals and workers, and an existing crisis for mining faculty in the U.S. The mining workforce is older than the overall U.S. workforce, with more than half of the mining sector expected to retire by 2029. This large number of anticipated retirements presents challenges for ensuring safety and health and for replacing lost experience in the workspace.16 Also, many university faculty in mining engineering will be eligible to retire by or around 2020.17 With low production of Ph.D. graduates, this could lead to programs losing faculty positions. The relative absence of consistent federal research funding at mining schools has made the situation worse. Moreover, changing U.S. demographics are expected to cause a workforce shortage that probably will not be offset by anticipated increases in mining production efficiencies (from automation or technological advances, for example). Australia has demographics and production characteristics similar to the U.S. and offers evidence for an emerging U.S. mining workforce shortage.

Workforce safety and health are important considerations for the mining industry. Several key factors require consideration. The training of new workers is critical, and mentoring and knowledge capture for use in training are necessary. As the workplace becomes increasingly diverse, an important consideration is that supervisors and managers will need training in leading and communicating with a diverse workforce. Effective communication is key to maintaining a safe work environment.

Data indicate that workers with less than one year of experience or who are over 55 years of age are more likely to suffer occupational injury and death than other workers. In mining, the worker population is bimodal, with many workers in two high-risk groups—the young and the aging. With the mining sector facing many expected retirements, the gap between new and experienced workers is expected to grow. Injury and fatality rates are anticipated to increase as a result.

MSHA reports that of the 21 coal miners killed in 2011, 10 had one year or less of experience at the task they were doing.18 Inexperience is not related to age alone (workers can change professions late in life), but it is most often a factor for new, young workers.19 An analysis of metal/nonmetal mining fatalities between 2002 and 2006 revealed that workers between 17 and 24 years of age had the highest fatality rate among all age groups of miners who did similar tasks and workers over 55 years of age ranked second.20


Along with the U.S. workforce challenges come opportunities. Growth in the energy and mining sectors and many pending retirements are providing unprecedented opportunities for young students and workers to enter these fields. Also, U.S. demographics are changing, with growing ranks of minority and women students and people from other countries entering the workforce and seeking degrees and certifications.

These changes underscore the importance of seeking new workers from both traditional and nontraditional backgrounds. Also, current and future workers will need more education than in the past. Enhancing the education pipeline with innovative approaches to expand workforce preparation can enlarge the flow of qualified workers into the U.S. workforce.

Overall, the future is very bright, provided the necessary preparations are made.

Where to Go From Here?

The workforce study covered a broad range of industries and workforce sectors, each with its own issues, and the study committee that wrote the report found several overarching themes and potential solutions that cut across this diverse landscape. Accordingly, the committee formulated a set of overarching findings and recommendations as a capstone to accompany the conclusions and recommendations specific to the individual workforce sectors. An encapsulation of the report’s overarching recommendations follows. The discussion is excerpted from the report, with some editing for brevity, and the recommendations have been edited only slightly where needed for clarity.


Traditional routes to degrees in higher education do not adequately align curriculum to energy and mining industry requirements and are increasingly unaffordable and inaccessible. These routes do not provide enough qualified STEM-educated workers and professionals to meet the U.S. energy and mining workforce needs. The goal in addressing the current education pipeline’s shortfalls is to create an education system that can respond to changes in the economy more quickly and produce a more flexible, STEM-competent workforce.

Recommendation 1:  The Department of Education, in collaboration with the Department of Labor, state departments of education, and national industry organizations, should convene (perhaps in workshops or as a working group) critical industry, government, and educational leaders to create and support new approaches that provide multiple pathways in higher education that take full advantage of the attributes of our higher education system. These workshops and/or meetings should be convened in different parts of the country. These models would benefit greatly from including, for example:

  • Community colleges integrating industry-recognized credentials, their learning standards, and content into associate degree programs, providing more “on” and “off” ramps to postsecondary education, resulting in stackable interim credentials with real value in the labor market, and leading to direct employment or continuing postsecondary educational opportunities; and
  • Partnerships between four-year colleges and universities and community colleges to create new pathways for STEM curriculum, with the first two years of STEM-related programs of study being offered at the community college and the second two years being offered at the university, thereby expanding the capacity of the critical university degree programs.

Business–Education–Government Partnership

No one sector—government, industry, or education—can provide the needed energy and mining workforce on its own. University research also can contribute to workforce development by enhancing the education pipeline.

Recommendation 2:  To address common goals and to provide a mechanism for industry’s engagement with the education process and the graduates it produces, federal agencies (e.g., the NSF, Department of Energy, Department of Defense, National Institute for Occupational Safety and Health, and National Institutes of Health) should consider providing increased research funding to universities, with matching funding from industry, with specific requirements to incorporate two outcomes from the research: (1) advancing technology or business processes to drive innovation and enrich graduate and undergraduate education and (2) developing university faculty who work on the cutting edge of research to enhance the quality of higher education.  The engagement of both faculty and graduate students in this research will extend the pool of STEM-qualified faculty for all educational levels.

Energy and Mining Information for the Public

Building the best educational pathways in the world and the most qualified STEM faculty for U.S. educational institutions does not ensure that more students will pursue energy and mining programs of study. The public perception of U.S. extractive industries is often negative (due, for example, to concerns over pollution, noise, environmental degradation, and safety and health issues). This image dissuades some from pursuing careers in these industries. Also, although renewable energy is generally seen as positive, some negative perceptions (e.g., questionable technology viability, long-term existence, and cost-effectiveness) may dissuade people from joining those workforces. Information about all of these industries can educate the public about their importance to the nation and the career opportunities they offer, and it also may motivate students to pursue STEM courses and prepare for energy and mining careers. The government has a natural role to play in providing and disseminating such information as a complement to nongovernment sources.

Recommendation 3: National industry organizations, in partnership with educational institutions, should embark on a national campaign to create and provide accurate and timely information on the industries and their careers, educational and career navigation resources, and experiential learning opportunities to explore jobs and career paths in energy and mining. These entities should work with the Department of Labor and other government institutions to ensure that timely government information is included.

Recommendation 4: In like fashion, national industry organizations and educational institutions should also embark on an informational campaign to educate students, parents, educators, and public policy makers about the importance of the energy and mining industries to the economic and national security of the nation, the relevance of STEM education to jobs and careers in these industries, and the opportunities available in these industries—including timely government information.

Data Needs

To redesign education programs and business–education partnerships to better provide a qualified workforce, accurate data on occupations, jobs, and skill requirements are needed. Although the federal (and other) databases provide an abundance of information on the energy and mining workforce, such as employment estimates and demographic information, the data currently available for addressing the energy and mining workforce are not sufficiently consistent, comprehensive and up-to-date for these rapidly evolving, technology-infused industries and they do not exist at a sufficient degree of granularity. It is critical to foster the collaboration of government data-gathering agencies with industry.

Recommendation 5:  The Department of Labor, through its Bureau of Labor Statistics, should determine and pursue a more effective way to partner with industry, through its national industry associations, to more quickly and accurately reflect the fast-paced change of job and occupation titles and characteristics, as well as the levels of education and training required in 21st century jobs.

Recommendation 6: The BLS should work with industry and the Departments of Education and Labor to better define the STEM technical workforce needed to support STEM professions in our economy so that appropriate and useful data can be identified, collected, and analyzed.

The U.S. Federal Workforce

Federal employees have a critical role in, and impact on, the success of the U.S. energy and mining industries. Federal employees are involved in all aspects of the energy and extractive industries and they link industry’s ability to produce energy and minerals with society’s concerns about these industries. However, the nature of the workforce situation in the federal sector for energy and mining is serious. MSHA projections, for example, indicate that 46% of their coal-sector workforce will be eligible to retire within five years, and they expect to lose 40% of their metal/nonmetal workforce in the same period. Other federal agencies are facing similar conditions. Federal agencies involved in the energy and extractive industries have an acute need to replace departing federal workers, but because of the restrictive personnel processes that federal agencies must follow and the relatively higher compensation offered by industry, it is difficult for federal agencies to hire and retain the employees they need.

Recommendation 7: All involved federal agencies should review and revise recruitment, training, and employment arrangements for federal employees directly involved in minerals and energy policy, permitting, and production oversight to ensure the agencies’ ability to attract and retain qualified federal workers. Industries involved in energy production and resource extraction should develop collaborative efforts to partner with government at all levels to develop solutions to the problem of recruiting and retaining quality public-sector employees.



  1. National Research Council, Emerging Workforce Trends in the U.S. Energy and Mining Industries: A Call to Action, 2013, National Academies Press, www.nap.edu/catalog.php?record_id=18250, (accessed 26 June 2013).
  2. Energy Information Administration, Annual Energy Outlook 2013 Early Release Overview, 2013, Fig. 7, p. 8.
  3. Energy Information Administration, Annual Energy Outlook 2012 with Projections to 2035, DOE/EIA-0383(2012), 2012, Fig. 73, p. 76.
  4. GeoFORCE Texas, www.jsg.utexas.edu/geoforce/, (accessed 26 June 2013).
  5. GeoFORCE Alaska, www.uaf.edu/rahi/geoforce-alaska/, (accessed 26 June 2013).
  6. AfricaArray, www.africaarray.psu.edu/, (accessed 26 June 2013).
  7. NSF Advanced Technological Education Centers, atecenters.org/#t-slide-one, (accessed 26 June 2013).
  8. Center for Energy Workforce Development, Energy Industry Competency Model: Generation, Transmission and Distribution, 2010, www.cewd.org/curriculum/downloads/Energy%20Competency%20Model%20September%202010.pdf, (accessed 26 June 2013).
  9. National Research Council, Emerging Workforce Trends in the U.S. Energy and Mining Industries: A Call to Action, 2013, National Academies Press, Table B.20, p. 290.
  10. Mine Safety and Health Administration, Mine Injury and Worktime, Quarterly, January-December 2010, Final, 2011, Tables 1 and 5.
  11. Bureau of Labor Statistics, Employment Projections, Table 2.7: Employment and Output by Industry, www.bls.gov/emp/ep_table_207.htm, (accessed 29 July 2013).
  12. Energy Information Administration, Annual Energy Outlook 2012, Table and Graph: Employment and Shipments by Industry, and Income and Employment by Region, Reference Case, www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2012&subject=0-AEO2012&table=100-AEO2012&region=0-0&cases=ref2012-d020112c, (accessed 31 July 2013).
  13. Energy Information Administration, Annual Energy Outlook 2012 with Projections to 2035, DOE/EIA-0383(2012), 2012, Fig. 118, p. 98.
  14. National Research Council, Emerging Workforce Trends in the U.S. Energy and Mining Industries: A Call to Action, 2013, National Academies Press, Tables B.17 and B.19, pp. 287-288.
  15. Mine Safety and Health Administration, Mine Injury and Worktime, Quarterly, January-December 2010, Final, 2011, Tables 2 and 6.
  16. C.N. Brandon, Emerging Workforce Trends in the U.S. Mining Industry, Automated Systems Alliance Inc., for the SME, NMA, NSSGA, and IMA-NA, 2012, Society for Mining, Metallurgy and Exploration, Englewood, CO.
  17. M. Poulton, Analysis of the Mining Engineering Faculty Pipeline, Presentation at SME Annual Meeting, Seattle, WA, 20 February 2012.
  18. Mine Safety and Health Administration, Accident Prevention Alert, Safety Flyers, 2012, www.msha.gov/alerts/safetyflyers/APA22012Experience.pdf, (accessed 26 June 2013).
  19. K.A. Margolis, Underground Coal Mining Injury: A Look at How Age and Experience Relate to Days Lost from Work Following an Injury, Safety Science, 2010, 48 (4), 417–421.
  20. N. Ismail, J. Haight, Older Workers: Asset or Liability for Your Company? The Case Study of Metal and Nonmetal Mines, Proceedings of American Society of Safety Engineers Professional Development Conference, 13–16 June 2010, Baltimore, MD, Session #731.


The author can be reached at cy.butner@gmail.com.


The Future of the Energy Mix in the U.S.

The U.S. Energy Information Agency (EIA) recently released its Annual Energy Outlook for 2013 (AEO2013), which includes projections of the U.S. energy infrastructure in the near term and also through 2040. In the near term, the report suggests that rising natural gas prices will lead to coal recapturing some of the energy market that has been lost in recent years. The report included several scenarios for the energy mix in 2040, including a reference case, high cost of coal, low cost of coal, high oil and gas resource, and low oil and gas resource.

Future of the U.S. Energy Mix

Source: Reproduced from the EIA AEO2013 (www.eia.gov/forecasts/aeo)

In all scenarios coal was projected to play a major role in the energy mix. Coal-fired power plants as a percentage of total installed capacity were projected to decrease (both in terms of GW and as a percentage) from 2011. For the most favorable cases for coal demand in 2040 (the low coal cost and the low oil and gas resource) coal was projected to account for approximately 23.5% and 22.9% (290 GW and 283 GW), respectively, of installed capacity. However, the study tells a very different story when actual generation is examined. In the reference case, coal-based electricity was projected to grow by ~0.2% per year—meaning that even while the total installed capacity of coal-fired power plants was decreasing, the remaining plants will be increasing the total coal-based electricity output. In the reference case the average capacity factor for coal-fired power plants in 2040 was projected to be 78% (compared to approximately 57% in 2012). In the range of scenarios presented, the lowest average coal-power plant capacity factor was 69% in 2040 with a contribution of over 1300 billion kWh (just over 30% of the total energy generated).


The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.