A battle of ideas over SA energy plans sparks fierce debate

The future of South Africa’s energy sector development and security has sparked a battle of ideas over big infrastructure like coal and nuclear versus nimble power producers of solar, wind and gas energy. Fin24’s Matthew le Cordeur unpacks.

Eskom appears to be waging a battle of ideas over the future of South Africa’s energy resources, with Eskom executives often pitting the power utility against respected energy thought leaders like EE Publishers MD Chris Yelland and UCT professor Anton Eberhard.

The context of this battle comes amid five major developments in the energy sector:

1. Coal: Eskom’s baseload coal power stations that deliver most of South Africa’s electricity will slowly come off line in the next few decades, eventually leaving the delayed Medupi and Kusile power plants – and other midlife stations – as the main producers of coal-based energy. Coal is losing steam amid UN resolutions that will punish CO2 intensive South Africa if it does not reduce its emissions.

2. Nuclear: South Africa has two nuclear reactors at Koeberg (1.8GW), but government and Eskom want to add another six to eight reactors (9.6 GW) in the Eastern Cape and/or near Koeberg. While proponents believe this will solve the baseload replacement problem with non-CO2 emitting power, economists believe the cheap-dream that nuclear once promised has soured, while environmentalists continue their protests regarding radioactive waste and spillage caused by accidents.

3. Renewable Energy: The darling of the private sector, economists and environmentalists, South Africa’s renewable energy programme has brought R195bn in direct investment in the last decade and added 2 145 MW to the grid. Eskom has been forced by the Department of Energy (DoE) to sign long-term contracts with these independent power producers and has now put its foot down, saying it won’t accept any new project without its say-so. The DoE has set the target for renewable energy at 3 725 MW, so Eskom’s decision will be fiercely contested.

4. Gas: The DoE’s draft Gas Utilisation Master Plan and ministerial determination to date is 3 126 MW of baseload and/or mid-merit energy generation capacity from gas-fired power generation. This target could increase, according to the minister of DoE. SA is creating a unit to import liquefied natural gas for power plants and will seek to tap regional natural gas. Major gas discoveries in Mozambique have added fuel to the gas-ignited fire, while prospecting for fracking (another source of gas reserves) in various parts of South Africa is receiving stiff opposition from civil society groups and is a longer-term option depending on the economics. READ: Will gas be SA’s saviour?

5. Hydropower: The World Bank announced on Tuesday that it was suspending its funding for the Democratic Republic of Congo’s $14bn Inga 3 project, which forms part of the eight-stage Grand Inga project that would produce a record 44 GW at an estimated cost of $50bn to $80bn. Eskom is supposed to be a major anchor for this project. Experts like Yelland see this is a “wonderful pipe dream”.

Read full story: Fin24