Financial

Renewables debate rages as Eskom woes deepen

Read time 5min 30sec
Financially-constrained Eskom is implementing stage four rotational load-shedding.
Financially-constrained Eskom is implementing stage four rotational load-shedding.

The debate as to whether renewable energy is cheaper than fossil fuels has been ignited again, as power utility Eskom struggles to keep the lights on.

Financially-constrained Eskom, which supplies about 90% of SA's power, is currently implementing stage four rotational load-shedding.

In a statement issued yesterday, Eskom said: "Stage four load-shedding will be implemented on Wednesday, 20 March 2019 from 09h00 to 23h00. This is due to a shortage of capacity."

As the challenges at Eskom persist, SA has been making steady progress in incorporating renewables into the country's energy mix.

In 2030, the South African government envisages the energy mix will consist of 34 000MW of coal, representing 46% of installed capacity; 11 930MW of gas, or 16% of installed capacity; 11 442MW of wind, or 15% of installed capacity; 7 958MW of photovoltaic (PV, or solar); and 4 696MW of hydropower, or 6% of installed capacity.

This was stipulated in the country's Integrated Resource Plan (IRP) 2018, a 20-year energy roadmap to meet SA's future power needs.

Two-front calamity

However, this move towards renewables has not been welcomed by some sectors, including those who are backing coal and nuclear.

Andrew Kenny, an independent energy consultant, is against the move to renewables.

He points out that SA faces energy calamity on two fronts. "First is the disaster of Eskom. Second, and potentially worse, is the disaster of the Renewable Energy Independent Power Producers' Procurement Programme and our lunatic IRP 2018."

According to Kenny, this is the mandatory plan laid down by the Department of Energy for SA's electricity supply until 2030. What it calls the "least-cost" option is in fact the most expensive possible option: a mix of wind, solar and imported gas, he comments.

"If implemented, it would shut down the South African economy," says Kenny.

He notes that a very similar plan was implemented in South Australia and shows SA what to expect in the real world.

"Driven by green ideology, South Australia shut down coal stations, which had been providing cheap, reliable electricity, and built a lot of wind turbines and some solar power. Australia, unlike us, has an abundance of cheap gas."

Kenny notes the result was soaring electricity prices to final customers and two total state black-outs.

"At one point in July 2016, the price of electricity reached $14/kWh (AU). This is R140/kWh. The IRP's 'least-cost' option resulted in electricity prices at one point being over 150 times Eskom's average selling price."

He adds that nature has made wind and solar inherently useless for grid electricity supply (although excellent off-grid).

"The sun doesn't shine strongly most of the time and not at all when most needed, on winter evenings. The wind blows in an intermittent, erratic and unpredictable way. A kWh of solar electricity has low value, wind no value at all - or even negative value.

"In a free market for grid electricity, nobody would buy any wind or solar. They have to be forced to buy it. The state has to command the system operator (Eskom in our case) to buy their awful electricity."

Nuclear link

However, Richard Halsey, a member of environmental body Project 90 by 2030, is not buying Kenny's arguments, saying he is a well-known nuclear proponent.

"Andrew Kenny has been associated over the years with Nuclear Africa, and one of their sponsors is Rosatom, who were the main contender for providing the nuclear fleet that was pushed so hard for in the Zuma era," says Halsey.

"In short, the CSIR, Energy Research Centre at UCT and even the Department of Energy's modelling team show that unconstrained renewables give the least-cost option in terms of energy planning to 2030 and beyond," he adds.

The CSIR points out it's beyond any scientific doubt that a renewables-led energy system is technically feasible, and recent technology cost developments for solar and wind have now made it economically viable too.

A recent comparative analysis of the cost of electricity generated from various supply sources in South Africa by the CSIR shows new solar photovoltaic and onshore wind to be 40% cheaper than the costs associated with new baseload coal-fired power stations.

The analysis, conducted by CSIR, is based on information confirmed by the Independent Power Producer (IPP) Office, which oversees the procurement of new private generation capacity on behalf of the Department of Energy and National Treasury.

Another US study comparing the costs of energy from various generation technologies indicates that an "inflection point" has been reached where, in some cases, it is more cost-effective to build and operate new renewable-energy projects than to maintain existing conventional generation plants.

All options

Meanwhile, energy minister Jeff Radebe has said SA should consider all energy sources available in its future energy plans.

"During the energy planning process, we therefore cannot discriminate against or favour any particular energy carriers," said Radebe.

He noted the country cannot ignore the fact that SA is endowed with abundant coal reserves that come at a cheap price.

"However, this is counter-balanced by the high carbon content that coal has, and this cost has been internalised when we analysed policy options where emissions reduction targets and carbon taxes are introduced.

"We have to consider nuclear, and despite its high capital costs, we have not lost sight of the fact that this is a clean energy source that can contribute optimally for electricity generation. We have to consider hydro as well, particularly with respect to Cahora Bassa in Mozambique and [Grand] Inga in the DRC," said the minister.

He added the Department of Energy has sent out strong signals with regards to the role renewable energy technology should play in SA's energy mix.

Through the Renewable Energy Independent Power programme, the department has successfully implemented bidding rounds to which the response has been positive, he noted.

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