Keeping the lights on in South Africa is a complicated business. I certainly am no expert, but I’ve managed to pick up a few facts along the way that would make the Average Joe more than a little concerned.
The most blinding fact that Eskom has not been able to wish away is that renewable energy is now the cheapest form of new power around. In November 2011, generating wind and solar power was prohibitively expensive, with solar costing R3.65 per kilowatt hour and wind power coming in at R1.51, according to CSIR data.
To put that in perspective, around that time – as far as I could determine from this government report – Eskom was charging its customers between 40 cents and 80 cents per kWh in 2011. VAT included, Eskom’s prices have now gone up to about R1.25 per kWh for residential customers.
In the years since 2011, though, much has changed. Wind and solar power now cost no more than 62 cents per kWh to produce in South Africa, and in other places it’s been coming in even cheaper. In Mexico, it’s now apparently as low as R0.49/kWh, in Dubai R0.42/kWh, in Chile R0.41/kWh and in Abu Dhabi it’s at an astonishing R0.34/kWh.
By contrast, the best modern coal-fired power stations Eskom is building, Medupi and Kusile, won’t manage to produce electricity at less than R1.05/kWh and R1.16/kWh, respectively.
According to the same source, nuclear power is estimated to come in at an even greater cost, R1.20 to R1.30 per kWh – which means massive further price increases for the end user, you and me.
And yet, Eskom has delayed – for two years now – the signing of the latest round of renewable power from independent power producers (IPPs). The 37 affected IPPs say this is illegal, and that if they went to court, Eskom would be obliged to sign and to buy their power.
Eskom is now complaining that renewable power is too expensive, though the parastatal seems to be relying on how expensive renewables were over the past few years – not what these power sources cost now and will cost in the future. Former chief executive (and Crybaby-in-Chief) Brian Molefe also tried to sell the anti-renewables idea by complaining that renewable power “just raises Eskom’s costs” because Eskom is forced to buy power from IPPs at the times of day when demand is low.
But an analyst has pointed out this “actually just highlights the inflexibility of coal-fired power stations, as these need to run all the time”.
Eskom bought renewable power from IPPs when it cost a fortune, mostly because it was desperate for any electricity it could get its hands on during the woeful era of load-shedding – and because it was duty-bound to add more environmentally friendly sources of power to its energy mix to appease a world reeling from the increasing horrors of global warming and climate change. Due to our historical reliance on cheap coal, South Africa produces some of the dirtiest electricity in the world, and obviously that needs to change.
Now, though, Eskom has a surplus of power and is no longer keen to have to sign on more IPPs. These independent producers provide competition and erode Eskom’s monopoly (and thus its profits and fat bonuses for executives). Secondly, Eskom really, really wants to procure a new nuclear build programme.
The IPPs are the single biggest threat to its case for nuclear power – not even the threat of nuclear meltdown and radiation is as big a problem.
As we all know, the prospect of nuclear in South Africa has become a bit of a swear word due to the clear association with the Guptas and Russia’s state-owned power company, Rosatom. Experts allege that building a new nuclear plant could cost our country even more than R1 trillion and place a burden of debt on us that generations of South Africans will struggle to pay off.
Morally and economically, investing in clean, affordable, quick-to-build renewable energy is the obvious no-brainer. But the more cynical among us would point out that because Eskom can’t control these projects at every step of the process, there’s no room to steal any money, put a friend into a deal, offer any families from Saxonwold ridiculously favourable coal purchase agreements or get gigantic kickbacks from Zuma’s friends in Russia.
Ultimately, we and the rest of the world need to turn to renewable power in a big way if we’re to stop runaway global warming and keep the temperature of the planet within human-friendly parameters. At the moment, most reputable scientists assure us, that isn’t the future we and our offspring are hurtling towards.
So perhaps that’s the biggest tragedy about how clean energy has entered into the very dirty environment that is South Africa: it doesn’t come with all that nice big juicy potential for corruption.
Put simply, clean energy is not dirty enough. The IPPs and the renewables programme has been hailed for its transparency and the fact that it’s had a net effect of adding R4 billion to the economy.
For the sake of the planet (and our poor, battered pockets every time we will buy a prepaid electricity voucher today and in the future), what a pity.
Perhaps it’s time to ask the people who make those wind turbines and solar power panels to up their corruption game.