New power plan jeopardises electricity access for poor

Now the Mail & Guardian tells us that President Jacob Zuma is pushing ahead with plans for nuclear plants, “despite uncertainty about the affordability of nuclear energy and the availability of sufficient expertise”.

Eskom told the National Energy Regulator of South Africa that it “need[s] to recover the cost of producing electricity, which includes operating costs as well as the costs of financing new capacity,” through its tariffs. An extremely expensive nuclear programme could seriously jeopardise the crucial social investment of providing electricity.

When you consider that the poorest households spend 32% of their income on electricity, housing, water, gas and other fuels (excluding transport), turning on the lights becomes an expensive option.

Zuma’s enthusiasm for expensive nuclear power is extremely bad news. According to Eskom’s third multiyear price determination application, expenditure beyond R1-trillion can be expected.

This is without financing costs and construction delays.
When new nuclear power finally comes online by 2030 or later, electricity from all renewable sources will be cheaper.

Eskom’s expansion plans are outlined in the department of energy’s integrated resource plan 2010-2030 (IRP2010).

A civil society coalition called the Electricity Governance Initiative of South Africa, formed to comment on the government’s energy policy, recently published its new smart electricity planning report.

This finds that new nuclear and coal-fired power plants beyond Medupi and Kusile are unnecessary.

It is an important finding, and one that the coalition wishes the government would heed.

The report finds that the IRP2010 is built on “inflated electricity demand projections … that will result in expensive infrastructure investment which will push up the cost of electricity, impacting the whole economy and further marginalising the poor”.

The report’s authors believe that the IRP2010’s calculations are incorrect. The current trend for the growth in demand is far below the plan’s assumptions. Last year, demand dropped by 2.6% (compared with 2011) and was more than 10% below the forecast.

And the number one demand driver — economic growth — is lower than expected, worldwide and in South Africa.

The power generation capacity that the IRP2010 plans for 2030, including Medupi and Kusile, will add 55GW and will result in a total installed capacity of 89GW — almost double the current capacity of 45GW.

The initial IRP2010 model excluded nuclear energy for being too expensive. However, the department of energy reintroduced nuclear through its policy-adjusted plan.

In January, Eskom said the capital expenditure for its proposed 9.6GW nuclear project would be R914-billion. The IRP2010 plan dooms us to further price increases and continued degradation of the environment.

But the coalition report shows how sufficient and reliable elec- tricity could be provided without new coal and nuclear — electricity conservation and efficiency can reduce demand by 16% across the residential, commercial, mining and industrial sectors by 2030.

If efficiency and demand-side measures were more aggressive than prescribed in the voluntary targets of the energy efficiency strategy, demand could be reduced by 27% by 2030 without constraining sustainable development.

Investing in our plentiful renewable energy potential will encourage economic growth, create sustainable jobs to replace fossil-fuel-based jobs, and have positive knock-on effects for the poor, especially in rural areas.

Direct and associated coal, nuclear and other fossil fuel costs continue to rise, while solar and wind costs continue to drop.

For example, the price of solar photovoltaics (PV) dropped 40% from R2.75/kWh to R1.65/kWh between the time of the first and second bidding window of the renewable energy procurement programme.

Concentrated solar power dropped 6.34% from R2.68/kWh to R2.51/kWh and wind dropped 22% from R1.14/kWh to R0.89/kWh.

The report argues that South Africa could support the widespread deployment of renewable energy generation. Peak residential demand can be reduced by shifting demand to daytime and by increasing the load factor of rooftop solar PV through battery storage solutions.

Hydro-pumped storage and natural gas will ensure sufficient reliability of South Africa’s electricity supply to power sustainable development.

Smart electricity planning doesn’t require mega-projects but advocates ambitious energy efficiency, demand-side management and decentralised electricity generation, including own- and co-generation in all sectors.

Through smart planning and a move away from energy-intensive economic sectors, South Africa can decouple electricity demand from economic growth.

This will enable us to replace coal, fossil fuel-based and nuclear power plants as they retire with renewable energy technologies.

Robert Fischer is one of the authors of the smart electricity planning report produced by the ­Electricity Governance Initiative of South Africa

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