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26 Jan 2018 00:00
Medupi (pictured) and Kusile coal-fired power stations are costing the taxpayer hundreds of billions to build, and will only start generating power in four years' time. (Photo: Tiksa Negeri/Reuters)
In a pre-World Economic Forum breakfast in Johannesburg last week, Finance Minister Malusi Gigaba announced that if we did not solve the challenges around Eskom then there would be no economy by the time our South African delegation returned from the World Economic Forum in Davos this week.
Eskom, South Africa’s electricity public utility, is due to publish its interim results at the end of the month, but the debt due to its Medupi and Kusile coal-fired power stations new-build programme is estimated at R350-billion of government guarantees that treasury has issued to Eskom. Already R275-billion of this R350-billion has been used, and Eskom still needs to borrow R60-billion per annum for the next four years to complete the programme.
To put that into perspective: the R350-billion required to build two new coal-fired power plants is R100-billion in excess of the entire annual gross domestic product in South Africa — a country with one of the highest solar energy potentials in the world.
As a green engineer, if there is a lesson we should have learnt during the rolling blackouts in 2008, it was that the need for solving the energy crisis in South Africa is a conversation that both the public and private sectors need to be a part of.
The Energy Trilemma
The World Energy Council’s definition of energy sustainability is based on three important goals — energy security, energy equity, and environmental sustainability. These three goals constitute a “trilemma”, entailing complex interwoven links between the public and private sectors, governments and regulators, economic and social factors, national resources, environmental concerns and individual behaviours.
Delivering policies that simultaneously address energy security, access to affordable energy services, and environmentally sensitive production and use of energy is one of the most formidable challenges facing government and industry. The “energy trilemma” provides a clear framework to deliver energy transformation and make sustainable energy systems a reality.
Based on this definition by the World Energy Council, it is clear that South Africa needs to facilitate more conversations between the public and private sectors to address the three goals of the energy trilemma. When I noticed the distinct correlation between energy and the economy, it inspired me to become a green engineer to address the energy crisis in South Africa.
Energy security, energy equity and environmental sustainability
The following observation was made by the private sector over the past decade, which still needs to be addressed. For a balance between energy security, energy equity and environmental sustainability, why is there still too much reliance on a (sometimes unstable) centralised electricity public utility, and on fossil fuel sources of energy in South Africa? I am not advocating that we do not use fossil fuels at all, as that can be unrealistic, with the economies of scale of our existing coal-fired power stations and the volume of coal reserves at our disposal as a country. What I am advocating, however, is that South Africa needs to have a more balanced energy mix that capitalises on the sources of energy at our disposal.
I was fortunate to visit and be a part of the conversations around energy sustainability from 2013 onwards in Kenya. Electricity supply capacity in Kenya is predominantly sourced from hydropower (38%), fossil fuels (33%), geothermal (27%) and other sources (2%), while electricity supply capacity in South Africa is predominantly sourced from fossil fuels (92%), hydropower (4%) and nuclear (4%). If we contrast Kenya’s proportionate energy mix to that of South Africa, it’s a little frightening how dependent our economy is on one source of energy, and how R350-billion is being invested to make us even more dependent on fossil fuels over the next few years, instead of diversifying the risk.
I believe that an Index of Sustainable Economic Welfare should be supplementary to that of the Gross Domestic Product, because of the exponential negative effect that natural resource scarcity can have on an economy. Sometimes we neglect to understand the significance of green buildings and sustainability when there is an abundance of natural resources, and neglect to make provision for when the resource is depleted — and if you don’t believe me, ask Cape Town about its water crisis.
The Integrated Resource Plan 2010-2030 sketches a path for South Africa’s long-term energy future, including diversifying our sources of electricity to fossil fuels (57%), renewable energy (26%), nuclear (13%) and hydropower (3%), but is the public sector really committed to creating an enabling environment for the additional sources of energy? If so, why are we still unable to feed excess renewable energy generated by commercial and residential units back into the grid in Johannesburg, for instance?
As a green engineer, I have worked with private sector teams who understand this significance of an energy mix within their own precincts, and have now resorted to establishing micro-grids within their own properties and precincts while we wait for all metropoles in South Africa to allow the private sector to go net zero or net positive.
Energy security, energy equity and environmental sustainability is not only about capacity, but about long-term diversity of energy sources. There is currently no significantly enabling environment for independent power producers, renewable energy independent power producers or for private sector infrastructure with enough roof space to power a precinct.
Keeping the lights on
By not addressing the energy trilemma as defined by the World Energy Council, we will struggle to create solutions that integrate all aspects of energy in South Africa.
Without public and private sector conversations to discuss the creation of an enabling environment so that the private sector can take the load off the public sector to ensure energy security, energy equity and environmental sustainability, we will struggle to rise above the energy crisis in South Africa.
The conversations that are happening with the Coega Development Zone in the Eastern Cape on addressing the energy dilemma give me hope. Without open and objective discussions about energy in South Africa and the distinct effect that the price, provision and environmental impact of energy has on the economy, every single one of us will struggle to keep our lights on leading up to 2030.
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