Gwede Mantashe, the minerals resources and energy minister.
Gwede Mantashe, the minister of mineral resources and energy, said the government was not honest about the price tag of renewable energy on Eskom’s bank balance.
“Renewable energy costs Eskom more money than the government lets on, which is why I do not think it is the best solution for Eskom,” he said.
Mantashe was responding to questions about why he did not support renewable energy at the Africa Energy Indaba on Monday.
Mantashe said that if Eskom sells power for 85 cents and buys power for R5.25 it is making a loss rather than a profit
He added that Eskom was being charged more than usual and that this could be seen in the bid windows.
Bid windows are aimed at bringing additional megawatts to the country’s electricity system through private sector investment in wind, solar, biomass and small hydro electricity.
“Bid window two charged the utility R2 per kilowatt, whereas Bid Window one charged the utility R4 per kilowatt and it was unfair for the utility to continue being overcharged by the independent power producers.”
Mantashe said that Eskom’s bank balance fell victim to economic pressure to attract investment by introducing renewable energy from an international perspective and moving to cleaner energy.
Mantashe said Eskom was better suited to get power from “neighbouring countries, Karpowerships and adapting to the use of gas than renewable energy”.
The department of forestry, fisheries and the environment has pushed to decline Karpowership’s appeal to provide the country with 1 200 megawatts, despite being the preferred bidder in Bid Window 5.
Bloomberg reported that “The department of forestry, fisheries and the environment has rejected the appeal to moor a ship-mounted power plant capable of generating about 450 megawatts at the Coega harbour in the Eastern Cape province, the person [with knowledge of the matter] said.
“Decisions on plants planned at the Saldanha and Richards Bay harbours have yet to be communicated to the company, the person said, asking not be identified because the government hasn’t made the information public.”
In 2021, the utility released an investment plan in which it will spend R61.75 billion on wind power and R44.25 billion on solar energy by the end of the decade. Some of the projects are planned on the sites of coal-fired plants that are scheduled to close.
Eskom works with the mineral resources and energy department to buy power from independent power producers who bid to provide more power to the country’s grid.
Hold on to fossils
High-ranking officials in the African Union as well as energy ministers from several African countries used the African Energy Indaba in Cape Town to promote a common position, calling for more investment in fossil fuel, local resources and the use of gas over renewables to alleviate the energy crunch on the continent.
Following Mantashe’s keynote address to embrace the use of gas mixed with renewable energy, African leaders have taken the stance to hang on to fossil fuels to fortify their energy grids before moving to cleaner energy sources.
Mantashe said energy production in Africa must be aligned with Africa’s socio-economic development.
“It is pleasing that Africa is uniting on a principle that the energy transition must be people centred, take into consideration the socio-economic conditions of communities that will be affected, and take into consideration Africa’s developmental needs,” he said
Mantashe said a consensus last year at the Conference of the Parties to the United Nations Framework Convention on Climate Change Cop27 resulted in a resolution to phase down on coal power instead of an abrupt end, which countries argue will leave them in an energy crunch.
Push for renewables
Speaking during a panel discussion on the energy transition in Africa, Ademola Ogunbanjo, executive vice-president of Oando Clean Energy, said although renewable energy was touted to be the best form of energy, it is expensive for Africa.
He added that Egypt and South Africa had an upper hand in access to renewable energy equipment but the rest of Africa has been struggling with getting finance to move away from fossil fuels.
Breatrice Nyambira, of IKM Advocates, said access to equipment to expand renewable power to the grid in Africa was difficult, highlighting that more money needs to come in.
She said that unlike Europe, Africa has many power grids that are not connected, which will make it difficult for the continent to get to cleaner energy faster.
Nyambira added that countries need to consider their tariffs and policies and make the prices of installation less to make renewables attractive.
David Chen, the owner of One Power, said renewable energy should be seen as a tool to empower people to move away from any power grid.
He added that Africans need to take the opportunity to develop the continent with the minerals they have. He urged Africans to learn from the foreign experts and fight to get skill transfer so they can do it themselves.
Johan Groenewald, a member of Lesedi Nuclear Services said although residents cannot see the change yet, prices for renewables are decreasing.
Mandisa Nyathi is a climate reporting fellow, funded by the Open Society Foundation for South Africa