New coal fired power plants that are commissioned for South Africa under the independent power producer (IPP) initiative will add billions to the country’s power bill over the course of their lifetime, and force cheaper and cleaner renewable-energy alternatives out of the system.
This claim is made in a report titled ‘An assessment of new coal plants in South Africa’s electricity future’ compiled Jesse Burton and Gregory Ireland from the the University of Cape Town’s Energy Research Centre.
A statement announcing findings of the study says it was aimed at quantifying the effects of the inclusion of the coal IPP in South Africa’s electricity system over the period from 2022 to 2052.
The study looked at the relationship between energy systems, development pathways and the economy, said Burton. It focused on two planned coal plants, Thabametsi in Limpopo and Khanyisa in Mpumalanga.
It determined that the plants will cost the country an additional R19.68 billion in present value terms over their lifetimes, compared to an optimal and least-cost energy system that combines wind, solar and gas.
Thabametsi and Khanyisa are the preferred bidders within the first bid window of the coal-baseload IPP procurement programme, and are required to begin operating by December 2021. The two coal plants followed from the Integrated Resource Plan (IRP) of 2010.
Te report notes that the world has changed significantly since the IRP was gazetted in 2011, with renewable energy prices having decreased by up to 90%. “It’s a completely different ball game. And we know how much these two coal plants are going to cost, because they had to bid into a process. So, you can see that even current renewables are already 40% cheaper than these two new coal plants. But given the IRP of 2010, the Minister of Environmental Affairs is still pushing ahead with these two plants,” said Burton.
Ireland adds: “We know for a fact, no matter how you roll the dice for this, it is going to cost us more. It’s going to have extra, unnecessary emissions, and we need to take that into account.”
The statement notes that at the time the current IRP was gazetted, the two IPPs were declared to be ‘clean coal’ – with lower carbon dioxide (CO2) emissions than many Eskom’s other plants. But a landmark court case that questioned the environmental impact of the Thabametsi power plant resulted in a judge ordering a climate change impact assessment for the station.
The statement adds that the assessment revealed the presence of other, more potent greenhouse gases in the mix, including nitrous oxide (N2O), which is roughly 300 times more powerful per unit of volume than CO2. In the team’s reference scenario, the two plants contributed an additional 200 million tonnes of emissions during their lifetime.
“The study has shown that the planned IPPs are not necessary. Where the IRP of 2010 expected electricity demand to grow rapidly, demand has remained constant over the past 10 years. In fact, the country already has surplus electricity.
“These two plants are supposed to be signed into operation for 30 years, with a fixed power purchase agreement in place. This would mean that Eskom would be forced to purchase a set amount of power from the IPPs, instead of selling power from its already underutilised fleet. Such a scenario would be disastrous for the company, which is already in dire financial straits. It also means that South Africa’s already costly electricity would increase in price.”
This report is obviously one sided. We will try and get the other side of the story which we could not get before publishing.