Mini budget backs renewable energy

Picture: Dean Hutton

Picture: Dean Hutton

Published Oct 26, 2016

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Parliament - National Treasury on Wednesday appeared to contradict Eskom CEO Brian Molefe on the need for greater nuclear power capacity, during the medium-term-budget policy statement tabled by Finance Minister Pravin Gordhan.

It said new build plans should be in line with the Integrated Resource Plan, and that this blueprint should factor in the evidence suggesting that renewable energy was suitable for the baseload requirements of the country's power grid.

Molefe has refused to enter into new contracts with independent power producers (IPPs) beyond the current bid window and insisted that South Africa needed nuclear to boost its baseload capacity as renewable energy was too unreliable to serve this function.

"In addition, integrated resource planning should take into account the falling cost of renewables and their possible use in generating baseload electricity," Treasury said.

National Treasury noted that case studies conducted in Australia, Denmark, Portugal and Britain have found that it was feasible to meet energy demand, including baseload requirements, through renewable sources.

"Although wind and solar technologies generally provide power intermittently, this can be overcome by connecting geographically dispersed plants to the grid. Flexible technologies such as gas turbines can be used to fill in the gaps."

The department stressed that the Council for Scientific and Industrial Research had reached similar conclusions for South Africa.

National Treasury stated that the IPP programme would continue and be expanded to include private investment in coal and gas generation.

Molefe has repeatedly warned that South Africa would face another electricity crisis, characterised by blackouts, unless government proceeded with nuclear procurement imminently to allow new nuclear plants to come on line in about a decade. These are intended, according to plans that have the firm backing of President Jacob Zuma, to add an additonal 9,600 megawatt to the grid.

According to Molefe, nuclear plants would pay for themselves through tariffs as they had an expected lifespan of 80 years.

However, treasury warned of the cost of acquiring greater than needed capacity. "Idle electricity capacity will require higher electricity prices, with negative consequences for economic growth."

African News Agency

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