We are driven by desperation to consider alternatives for sustainable energy sources rather than being proactive and acting strategically to optimise outcomes, writes Nkosinathi Solomon.
Johannesburg - The raging debate over the suitability of nuclear energy is typical of South Africa’s flawed approach to energy policy. We are driven by desperation to consider alternatives rather than being proactive and acting strategically to optimise outcomes.
The Eskom debacle has forced the government to consider other options such as gas in addition to nuclear – just like the sale of state assets is driven by the need to bail out Eskom rather than economic policy. Invariably, we ask the wrong questions and then proceed to provide the most precise answers to them.
The strategic energy policy question is not whether nuclear energy is better than renewable energy or vice versa. The question is: what is the optimal energy mix for South Africa that will best address our economic development challenges? Any optimisation problem relies on the formulation of the objective function and the constraints imposed on it. While some are fuzzy on the objective function, they seem clear that we can either have nuclear, wind or solar, and nothing else.
My argument is that there are other alternatives to be considered in the energy mix. Firstly, the strategic envelope for the analysis of our energy policy should be the Southern African Development Community (SADC), not the Republic of South Africa, given that there are significant energy sources outside South Africa, with South Africa being a massive energy sink. The DRC has hydro energy resources, Botswana has coal resources, Mozambique and, to a lesser extent, Namibia have significant natural gas resources. It is also unclear why our own coal resources are not in the future energy mix, given our relative size to massive coal burners such as China and India.
Back to the objective function: what do we want to achieve through our energy policy? The goals of an energy policy should include competitively priced energy, energy security, supply stability, minimal environmental impact, employment creation, and positive transformative impact on the overall economy. One could use the current energy mix as a base case to compare alternative mix options, including all the energy sources mentioned above.
We have not even considered importing Liquefied Natural Gas (LNG) as an alternative or local hydraulic fracking. We could divert all our thermal energy demand to LNG and simultaneously use LNG to provide feedstock to the PetroSA GTL plant. That would reduce our electricity demand and also make sure we sweat an existing investment at the Mossgas plant.
At face value, it seems a nuclear plant investment will have less positive transformative effect on the overall economy.
We need a breadth of fresh air in this energy policy debate. This is too important an issue for South Africa’s future to be driven by sector specific interests.
* Solomon is executive director at Augusta Transaction Advisory in Sandton.
** The views expressed here are not necessarily those of Independent Media.
The Sunday Independent