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Despite protestations by thousands of South Africans, our ANC-led government seems determined to spend over R1 trillion on a nuclear fleet, including a uranium enrichment plant, a fuel assembly plant, a reprocessing plant and a high-level waste management facility.
How has this impossibly expensive project been motivated and by whom?
Before the Integrated Resource Plan (the IRP2010) was finally promulgated, Eskom’s position was presented at the public meetings which were held along the coast to review the first draft of the Environmental Impact Report for “Nuclear-1” in March-April 2010.
During these meetings, Eskom presented a “Project Motivation” at Slide 7 in their presentation as follows:
l Increasing demand for electricity (> 4 percent growth per annum).
l Projected requirement for more than 40 000MW of new electricity-generating capacity over the next 20 years.
l In SA only coal and nuclear power are solutions for base load generation.
This first notion of a “four percent per annum” growth in electricity demand was explained on September 25, 2007 at an “Energy Summit” to which only the select few were invited.
Eskom’s Kannan Lakmeeharan suggested at Slide 3 of his presentation that due to economic growth and the government’s policy, ‘Accelerated and Shared Growth Initiative for South Africa’ (AsgiSA), it calculated that the load will grow at an aggregated value of 4 percent per annum from the current load of 34 807MW in 2007 to 93 776GW in 2030.
This view was reinforced by the then director-general for the Department of Public Enterprises, Portia Molefe, who showed at her Slide 25 that the “electricity growth [was] revised from 2.3 percent to 4 percent to align with AsgiSA 6 percent GDP growth target”. In other words, Eskom’s own assumptions were based not on a careful extrapolation of actual, empirical evidence, but the imperatives of a devoutly wished-for macro-economic policy.
Molefe then depicted in Slide 29 a projected consumption in 2011 (a mere four years down the track) of 42 895 MW, an increase of nearly 20 percent over four years, or roughly five percent per annum.
Sad to relate, however, that in his media statement of August 2011 Eskom chief executive Brian Dames stated that electricity demand growth over the period was about 1.4 percent year on year, below Eskom’s 2 percent growth forecast for the full year. (Eskom, 2011)
According to the Business Report of July 6, 2012, moreover, the peak demand was forecast for 34 105MW – or 256MW below the stated figure for 2007.
Thus there has been no growth in electricity demand over the last four years, thanks to non-existent economic growth and disinvestment, massive electricity price hikes, and a natural drive for conservation and energy efficiency.
The task of projecting GDP growth is difficult and decisions on growth rates are often politically biased, as governments would like to project a continuously high GDP growth when, in fact, this is unlikely to occur.
GDP growth is seldom, if ever, exponential over a long period of time; however, this is how GDP has been modelled in South Africa in the past (NER 2004a; IEP 2003). If one examines other developed regions of the world, it is easy to see that GDP growth increases, reaches a peak and then declines. (Haw & Hughes, 2007)
At the beginning of the public consultation process leading up to the IRP2010, the following table was provided by the Department of Energy, with input from the National Treasury [IRP 2010 Input Parameter Data Sheet D2 (Demand input): Gross Domestic Product (GDP)]:
Note that the figures above for 2009 are actual, while on October 28, 2010, Finance Minister Pravin Gordhan revised the forecast for 2010 as 3.0 percent, projecting 3.5 in 2011, 4.1 in 2012, and 4.4 in 2013 – a wildly hopeful trajectory.
The forecast for 2012, for example, was given as 2.7 percent (Business Report, May 20, 2012), which is a long way from AsgiSA’s 6 percent.
More importantly for electricity planning purposes, Arjun Makhijani in the US has shown conclusively that, despite real growth in the US economy over 50 years, energy growth remained fairly constant.
Even with a resumption of energy growth since the mid-1980s, the business-as-usual picture does not resemble the pre-1973 picture:
l Industrial energy use stayed about the same between 1973 and 2004, but the value of industrial production has more than doubled.
l The ratio of energy demand growth to GDP growth has declined from about 0.9 in the mid-1950s-1973 period to about 0.5 by the year 2000... As in the 1973-1985 period, this increase in efficiency has been driven partly by price and partly by regulations.
In effect, “business-as-usual” in the industrial sector has meant economic growth without energy growth for over three decades.
A part of this may be due to the migration of energy-intensive industries to countries with cheaper energy supplies. But a central factor has been an increase in efficiency of energy use in industry. (Makhijani, 2007:6)
The very concept of a “base load, moreover, has been shown to be a fallacy”. (Diesendorf, 2007).
At page 43 of the Department of Energy’s very own Integrated Resource Plan for Electricity 2010-2030, (March 2011) a perfectly workable plan is given with a mix of wind, solar PV, gas, and Concentrated Solar Power (CSP), enough for just under 60GW of power, as opposed to the current 2012 capacity of roughly 40GW. So, even the department’s own projections allow for a perfectly workable and affordable plan without nuclear power.
A lower figure of 60GW (as opposed to the falsely projected figure of 80MW) is in perfect accord with the projections of the independent Energy Research Centre at the University of Cape Town (Winkler et al, 2007: 34, fig.11).
Furthermore, Roula Inglesi (2010) has demonstrated conclusively that higher electricity prices will stimulate greater energy efficiencies and electricity savings through, for example, co-generation (or waste-heat usage), so much so that a 27 percent drop in demand may be achieved even with a 4 percent growth in the economy.
Even the mining companies have expressed intentions to provide their own sources of power, while the government’s expressed policy of allowing for 30 percent participation by Independent Power Producers (none of whom favour nuclear power production) will also prove a decisive factor.
Is it not thus now true to say that the heady projections for 2007 are redundant and that the IRP2010 has to be completely overhauled to exclude nuclear power, since we have both Medupi and Kusile coming on stream and a raft of exciting renewable projects?
It is in this era, where rational planning policies are over-determined by secret deals, that Andrew Taylor’s comments in the London Financial Times of 2001 remain instructive:
“Nuclear generation will remain uneconomic unless electricity prices rise or it receives state financial help, according to forecasts compiled by the government’s energy review team.
We therefore support the WWF call for a thorough overall of the IRP2010 in the light of reality after the crash of 2008. Given:
1. The discovery of gas off the East African coastline.
2. The commitment to developing Inga in the DRC.
3. The commissioning of Medupi, Ingula and Kusile, and
4. The massive, world-wide commitment and funding for renewables.
Such a review must inevitably exclude a nuclear fleet for South Africa.
Bibliography Mark Diesendorf, The Base Load Fallacy, 2007 www.energyscience.org.au Eskom, 2011 http://www.eskom.co.za/c/article/743/media-statement-25-august-2011/ Grubler, Arnulf 2010. The costs of the French nuclear scale-up: A case of negative learning by doing. Energy Policy 38, pp. 5174-5188 Mary Haw & Alison Hughes, 2007: Clean Energy and Development for South Africa: Background data, Report 1 of 3, Energy Research Centre, UCT, & British High Commission, 28 February Inglesi, Roula, 2010. “Aggregate electricity demand in South Africa: Conditional forecasts to 2030, Applied Energy 87:197-204 Arjun Makhijani, 2007: Carbon-Free and Nuclear-Free: A Roadmap for U.S. Energy Policy, Published jointly by IEER Press, Takoma Park, Maryland and RDR Books, Muskegon, Michigan, August Andrew Taylor, 2001: “Warning over cost of nuclear power generation” Financial Times 3 October Winkler, Harald et al, 2007. Electricity Supply Options, Sustainable Development and Climate Change Options: Case studies for South Africa, published by the UNEP Riso Centre in Denmark, September.
Mike Kantey is the director at Watercourse cc