THE South African Renewable Energy Council (Sarec) and other independent energy bodies say Eskom is attempting to mislead and deceive the public to serve its bid for nuclear power by distorting the facts associated with the cost of renewable energy.
In a statement last week, Eskom acknowledged the positive role played by the renewable energy programme in the reduction of load shedding and, in turn, the benefit to the SA economy. From January to December 2016, Eskom purchased 6.0 TWh of renewable energy from solar PV and wind.
Eskom calculated the total financial benefits amounted to R3.2 billion.
However, this was offset against the renewable energy tariff cost of R12.2bn, resulting in a net loss of R9bn to the economy.
Sarec chairwoman Brenda Martin said: “By taking a short-term view, Eskom has deliberately distorted tariff effects. The government’s decision to invest in a renewable power purchase programme stands to benefit the country’s economy in the long term”.
The Council for Scientific and Industrial Research (CSIR) issued a statement earlier this month saying that the real value of the projects arising from the first three bid window lies in the cost reductions achieved for solar PV and wind to 62c/kWh, which is 40 percent cheaper than new coal.
These reductions would not have been possible in the absence of the competitive bidding associated with the Renewable Energy Independent Power Producer Procurement Programme, Sarec says.
In addition to a significant tariff decline over the past four years, in 2016 renewable power plants produced roughly 6 TWh. Sarec says the entire bid window four solar PV and wind projects, for which Eskom’s signature under the PPAs is outstanding, will produce 9 TWh/yr.
This shows that for Round 4 projects, the country will be paying 45 percent less each year for 50 percent more energy, compared to the projects already operational.
“Any consideration of whether renewable power has cost or benefited the South African economy should look beyond short-term cost avoidance, to long-term benefit and proven cost reductions over time. For example, while the first three bid rounds of solar PV and wind have resulted in tariff payments of roughly R12bn in 2016, the fourth round of solar PV and wind projects will trigger tariff payments of merely R6.6bn per year,” added Martin.
Richard Halsey, of Cape Town-based environmental and climate change organisation Project 90 by 2030, said looking to the future and beyond vested interests it was easy to see that renewable energy was now the cheapest source of new build electricity, and getting cheaper, while coal was becoming more expensive financially, socially and environmentally.
“The initially high cost of wind and solar PV was necessary to bring us to a point where they are now the cheapest source of new build electricity. This high starting cost was required for creating a better long-term energy source – we are paying off the technology learning that will contribute to a more resilient economy in the future,” he said.
Eskom had not responded to queries by deadline.