SA needs right power mix

REUTERS

In her article, “No to nuclear power, NO!”, Anna Majavu revealed her own ideological agenda when she opportunistically launched an attack on the DA by falsely claiming that our only energy policy is to privatise Eskom, which, she states, will push up electricity prices.

The truth is that the DA has been outspoken on a number of issues relating to energy, including that of the government’s proposed nuclear build programme.

We have repeatedly indicated that we favour a responsible energy mix and certainly nothing in our approach has favoured the extraction of cheap coal at the opportunity costs of water and biodiversity loss.

It is disingenuous at best to assert that the only policy gun the DA has in mind is to privatise Eskom.

The starting point for the DA’s energy policy is that the current institutional framework governing all sectors of the electricity sector needs to be fundamentally overhauled.

Monopoly

The DA is indeed concerned, as all South Africans should be, with the extreme dominance of Eskom in the energy space.

Eskom has an almost complete monopoly on both the generation and transmission of energy in SA and it is their inefficiencies that are in part, responsible for driving up the electricity price in SA.

The Medupi coal-fired power station that they are building is coming in way over budget and could well turn out to be the most expensive coal- fired power station per megawatt that has ever been built in the world.

It would therefore be foolhardy for anyone to argue that Eskom should not be exposed to competition as many Independent Power Producers (IPPs) could provide new generation options at a far more affordable rate.

The DA also believes that energy-intensive companies should be allowed to contract directly with IPPs for their future energy needs, coupled with a requirement that a certain percentage is procured from renewable energy producers.

This approach would then ameliorate the current situation where all South Africans are being forced to take on the cost and risk of building new power stations that will mainly serve the energy needs of a few large energy-intensive companies (often at costs significantly lower than that which the average citizen is paying).

This cost and the risk is particularly acute when it comes to the government’s proposal to build six new nuclear reactors at cost estimates which range from R300 billion to over R1 trillion.

The global experience of building new nuclear power stations, especially that of Finland, strongly suggests that the final cost will certainly be closer to the R1 trillion mark.

The DA has therefore been at the forefront of this debate and we have used every means at our disposal to question the financial implications of the proposed nuclear build programme for our economy at large.

The DA is particularly concerned that we could land up in the catastrophic situation whereby the financing of these nuclear reactors could push up electricity prices to such an extent that the projected electricity demand for the next 20 years will not materialise as energy-intensive companies choose to expand their operations elsewhere in the world.

This could in turn lead to runaway electricity prices as more and more revenue is required to fund what will essentially be stranded assets.

In contrast, the DA would like to see a far more dynamic and decentralised energy sector in SA through which the building of new generation capacity can be more closely aligned to our energy demand.

This would necessarily involve the building of smaller- scale generation plants such as renewable energy technologies and gas turbines that can utilise the significant gas finds that have been made in countries like Mozambique, Angola and Tanzania.

Solution

We would also like to see all South Africans becoming part of our energy solution, by allowing for two-way metering where households are able to generate their own energy and sell it back to the grid as they do in Germany and many other parts of the world.

This would in turn provide opportunities for communities to set up small-scale renewable energy projects.

We firmly maintain that the current allocation of only 100 megawatts for such projects in the current energy plan is far too small.

The DA is also concerned that we have not taken advantage of the SA Renewable Initiative (Sari) that was launched to great fanfare at COP-17 last year.

The government has still not even set up a secretariat for this initiative, in which certain progressive developed countries have agreed to assist with the financing of the additional costs associated with renewable energy generation.

If we are going to be more ambitious about our current renewable energy targets, we are going to require assistance from the international community so as to ensure that the premium that we currently have to pay will not push up electricity prices even more.

The DA is also arguing for a national household energy strategy that can identify the most appropriate energy sources for specific household needs and then put in place the policies to allow for these sources to be adopted by poor households.

The DA certainly does not want to see a future of burning paraffin and wood as Majavu states, but one in which diverse energy sources such as liquefied petroleum gas, solar water heaters and photovoltaic panels can provide a bulwark against the rising electricity price.

For all of this to happen, though, the institutional framework which governs electricity needs to be opened up and freed from the dominance of Eskom.

If Majavu does not see that, then she is the one who is fixated on an outdated ideological position.

* Lance Greyling is a Member of Parliament and the DA’s energy spokesman.