SA leading the way on renewable energy

File image of a solar installation.

File image of a solar installation.

Published Sep 14, 2016


One has to wonder what motivation the South African Nuclear Energy Corporation has in launching a smear campaign against renewable energy. Mr Kelvin Kemm's article Nuclear power is the only sensible way to go, which is more about renewable energy than nuclear energy, is riddled with so many untruths and fallacies that it cannot go unchallenged.

Firstly, Mr Kemm, like Mr Molefe, uses the price of a single Concentrated Solar Power ("CSP") project to claim that all renewable energy is expensive. CSP technology can store energy and dispatch on demand meaning its price should be compared to a peaking plant rather than a baseload facility. Peaking plants are commonly diesel powered open cycle turbines, the same ones which Eskom spent R11bn operating in 2014 to keep the lights on. Their cost per MWh are similar to that of CSP - not 5 times cheaper.

Rather than picking one project to suit his flawed argument, why does Mr Kemm not take the average of all renewable power tendered in the latest bidding round which would, I'm sure he would agree, be a more accurate way to compare renewable energy to other alternatives. If he had done so he surely would have realised many of his statements are nonsense. The IPP office recently confirmed in their March 31 2016 update ( found here), that the average price over all renewable technologies in the latest announced bidding round (including peaking CSP) is 77c per kWh, compared to Eskom's average selling price of 83c/kWh.

In Round 4.5, the winners of which have yet to be announced, the renewable energy price will fall even further. Recent auctions for renewable energy in Mexico and Dubai are producing prices of less than 50 SA cents per kWh.

Mr Kemm argues that we should use Koeberg's current energy output cost as a yardstick for the output costs of new projects. Has he no concept of the time value of money? It is completely irrelevant to consider the costs of a power station built 30 years ago when trying to determine the costs of NEW capacity. What should be compared is the equivalent costs of energy from a newly built nuclear power station; it would be useful if Mr Kemm could provide us with his organisation’s latest calculations. In the absence of those, let's take the recent nuclear power station at Hinkley Point C, expected to start construction in 2016 in the UK. This plant required the UK government to guarantee it a minimum price escalated by inflation (for 45 years) of £92.50/MWh (at today’s FX rate this is R1.73/kWh). This is the minimum price required to make the facility financially viable. That's right minimum price for the owner’s to break even, i.e. the actual price is likely to be significantly higher.

If this is indeed the case, Mr Kemm's question "is it good business to buy a commodity at more than you can sell it for?" would seem more appropriate to nuclear energy than renewable.

Mr Kemm claims "solar and wind people are not overcharging as much in later rounds as they were in the beginning" trying to insinuate the IPPs are profiteering at the expense of our citizens. Early procurement prices were high because risks were high; they were necessary to attract major energy participants to a completely untested market. With stability and long-term confidence has come increased competition and lower prices. It would be nonsensical to discontinue the programme when South Africa is about to reap the rewards of cheap energy after having invested in the initial rounds. It’s also irrational to reverse the long-term confidence and stability that have been created by disrupting the procurement process.

The final straw in Mr Kemm's article is the following statement: "Koeberg was built on time and within budget 40 years ago. There is no reason why South Africa cannot do it again."

Is he serious? I am quite certain that every South African with the slightest understanding of what is happening in our country at the moment can think of at least 10 reasons why we can't do it again. And that is before we take into account that almost every nuclear plant ever built, even in highly developed economies, has gone over budget and overtime.

Nuclear lobbyists have every right to state their case, but it smacks of desperation when one reverts to false statements about other technologies.

It is not because green activists are persuading economically ignorant governments to adopt cleaner solutions that renewable energy is experiencing global exponential growth. It’s growing because it makes technical, environmental and financial sense. Many people have spent significant effort in establishing and contributing to what is regarded internationally as a highly successful renewable programme in South Africa - and as a country we should be proud that we are leading the way globally. We should also be proud that in just 5 years our renewables so far have created more than 20 000 new jobs, have saved us more than R3.5bn in offset diesel and coal costs and have displaced more than 5 million tons of CO2. We also have access to cheap, clean and CO2-free energy which uses minimal water.

In the projects that are currently awaiting approval, Eskom is standing in the way of 26 000 new jobs to build 49 clean power stations that will produce energy cheaper than what we are currently paying to Eskom. In our prevailing economic climate, it almost seems treasonous.

Claiming to be a scientist, Mr Kemm should stick to providing facts about his areas of expertise rather than ruining his credibility with nonsense about technologies of which he is clearly ill informed.

* Dr Chris Haw is Executive Director at Aurora Power Solutions. Aurora Power Group is a 100% South African-owned set of companies operating in the IPP and embedded solar PV industry. Aurora was one of the founding members of the South African PV Industry Association (SAPVIA).

* The views expressed here do not necessarily reflect those of Independent Media.




Related Topics: