Finance Minister’s gas, nuclear investment bid ‘a fantasy’ - DA

Minister of Finance Enoch Godongwana. Picture: Timothy Bernard African news Agency (ANA)

Minister of Finance Enoch Godongwana. Picture: Timothy Bernard African news Agency (ANA)

Published Nov 2, 2022


Durban — The DA spokesperson on mineral resources and energy Kevin Mileham called Minister of Finance Enoch Godongwana’s proposed investment in gas and nuclear a fantasy.

Mileham mocked the finance minister on Tuesday, saying that Godongwana’s remarks – that taking over a portion of Eskom’s debt would be made on condition that the power utility agreed to invest in coal, gas and nuclear – are not only regrettable but reveal the extent of a government that has run out of ideas on how to address the energy crisis facing the country.

The DA was responding to the government’s proposed plans to embark on an Eskom debt relief programme that will see it take over a portion of the utility’s R400 billion debt.

The finance minister outlined the plan during his Medium Term Budget Policy Statement a fortnight ago.

The minister said the selection of relevant debt instruments and the method of effecting the relief is still to be determined, but the quantum is expected to be between one-third and two-thirds of Eskom’s current debt.

But Mileham said the only logical conclusion from this surprise announcement is that Mineral Resources and Energy Minister Gwede Mantashe has managed to “turn” Godongwana and made 240 Madiba Street in Pretoria – the Treasury Tender Information Centre – a playground to fulfil his fantasy towards a coal, gas and nuclear mix. The DA still opposes the dumping of Eskom debt on the sovereign balance sheet, Mileham said.

“We are equally opposed to harebrained attempts to foster economically unviable energy sources, like coal, gas and nuclear into the energy mix.”

The DA had earlier this year issued a warning that South Africa does not have access to cheap gas resources to be able to power gas stations at a commercially viable scale, he said.

“Using the current import prices of gas from Mozambique, retail prices per kilowatt hour of electricity generated from these gas power stations will likely be unaffordable for most South Africans,” Mileham warned.

The same goes for nuclear power – these plants take years to build and South Africa does not have the money or the luxury of waiting that long for new generation capacity.

“Experience with Medupi and Kusile power stations indicates that the ANC government is equally incapable of creating new generation capacity from coal in any reasonable time frame, or within a reasonable budget, and without the influence of corruption and maladministration.

“Renewable energy from Independent Power Producers and distributed embedded generation are the only viable options to increase new generation capacity in the shortest possible time.”

The viability of renewable energy has been confirmed in successive bid windows, where the unit generation costs have continued to fall substantially.

Mileham said Eskom recently highlighted via the Transmission Development Plan Public Forum the importance of renewable energy when it admitted that it would need around 53 GW of new additional generation capacity from renewable energy sources to ensure energy security for SA.

The question is, why are Godongwana and Mantashe committed to derailing these viable plans in favour of coal, gas and nuclear options that would not solve the country’s immediate energy needs? Mileham asked.

“The DA will use every tool to ensure this ‘Alice in Wonderland’ between Godongwana and Mantashe does not saddle SA with vanity projects that do not provide immediate solutions to the energy crisis. Taking over Eskom debt is a bad decision, but demanding Eskom invests in new coal, gas and nuclear generation as a condition for the debt assumption, is outrageous.”

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