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Nuclear and Coal Lobbies Threaten to Scupper Renewables in South Africa

Hartmut Winkler's picture

Hartmut Winkler (@hawiknowledge1) is Professor of Physics at the University of Johannesburg.

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  • Aug 17, 2017 12:00 pm GMT

South Arica’s state utility Eskom is undermining the development of renewable energy in South Africa, writes Professor Hartmut Winkler of the University of Johannesburg. According to Winkler, the country’s coal and nuclear lobbies are behind the opposition to renewables. The struggle is part of a wider political confrontation over control of key parts of the South African economy. Courtesy The Conversation.

South African power utility Eskom recently repeated that it will not conclude supply contracts with the developers of new renewable energy power stations. These developers were selected under a programme to facilitate private sector involvement in the building of medium-sized renewable energy power stations.

The programme has won plaudits for its success in facilitating the establishment of multiple solar and wind farms in record time. But Eskom is once again stalling.

The power utility’s stand threatens the viability of the entire renewable energy sector in the country. It’s hostility also defies logic given that the whole world is embracing renewable energy as key to a clean energy future and combating climate change.

So what lies behind the opposition?

The answer lies in the fact that two powerful lobbies are at work in South Africa. One is pro-coal, the other pro-nuclear. This has made the success of the renewable energy projects a target for attacks from interested parties in both. Disrupting the renewable energy sector would ensure that the coal sector remains dominant. And that, over time, it is gradually displaced by nuclear.

Eskom has pointed to the oversupply of electricity as the reason for its objection. But elsewhere it has trumpeted the need for more nuclear power. It can’t have it both ways

The lobby groups attached to coal and nuclear appear to have had powerful allies on the state utility’s board. There is mounting evidence that they have been furthering the interests of a group linked to the Gupta family. It in turn has been accused of capturing state entities to further its own ends, as well as those of President Jacob Zuma, his family and allies.

It has also been widely argued that the massively expensive proposed nuclear build is being driven by the same interest groups.

The battle over renewables is therefore closely linked to a wider political confrontation over control of key aspects of the South African economy.

Eskom’s flawed argument

The renewables dispute centres on the state utility’s refusal to endorse 1121 MW of new renewable energy. This translates to about 1% of Eskom’s current generated electricity, given that renewable energy supply is intermittent. This additional renewable energy would make up 5% of the total renewable energy generating capacity projected by 2030.

Eskom accepts the need to expand its generating potential in the long term. The additional contribution from renewables is well within its broader expansion targets. And tariffs on the energy from renewable sources would be almost half of the estimated cost of new coal and new nuclear power.

Until two years ago Eskom was seen as a neutral player committed to effectively provide electric power in the best interests of the country. But that all changed in 2015 after Brian Molefe was appointed CEO

The Public Enterprises Minister Lynne Brown has been disingenuous in citing cost as a reason to stop the last phase of renewables. The higher costs she recently quoted were presumably those associated with the first round of renewable energy projects. These contracts were concluded in 2012 and prices for renewables have come down considerably since.

For its part Eskom has pointed to the oversupply of electricity as the reason for its objection. But elsewhere it has trumpeted the need for more nuclear power. It can’t have it both ways.

Powerful forces at play

Until two years ago Eskom was seen as a neutral player committed to effectively provide electric power in the best interests of the country. It threw its weight behind previous power procurement plans.

But that all changed in 2015 after Brian Molefe was appointed CEO.

Molefe and his successor Matshela Koko are both linked to the controversial Gupta family. Their names featured in the Public Protector’s State of Capture report as well as in a bulk leak of emails which implicated the Guptas and other leading figures in the state capture network.

Molefe and Koko played a pivotal role in helping the Guptas purchase a coal mine – the Optimum mine – and to secure a lucrative coal supply contract with Eskom. Both are also strongly pro-nuclear. They have also gone on record to argue that renewable energy is too expensive.

Eskom has furthermore listed renewables as the reason for planning to shut down four coal power plants. In reality, these old plants had already been destined for closure in anticipation of the imminent additional power supply expected from two new coal plants – Medupi and Kusile.

Ultimately South Africa won’t be able to buck international trends. That means that, in the longer term, the future of renewables in South Africa remains bright

It’s suspicious that one of the power stations facing closure, Hendrina, is supplied by coal from the Optimum mine. The effect of stalling renewable power expansion could force the extension of Hendrina’s life span.

Brown is in the process of restructuring the Eskom board after Molefe departed, Koko was suspended and the chairperson of the board resigned. Although there are signs that the minister is aware that she has been misled by the Eskom board on other matters, she doesn’t seem to believe this is true when it comes to renewables, repeating recently the view that it’s too expensive.

Brown’s counterpart in the energy portfolio, Nkhensani Kubayi, has displayed little sympathy for the renewable energy sector, also making far-fetched and easily disprovable claims that the initial solar and wind power stations have resulted in zero jobs. Renewable energy is in fact estimated to eventually generate over 100 000 jobs in South Africa.

Kubayi has also shown that she’s highly receptive to the nuclear lobby. Visiting a nuclear industry fair in Russia in the middle of June she expressed concern that the judicial disqualification of the existing nuclear cooperation agreement damaged relations with that country.

It has been convincingly argued that South Africa can’t afford the nuclear option in the current economic environment.

The immediate future

The global ascendancy of renewables and their particular pertinence in South African climatic conditions may even make coal and nuclear energy technologies obsolete in the distant future. Ultimately South Africa won’t be able to buck international trends. That means that, in the longer term, the future of renewables in South Africa remains bright.

Editor’s Note

This article was first published on The Conversation and is republished here with permission from the author and publisher.

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Bob Meinetz's picture
Bob Meinetz on Aug 18, 2017

An interesting but flawed perspective, Hartmut. The source of Eskom’s opposition to renewables might more accurately be framed as “renewables threaten to scupper themselves” – with intermittency, with grid instability, with expense.

Your argument for wind and solar as a basis for job creation has as little merit as one which relies upon their energy contribution. Wars create jobs; we (ostensibly) don’t fight them for that purpose. And the false equivalency linking coal and nuclear as co-conspirators duly noted: coal is among the most environmentally hazardous sources of energy, nuclear among the least. Nuclear is capable of replacing coal as a baseload source of electricity; renewables don’t have that capability, and never will.

Either renewables are the target of a vast, coordinated conspiracy, among disparate elements each with their own merits and goals – or they just aren’t as useful as many energy amateurs think they are. What’s more likely?

Nathan Wilson's picture
Nathan Wilson on Aug 20, 2017

It is phony accounting to compare the levelized cost of renewables to that of coal or nuclear. Renewables primarily reduce fuel consumption in the rest of the fleet, they still require near complete backup from dispatchable generators.

Instead renewable levelized cost should be compared to the backup generator’s fuel cost. This makes them much less attractive in location which lack plentiful fossil gas; coal and nuclear plants are not cost effective as backup generators, since their levelized capital cost is high and their fuel cost is low.

If South Africa wants to grow its us of renewables, it should follow the US lead, and first grow its production of fossil gas, and build lots of low cost gas-fired power plants.

Of course the down-side of the pro-gas strategy is that it won’t be easy to kick the gas habit. The only countries that have really accomplished that feat are ones that never really produced much anyway (e.g. France, which prefers nuclear power, and Germany which prefers coal).

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