by Tristen Taylor

In the quest for a comprehensive strategy for using renewable forms of energy generation, arguments made of rice paper, dodgy economics, and blind tradition abound.

Many of the arguments against renewable forms of energy have degenerated into some kind of blind hatred, either that or a misguided reactionary diatribe against the one class of technology that has the ability to deal with both climate change and job creation. Either way, this article aims to shed light on the advantages of renewable energy and the problems facing its implementation in South Africa.

The Good

The good news is that, within the coming decade, renewable energy will be cheaper than fossil fuel power generation, and on pure market terms. That is, even if you disregard the externalised costs of coal and nuclear technologies, renewable energy will still be cheaper. Read that again, for it is perhaps the most far-reaching statement in the energy sector today.

Add in the bonus that “renewable” create more low-skilled jobs, the kind of employment our economy needs like a surfer needs a wave, than any other form of energy generation, and transitioning to “renewable” should be a no-brainer.

The truly staggering consequence of declining renewable costs is Eskom’s current new build programme. Eskom is plunging hundreds of billions – Medupi alone will cost more than R80 billion – into the construction of a coal-fired power station with a lifespan of 60 years. The lords of darkness at Megawatt Park haven’t thought this one through; they are locking us into an increasingly expensive energy path while a cheaper alternative already exists. So who will pay for this long-term mistake? You, that’s who. NERSA (the National Energy Regulator of South Africa) will be jacking up the prices on a weary, monotonous basis as Eskom demands to pass-through costs. Get used to it, mortgage the kids.

The other piece of good news is Long-Term Mitigation Scenarios (LTMS), South Africa’s first serious attempt at dealing with the minor inconvenience of climate change melting ice caps, spreading drought across the country and welcoming malaria into virgin areas. The LTMS charts a path to cut South Africa’s CO2 emissions by 30% by 2050, and was approved by Cabinet in June 2008. A lengthy policy process is now to follow, marked by a National Summit on the LTMS in March 2009.

The major steps in the LTMS towards reducing South Africa’s carbon emissions are, 1) to have 50% of electricity coming from renewable resources, and 2) introduce carbon taxation. If implemented, this should mean a gold rush for renewables. I say “should” because the US, French and Russian nuke boys are planning to chow our national budget first.

The Bad

The LTMS also states that 50% of all electricity should come from nuclear technology. The calculator at National Treasury doesn’t have enough zeros for that. Take for example the farce of the Pebble Bed Modular Reactor (PBMR): So far, the citizens of South Africa have forked out R14 billion for a series of vague promises that a demonstration reactor will be built in the near (but never quite here) future, about R12 billion more than originally projected. The theoretical capacity of one PBMR is 165MW. At present, Eskom is trying to find R5 billion to build a 100MW solar thermal plant (fuel costs zero, with sunlight being free) outside of Upington. Go figure.

But it is not the prospect of hordes of PBMRs that has got the French and Americans salivating (I won’t even mention the Russians again, Russian-built nuclear reactors fill me with cold, aching, strontium-90 terror). It’s building pressurised light-water reactors like Koeberg. One of those produces roughly 1900MW at a construction cost of R100 billion. This excludes decommissioning costs (add another R100 billion or so), security costs, fuel costs, and storing radioactive waste for 750 000 years. I have yet to find an economist willing to calculate the costs of storing waste for this long; they tend to dissolve into hysterical giggles.

Conservatively speaking and on a best-case scenario, to install 20 000MW of nuclear power will cost R560 billion in capital costs alone. The government’s projected revenue for 2007/8 was R575 billion.
That’s not all. The cost overruns of nuclear power are legendary. Areva, who built Koeburg and wants to build more of those reactors across the Cape, is trying to build a new pressurised reactor in Finland. Last month, Areva announced that costs for that reactor have soared from €3 billion to €4.5 billion and the finish date has been pushed back from 2009 to 2011.

And, in case you were wondering, no insurance company will pay out a claim for damages from a nuclear accident. Radioactive bombardment is an exemption, just so you know.

If government goes ahead with its plans for 50% of all electricity from nukes, it will bankrupt this country, gain a fat bonus for Areva’s number-one salesman, Nicolas Sarkozy, and leave no money for renewables. In other words, the safest, cleanest, and cost-effective energy resource will be deprived of funding because of the Department of Minerals and Energy’s nuclear addiction.

Speaking of addictions to scarce fossil fuel resources, the really bad news is that Peak Oil is upon us. We have or will very soon have consumed half of the world’s oil supply (refer to the immediate past issue of the Transformer). We are running out of the best energy resource available, and this will drag up coal and natural gas prices. Traditional energy will become more expensive, making for an increasingly costly transition to renewables. We have to start now, in order to avoid higher costs in the future. But, we must ask, with Eskom spending hundreds of billions on new coal-fired plants and even more on nuclear plants, how will we ever finance the transition to renewables in a climate of escalating energy prices?

The Ugly

I am often amazed at the blind cheapness of our society. Ever since 1994, communities across South Africa have been protesting against a lack of basic services; in particular, a lack of access to water and electricity. This is a vital issue as the electricity price is set to continue increasing for the foreseeable future, thus making a service already unaffordable for millions of South Africans even more of a luxury.

Yet, electricity in a modern economy such as ours is not a luxury. Instead, it is a basic necessity for poverty eradication; it is hard to study without lighting and purchasing food becomes more costly without refrigeration.

The Department of Minerals and Energy’s own research in 2003 estimates that the cost for a minimal amount of 50kWh per qualifying household nationwide would be R550 million a year; a 50kWh allowance is insufficient to meet basic needs. This cost would have to triple or quadruple to provide an amount of electricity necessary to meet basic needs and avoid households turning to alternative and dangerous energy supplies such as paraffin, coal and firewood. The costs of these alternative energy resources are paid not only by the users, but society as a whole, in the form of healthcare and infrastructure repair costs.

According to a GroundWork 2007 report, there were 46 000 paraffin fires, 50 000 paraffin burns, and at least 4 000 children died from drinking paraffin in 2000. The total cost to the economy of paraffin-related incidents is R100 billion a year. Our children are being physically scarred for life or are dying because the state refuses to supply adequate electricity to its poorest and most marginalised citizens.

Therefore, it is cheaper to provide adequate free basic electricity of an amount that covers needs than it is to remain with the status quo. And, the status quo is what DME is wishing to entrench in its Draft Electricity Pricing Policy, currently snaking through government halls.

So here's the overall story: Instead of investing now in renewable technologies that save consumers’ pockets, massively reduce air pollution, and prevent the worst effects of climate change from ravaging the planet, we are continuing down an increasingly expensive and dirty energy path. Who will benefit from this? Areva, Alstrom, PBMR Company, General Electric, etc. Who will pay for it? We will.

Tristen Taylor works for Earthlife Africa.

Transformer Vol. 14 No. 5 Oct-Nov 2008