074 104 2944
074 104 2944
New nuclear power lacks a business case for South Africa, whichever country provides the technology.
There is no rational basis for policy to discriminate against efficiency and renewables.
By ANTON EBERHARD and AMORY LOVINS.
The global nuclear industry faces major challenges – there are significant risks of project failure or abandonment and their massive installation costs, construction and operational difficulties result in delays as well as huge financial losses for investors. Of the 259 US nuclear plants ordered between 1955 and 2016, only 28 units (some of which are slated for closure) remain economically viable to date and 49% – almost half – were abandoned before start up. Renewable energy, on the other hand, is growing in popularity around the world.
Reliability of renewable energy
A regular critique of renewable energy made by proponents of nuclear power is that it is unreliable – the wind does not always blow and the sun does not always shine. However, the objective function of the computer model – PLEXOS – used to prepare South Africa’s IRPs is a least-cost, optimal generation mix that meets a specified security of supply each hour of the day throughout the year. The latest IRP2017 modelled by Eskom also records that there is sufficient “dispatchable power” to fully cover peak demand.
The IRP 2017 incorporates concentrated solar power plants procured in the first three renewable energy auctions. While this power source is still regarded as expensive in South Africa, global developments indicate that it is becoming increasingly competitive. Night-time solar power from stored solar heat – similar to the 9.3 hours of thermal storage in South Africa’s new Bokpoort solar plant in the Northern Cape – sells in Chile for 9.7 US¢/kWh, one-half above the day-time solar price (6.5¢) but one-third below the EU nuclear price (~13–15+¢).
But even without bulk electrical or thermal storage, wind and PV’s accurately forecastable variability can readily be managed by approximately several proven methods that are generally profitable in their own right. This is not just a theoretical possibility but well proven in practice. In 2014, four EU countries not rich in hydropower, met about half their electricity needs from renewables (Spain 46%, Scotland 50%, Denmark 59%, Portugal 64%) without increasing bulk storage or decreasing reliability. They run their grids as a conductor leads an orchestra: no instrument plays all the time, but the ensemble continuously produces beautiful music. Similarly, renewables met 33% of Italy’s 2014 electricity needs, 27% of Germany’s, 22% of Ireland’s, 20% of France’s, and 19% of Britain’s. Most of these renewable fractions continued their upward progress in 2015 and 2016, generally accompanied by increasing reliability of grid supply and by moderating or decreasing wholesale electricity prices (often overlooked by those who focus on high retail prices in a few countries, notably Denmark and Germany, where long-standing policy heavily taxes household electricity).
Meridian Economics published a report recently on Eskom’s financial crisis and the decreasing demand for electricity while its costs continue to rise dramatically, driven primarily by its new-build programme. This is the executive summary of the report.
The South African power system has reached a crossroads. Eskom, the national power utility, is experiencing an unprecedented period of demand stagnation and decline, while having simultaneously embarked on an enormous, coal-fired power station construction programme (Medupi 4764 MW and Kusile 4800 MW) which has been plagued with delays and cost over-runs. This has forced Eskom to implement the highest tariff increases in recorded history and has led to a crisis in its financial viability and, at the time of writing, a liquidity crisis (Groenewald & Yelland, 2017).
074 104 2944
13 FEBRUARY 2018 – 12:04 LINDA ENSOR
The proposed Carbon Tax Bill has finally entered the parliamentary process after two years of extensive consultation on various drafts.
The draft bill will be subjected to public hearings and further submissions before being revised into a final draft that is expected to be completed by mid-2018. The first draft of the bill was published for public comment in November 2015 but preparations started well before that in 2010.
Extensive consultations have already taken place with stakeholders across the spectrum of society and the Treasury has also invited further submissions until March 9.
In terms of the proposals, carbon emissions above a certain level will be taxed at a rate of R120 a tonne of carbon. The tax, which aims to reduce carbon emissions, will be phased in with adjustments being made to other taxes and provision made for tax incentives to ensure the tax is revenue neutral.