Category Archives: Coal

New study reaches a stunning conclusion about the cost of solar and wind energy

Think Progress, 20 November, 2017

In one of the fastest and most astonishing turnarounds in the history of energy, building and running new renewable energy is now cheaper than just running existing coal and nuclear plants in many areas.

A widely-used yearly benchmarking study — the Levelized Cost of Energy Analysis (LCOE) from the financial firm Lazard Ltd. — reached this stunning conclusion: In many regions “the full-lifecycle costs of building and operating renewables-based projects have dropped below the operating costs alone of conventional generation technologies such as coal or nuclear.”

Lazard focused on the cost of a power for a plant over its entire lifetime in North America, and how the “increasing economic advantage of renewables in the U.S.” will drive even deeper penetration of solar and wind here.

But Lazard also makes a key global point: It’s more expensive to operate conventional energy sources in the developing world than it is in the United States. So the advantage renewables have over conventional sources is even larger in the rapidly growing electricity markets like India and China.

Since power from new renewables is cheaper than power from existing coal and nuclear, it’s no surprise that the lifetime cost of new renewables is much cheaper than new coal and nuclear power. And that gap is growing.

Lazard notes that in North America, the cost for utility scale solar and wind power dropped 6 percent last year, while the price for coal remained flat and the cost of nuclear soared. “The estimated levelized cost of energy for nuclear generation increased ~35 percent versus prior estimates, reflecting increased capital costs at various nuclear facilities currently in development,” the analysis found.

Indeed, as Lazard shows in this remarkable chart, while solar and wind have dropped dramatically in price since 2009, nuclear power has simply priced itself out of the market for new power.

 

 

 

Source: Lazard Estimates

The lifecycle cost of electricity from new nuclear plants is now $148 per megawatt-hour, or 14.8 cents per kilowatt-hour, while it is 5 c/kwh for utility scale solar and 4.5 c/kwh for wind. By comparison, the average price for electricity in United States is 11 cents per kWh.

So it’s no big shock that there’s only one new nuclear power plant still being built in the United States — or that even existing power plants are struggling to stay competitive.

Indeed, over half of all existing U.S. nuclear power plants are “bleeding cash,” according to a Bloomberg New Energy Finance report released earlier this summer. Even the draft report from the U.S. Department of Energy staff for Secretary Rick Perry conceded that coal and nuclear are simply no longer economic.

Here is the full article

Dear Energy Committee Chairperson, how about some real accountability?

Daily Maverick, Richard Halsey, 27 November, 2017

Over the years we have observed two unfortunate trends. The first is an increasing lack of accountability of government officials, and the second is key decisions in the energy sector being made against public and environmental interests. By Richard Halsey on behalf of ENERGY GOVERNANCE SOUTH AFRICA (EGSA).

We wrote to you directly on 2 October 2017 regarding what we view as a blatant failure of governance, when the previous Minister of Energy, Mmamoloko Kubayi, provided entirely inadequate responses to several parliamentary questions. When I say ‘we’, I am referring to Energy Governance South Africa (EGSA), a network of concerned individuals and organisations dedicated to promoting good governance in the energy sector. Project 90 by 2030 is an environmental non-profit organisation that co-ordinates the EGSA network.

We wrote to you in your capacity as chairperson of the Portfolio Committee on Energy, since the Minister of Energy reports to your committee. We never received a reply. In fact, over the last few years, EGSA has written several letters to yourself and various officials in the Department of Energy, and not received a single reply. After lodging a complaint with the Public Protector on this issue of non-responsiveness, and waiting over a year a half, there was still no resolution. So it is unclear how we can restore accountability and good governance in the energy sector.

Lack of accountability by avoiding critical questions

Returning to the matter we raised on 2 October, here are the details again. We refer to responses that were provided by Kubayi in a Memorandum from the Parliamentary Office. This is a process where Members of Parliament can ask a Minister questions, and responses are provided in writing.

An example is provided below, taken directly from the correspondence, with italics added.

2296. Mr M M Dlamini (EFF) to ask the Minister of Energy:

why does the draft IRP and IEP make provision for new coal-fired and nuclear power when it has comprehensively been shown by the Council for Scientific and Industrial Research that renewable energy with additional storage capacity and gas is the most cost-effective and feasible plan for South Africa’s energy future? NW2535E.

Reply:

……….

  1. The final IRP and IEP will be communicated and promulgated once concluded, currently we don’t have a final position to communicate.
  2. It is clear that this question, which was about the draft IRP (Integrated Resource Plan) and IEP (Integrated Energy Plan), remains wholly unanswered. This is unacceptable, as these energy choices affect everyone in South Africa. The IRP maps out electricity infrastructure requirements in the future and is of critical importance to our nation. This makes us wonder what there is to hide and why there is not full transparency. Where is the accountability?

    As concerned citizens, we view this as a threat to democracy that an elected official was not only flouting with an established process, but was evidently avoiding answering important questions about energy planning in our country.

    This brings me to the second point: energy planning decisions are not being made in the best interests of citizens and the environment.

    Flawed motivations for energy decisions

    On 21 November 2017, I spent the day in Parliament listening to the new Minister of Energy, David Mahlobo, talking for a long time without actually providing the necessary details. I know this a political strategy as old as politics itself, but as the chair of the meeting, it should be your responsibility to ensure that we do get clarity on these important matters. This was promised at the outset, but never materialised. Mahlobo’s presentation was a verbal equivalent of Kubayi’s avoidance to give direct, helpful replies.

    However, there were a few key themes that emerged: all of them problematic for good governance.

    1. National endowments

    Mahlobo repeatedly pointed to the endowments South Africa has in terms of natural resources. The chain of thought was simply that because we have a collection of resources, we must automatically use all of them. According to Mahlobo, that is how resource planning works. I disagree. Just because you have something, it does not necessarily mean you should use it. Out of a set of options, you should pick the best combination, not force a situation of using all of them to some extent purely because they are there. This argument means that no matter how harmful, polluting, costly or inappropriate an energy resource is, South Africa must use it if it is found within our borders.

    2. Inflexible policy regarding energy sources

    The audience heard many times from Mahlobo that “the energy policy will not change”, and the context was in terms of the energy mix. This was explained to mean that whatever energy sources were listed in the IRP from 2010 will remain in the policy going forward. End of story. There was a rigid assertion that all energy components from the IRP 2010 must stay and that only the “pace, scale and affordability” will be adjusted. Quite frankly, this idea that “we do not change policy” is ridiculous. In a changing world, and particularly an evolving energy sector, you must continually re-evaluate if all components of the policy are still fit for purpose. To only consider the time, size and cost aspects of existing components, without the ability to remove components that have been superseded by superior options, is absurd.

    Nuclear implications

    The highly problematic result of the ‘endowment’ and ‘unchanging policy’ themes presented by Mahlobo is that nuclear is still being pushed. The implication was that since South Africa has uranium, and because new nuclear capacity was included in the outdated IRP 2010, then nuclear must be part of future planning. We should remember that even back in 2010 there was heavy criticism that the IRP included new nuclear build and much has changed since then. Not only can renewable energy now provide a low carbon alternative to nuclear at a fraction of the cost, but many countries including Germany and France and changing their policies on nuclear. Imagine that. However, according to Mahlobo, since we are “blessed” with an endowment of uranium and since we cannot entertain the idea of removing a new nuclear build from the policy, we must just go with it. Clearly this stance ignores research by energy experts, findings by economics modellers, public sentiment and common sense.

    Ulterior motives

    The issues of state capture, corruption and patronage politics have been extensively discussed and publicised in recent times, so I will not elaborate on them. The links between President Zuma, the nuclear deal and the Russians have been widely covered. The Gupta family also happen to own the only dedicated uranium mine in the country through Shiva Uranium. Furthermore, it has also been reported that even Eskom’s own recent work on the IRP revisions shows nuclear is not appropriate, and subsequently Mahlobo and his team of nuclear enthusiasts have taken the IRP back so they can “massage” it with “policy adjustment”.

    It is in this current political situation that we must assess Mahlobo’s presentation to Parliament, which was made just over a month after his controversial appointment as the third Minister of Energy this year. Simply put, these themes of endowment use, and the inability to change the energy mix within the IRP, come across as weak and false justifications to forge on with nuclear, when it is obvious that there ulterior motives behind the scenes. Mahlobo’s evident attempts to force nuclear into future energy planning demands scrutiny from responsible committees and organs of state.

    In conclusion, Honourable Majola, we ask you to do what is honourable. That is to respond to public correspondence and to ensure officials and Ministers give proper answers to parliamentary questions. Above all, it is your responsibility to make certain that energy planning is done from an objective and rational basis, which puts the needs of South Africans and the environment first. Can we count on you to do all this? DM

Op-Ed: A just transition from climate change and unemployment – a trade union perspective

Daily Maverick, 7 November, 2017

The Alternative Information & Development Centre’s (AIDC) latest research – One Million Climate Jobs – Moving South Africa forward on a low-carbon, wage-led and sustainable path – makes clear that there are potentially hundreds of thousands of jobs in championing low carbon development, as a complimentary strategy to a wage-led development path. By JOSEPH MATHUNJWA.

The global economy is facing numerous structural challenges. With the looming fourth economic revolution characterised by even more technological development and mechanisation, the future of productive labour is bleak. Most unskilled and semi-skilled workers are likely to lose their jobs. Even some skilled workers are not spared from this emerging catastrophe, as numerous job categories – such as brick-layers – are increasingly becoming redundant.

This points to the urgent need for planning, for conscious investment in job-rich, growth opportunities that enable economies to build productive capacity in labour intensive sectors. One way of achieving this is to strengthen wage led growth, which, in turn, stimulates aggregate demand through enlarged household incomes. Without a dramatic increase in the wages of mine workers, farm workers and all employed people in our country, we will never be able to deal with South Africa’s most urgent problems: inequality, mass unemployment and poverty.

Since unemployment is the greatest determinant of poverty and income inequality, we can expect these, too, to worsen. Already, in 2015, 30.4-million people, that is, 55.5% of the population live on less than R441 per month, or less than R15 per day. The fact that 10% of South Africa’s population earn around 60% of all income, points to South Africa’s widening inequality. Even more alarming is that the richest 10% of the population own at least 90–95% of all assets.

With these terrible statistics in mind, it becomes redundant to repeat what we have been saying as a trade union for a long time, namely, SA urgently requires the redistribution of wealth.

When the millions of working people in our country can afford what the few take for granted – a television set, a washing machine, dining room table, etc – we create the conditions for developing the economies of scale that can sustain local industries from the intense competition coming from a globalised economy. In this way, we will be able to make in-roads into the almost 10 million people who are out of work, out of income and out of dignity.

The importance of the climate jobs work the Alternative Information & Development Centre (AIDC) has been leading is that it identifies where the jobs can be created. As AIDC’s latest research – One Million Climate Jobs – Moving South Africa forward on a low-carbon, wage-led and sustainable path – makes clear, there are potentially hundreds of thousands of jobs in championing low carbon development, as the complimentary strategy to a wage-led development path.

The AIDC’s solidarity with AMCU (the Association of Mineworkers and Construction Union) is greatly appreciated. It is a solidarity based on a shared approach and conviction of the urgent need to confront the numerous challenges facing our economy, the people whose needs the economy is supposed to meet and the sustainability of human life on a planet heating to unsustainable levels.

Here is the full article

 

 

Broken Promises: The failure of South Africa’s priority areas for air pollution – time for action

Centre for Environmental Rights, 2 October, 2017.

oday, the Centre for Environmental Rights (CER), in collaboration with groundWork and the Highveld Environmental Justice Network (HEJN), launched a new report entitled Broken Promises: the Failure of the Highveld Priority Area, exposing the Department of Environmental Affairs (DEA)’s failing air pollution governance system – with a particular focus on the Mpumalanga Highveld. The report sets out urgent steps that should be taken by various authorities to improve the severe air pollution in several parts of South Africa, particularly in those parts which are supposed to be the priority areas aimed at reducing air pollution.

From 10h00 this morning, people who live and work in these priority areas will stage a peaceful protest at the DEA’s annual Air Quality Lekgotla in Woodmead. The Executive Summary to the report, in brochure-format, will be handed over to the DEA, and constitute the demands of the groups represented there.

Background

In November 2007, the Minister of Environmental Affairs declared 31,000 km2 of the heavily-polluted Mpumalanga Highveld, then home to about 3.6 million people, a “priority area” in terms of the Air Quality Act. The Highveld Priority Area (HPA) was declared because, as the DEA said at the time, “people living and working in these areas do not enjoy air quality that is not harmful to their health and well-being”, as required by section 24 of the Constitution.

The CER, groundWork, and HEJN have been supportive, active and vocal participants in the various HPA processes for many years, with a particular focus on the Nkangala District Municipality (NDM) (home to towns like eMalahleni/Witbank, Middelburg, Delmas and Hendrina), which hosts significant industrial, electricity generation, mining, and manufacturing activity.

However, frustrated with the lack of progress and the ongoing and devastating health impacts related to the failure to improve air quality, the CER and its partners have conducted our own analysis [1] to determine whether the declaration of the HPA and the promulgation of the air quality management plan (AQMP) have improved air quality within the HPA to protect health; and if not, why not?

Our findings

Our conclusions are that, a decade after the HPA’s declaration, air quality in the HPA remains poor and out of compliance with health-based national ambient air quality standards (NAAQS) (even though these are significantly weaker than the guidelines of the World Health Organisation). This is confirmed by expert analysis and the DEA’s own reports, including its draft review of the HPA AQMP published in February 2017, which found that emissions have not decreased significantly – if at all – over this period.

It is likely that the continued non-compliance with NAAQS is, in large part, due to the failure of key major industrial facilities to reduce their emissions either adequately, or at all. The National Air Quality Officer (NAQO)’s controversial decision in early 2015 to grant postponements from compliance with the minimum emission standards under the Air Quality Act to the biggest polluters in the HPA – Eskom and Sasol – has made it significantly less likely that air pollution in the HPA will be reduced.

The HPA ambient air quality monitoring network has deteriorated since its declaration. The 2012 HPA AQMP listed 23 monitoring sites with available data, while the DEA’s draft review of the AQMP listed just 9 monitoring stations with available data. Only 5 of the 9 stations published timeously monthly reports, available on the South African Air Quality Information System (SAAQIS) website.

Municipalities do not have have enough money or dedicated, appropriately trained and skilled staff to implement the HPA AQMP and to enforce the Air Quality Act. There are only a few of the right people to do air quality management work. These officials have too many responsibilities, and are over-stretched to the extent that they are unable to devote adequate time to air quality management, compliance monitoring and enforcement.

In short, the HPA has dismally failed in its purpose: to improve air quality so that it at least meets the NAAQS. This means that the Constitutional rights of the people of the Mpumalanga Highveld to an environment not harmful to health and well-are being violated every day. The significant air pollution means that Highveld residents are dying prematurely, and suffering from respiratory and cardiac illnesses that inhibit their prosperity and wellbeing.

What needs to change?

People living in the HPA, and organisations that have been active and vocal participants in the HPA structures, are angry and frustrated by government’s failure to protect health by reducing air pollution in priority areas. Pollution is not being adequately monitored or reduced, and polluters are not being held accountable.

The report sets out a number of key recommendations that authorities should implement to demonstrate that improving air quality in the HPA is, in fact, a priority for government. These measures are the minimum steps that are required in order for the state to meet its Constitutional obligations in terms of the environmental right and for all authorities to meet their obligations under the Air Quality Act. Although the focus of the report is the HPA, the majority of these recommendations apply equally to the other two priority areas – the Vaal Triangle Airshed Priority Area, and the Waterberg-Bojanala Priority Area – neither of which comply with NAAQS.

  1. Given the continued non-compliance with NAAQS in the HPA, immediate steps must be taken to reduce emissions of pollutants:
    • All facilities in the HPA must be required to comply with at least the minimum emission standards. Therefore, having heard representations from the facilities and affected communities, the NAQO should use her powers under the Air Quality Act to consider withdrawing the postponements of compliance with minimum emission standards granted to Eskom and Sasol.
    • No further postponements of compliance with minimum emission standards or other air emission licence variations that permit exceedances of licence emission standards should be allowed.
    • Licensing authorities must suspend the issuing of all new emission licences in the HPA, until there is consistent compliance with all NAAQS. Approval and licensing of any expansion plans of existing industries must be contingent on a simultaneous substantial reduction in emissions.
    • When facilities reach their scheduled end-of-life (particularly certain Eskom coal-fired power stations), air emission licences must be withdrawn, and decommissioning and rehabilitation enforced.
    • The Dust Control Regulations must be amended to ensure adequate monitoring, measurement, and reduction of the significant dust emissions in the HPA, particularly from mining sources.
  1. In recognition of the crucial importance of air quality compliance in the HPA, a comprehensive compliance monitoring and enforcement programme must be put in place by DEA and local authorities to ensure that violations of emission licences are detected, and enforcement action taken against those who violate licence conditions. Such enforcement action must include suspension of licences for facilities until such time as emissions comply with licence conditions.
  1. The institutions charged with ensuring improved air quality in the HPA must be strengthened and appropriately resourced:
    • The DEA, the Mpumalanga and Gauteng provincial governments, and municipalities must demonstrate accountability for the proper management of priority areas, recognising that they have an ongoing responsibility for implementing and enforcing approved priority area AQMPs.
    • National government, provincial government, and local authorities in the HPA must allocate adequate financial and human resources to fulfill air quality management functions, including the right tools, training, and equipment to enable the reduction of emissions and improvement of the ambient air quality in NDM, eMalahleni and HPA as a whole.
    • To bolster resources for compliance monitoring and enforcement, the DEA must give serious consideration to requiring all existing facilities in priority areas to pay a substantial annual licensing fee, rather than simply a once-off application fee.
    • Municipalities must take urgent steps to ensure the appointment and training of suitable Air Quality Officers, Environmental Management Inspectors, the development of AQMPs, and the incorporation of those plans into Integrated Development Plans.
    • The Departments of Mineral Resources and Health – and other relevant departments – must participate in the HPA process to ensure that air pollution from mining is reduced, and human health impacts are addressed adequately.
  1. To build trust in the integrity of the management of the HPA, and enable meaningful and informed participation by all stakeholders, there must be far greater transparency about regulation, monitoring, and compliance in the HPA:
  • Air emission licences for all facilities in the HPA with significant polluting emissions must require real-time emissions monitoring, and that real-time emissions data be publicly available online and on request.
  • The air quality monitoring station network must urgently be improved upon and adequately managed and maintained, so as to produce verified, reliable HPA air quality data that are readily and publicly available.
  • The DEA and all licensing authorities within the HPA must make all emission licences and annual emission reports submitted to them publicly available, and all licence-holders must be required to make these documents available on their websites and on request.

Download the full report and annexure

Download the executive summary

Infographic showing the health impacts of emissions from Eskom’s coal-fired power stations

‘Kusile costs could run 40x higher’

Dave Chambers, Times Live, 2 October, 2017.

Kusile power station, originally due to cost R80-billion, could end up costing South Africa 40 times as much.

An analysis of the costs of the coal-fired power station in Mpumalanga show the construction bill is a drop in the ocean compared with wider costs over the plant’s 50-year lifespan.

Pretoria University economics doctoral student Nonophile Nkambule said the costs included the plant’s effect on biodiversity, air pollution, greenhouse gas output, damage to roads, noise and water quality.

He put its total costs at between R1.449-trillion and R3.279-trillion, equivalent to between 91c and 205c per unit of electricity produced, with water the biggest-ticket item at around two-thirds of the total.

Even a conservative estimate of the lifecycle burdens of Kusile, near Witbank, “doubles to quadruples the price of electricity, making renewable energy sources such as wind and solar attractive alternatives”, said Nkambule.

He said about 77% of South Africa’s electricity is derived from coal.

On August 30 Eskom said it had brought Unit 1 of the Kusile power station into production, four years behind schedule.