As if nuclear power in South Africa did not have enough problems with its enemies, it has now acquired the worst possible friend: Julius Malema.

If we lived in a rational, selfless world, the choice of energy for our future electricity would be clear. We should choose the safest, cleanest, most reliable, sustainable, economic energy. But the real world is irrational and selfish, and so we choose on ideology, politics and vested interests. South Africa faces an uncertain energy future because Eskom has been wrecked by corruption and incompetence, and because our new electricity sources are being chosen by green ideology and renewable energy interests. This wretched scene is made worse by trade-union lobbying, political factionalism and – alas! – the racial divide. Our present is the awful mess of Eskom. Our possible future is the dreadful IRP 2019 (Integrated Resources Plan 2019), a sure recipe for failure.

It is unfortunate that electricity is being used as a battleground between nationalisation and privatisation. Electricity supply is one of the few areas where the state can outperform the private sector – for the simple reason that its cost of capital is lower and it is satisfied with a lower return. Eskom used to outperform every private electricity utility on Earth. Proponents of private electricity suggest it will solve the country’s electricity problems, but every existing IPP (Independent Power Producer) makes more expensive electricity than Eskom. Private supply is now associated with ‘renewable’ energy (here, meaning solar and wind), which is very expensive all round the world. This gives the private sector a bad name. Julius Malema and his like have pounced upon this.

Under our ruinous REIPPPP (renewable energy programme), Eskom is forced to buy extremely expensive renewable electricity, locked into 20-year contracts. It must pay 215 cents/kWh for this unreliable electricity when its own average selling price is about 89 cents/kWh. The comrades in the ANC and the unions are making capital out of this. An even bigger problem for renewable electricity is the system costs, the enormous costs of integrating the unreliable renewables into the grid. This is why electricity costs rise as you add more renewables to the grid, and why Germany and Denmark, with a high fraction of renewables, have the highest electricity costs in Europe.

Racial ideologues now say that coal and nuclear are ‘black’ and wind and solar are ‘white’. The ANC, the EFF, the SACP and the unions favour state control. The ANC, which is mainly black, controls the state, the state controls Eskom, and Eskom runs coal and nuclear stations. The private renewable energy companies are run by whites, including the foreign companies. The ‘greens’ are mainly ‘white’. The black ideologues believe – rightly, I think – that white-owned foreign renewable companies are screwing the people of South Africa with their very expensive electricity.

Nuclear power is the worst victim of this battle. Nuclear is the safest, cleanest, most reliable, most sustainable source of energy we know, and very economic. Koeberg is our best performing generator. President Zuma, presiding over the most corrupt era of ANC rule, was probably trying to get some sort of nuclear power deal with the Russians from which he expected corrupt benefit. The Russians, who make superb VVER nuclear power reactors, are cynical on matters where diplomacy and commerce overlap, and would probably have gone along with any government-to-government deal. Our constitution would never have allowed any corrupt deal.

Free, open, transparent tendering on the world market to build new nuclear power in South Africa would have killed all speculation about a secret Russian deal, and would have revealed the true costs of nuclear power. The preliminary stages were begun by the Department of Energy. First there were Intergovernmental Agreements (IGAs) with various nuclear countries including Russia. These would have been followed eventually by invitations for commercial bids to vendors worldwide to build plants here. This process was stopped by the Western Cape High Court in April 2017. An action had been taken by Earthlife Africa and the SA Faith Community to find the IGAs unlawful. The judge found in their favour, on the grounds of incorrect procedures. The effect of the ruling was to stop open, competitive bidding. It prevented South Africans from knowing the true costs of nuclear. It seems some people were fearful that nuclear might be shown to be too affordable.

A modest nuclear expansion, building two units first, financing them on debt (which Eskom has done successfully with coal stations in the past), then building two more, and using the revenue from those in operation to build more, would have been our most affordable path to sound future electricity supply. This was killed by politics, green vested interests and Zuma’s murky presidency.

Last week Julius Malema handed a memorandum to the Eskom CEO, Andre de Ruyter, saying that ‘Eskom should build nuclear power stations … ‘

Oh dear!

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10 COMMENTS

  1. Great Article Andrew Kenny,
    I agree Nuclear is the way to go. Unfortunately the corruption potential with the current (excuse the pun) is the caveat. I is far too much of a risk. It would become another ANC ATM. The problem with the renewables as you correctly state is the issue of trying to make them part of the grid which is a on demand basis and depends on despatchable resources that can be called for at short notice. The fact is they were never designed for grid deployment as they are intermittent and cannot produce on an as and when needed basis so are non-despatchable so are unsuitable for grid deployment. They are in fact serious risks for a stable grid.
    The IRP 2019 is based on a political policy. I Quote form a statement by Irena. “Renewable power is the backbone of any development that aims to be sustainable. We must do everything we can to accelerate renewables if we are to meet the climate objectives of the Paris Agreement.” It is a UN political agenda. All the political objectives and slogans are there.
    The Integrated Resource Plan (IRP2019) mandates of the state energy mix demand that Renewable electricity form part of this requirement. It is all fair and well if they are comparable generators but they are not.
    Renewables do not meet any of the specifications that form the fundamental detachable requirements.
    So now in order to make renewables appear to be a true electricity generator the Energy and Enterprise ministers in conjunction with the rent seekers of the renewable industry have come up with a new demand. The battery storage scam.
    I quote from compendium of energy transition who succinctly describes the issue – ‘A veritable political-economic complex has grown up around the renewable energy sector…All the actors in this complex share an interest: the problems of the energy transition movement must appear solvable, so that the wind and the solar industry can be further subsidised’
    Back to the battery storage scam.
    Wind and Solar plant developers try to appear to be electricity market players by focusing on and publicly emphasising their contribution to efficient low-cost green and clean electricity when in fact the only aspect available to them, the energy generation component. Wind and solar power are the intermittent freeloaders on the electricity grid. They are treated as if they’re generators, adding power to the grid, but instead they provide something the grid doesn’t need – power that can’t be guaranteed. They cannot produce on demand, when they do produce is usually not needed. They still need the support of conventional generators to back them up when they can’t produce. Solar panels and wind farms are parasitic to the grid. They do not provide on demand electricity.

    That is reason that the battery storage has been adopted is to try and change this issue and they are hoping that this will resolve the issues, Electricity storage to meet the demand of despatchable electricity and to solve the intermittent nature of renewable wind and solar that make it unsuitable for stable grids. And then they hope to reduce dependency on Eskom for back up when the sun doesn’t shine and the wind doesn’t blow. It has not worked anywhere and is an R&D experiment at the expense of the Tax-Payer.

    The undisclosed issue is that Eskom has to fund the battery projects at the Tax-payers expense as it is too expensive for the IPP’s to provide.
    It would blow them out of the water if these costs were added to the PPA’s. It would increase the price of the electricity anything between a factor of 15-20 on the existing price of the electricity that they would need to be paid to recover.

    So the sleight of hand is for Eskom to provide the battery storage for them at the Tax-Payers expense. It is now added to the already huge Eskom debt adding to the spiral collapse of Eskom forcing further bail outs by the Tax-Payer.

  2. Andrew normally writes sense and if SA was starting with a clean slate, his arguments would be strong.

    However:
    • the current state of Eskom’s coal-fired generators makes them more unreliable than fickle wind systems
    • Eskom and the ANC seem locked into a “big is beautiful”, one-basket-for-all-eggs mentality. While theoretically plausible and salving to prestige-project needing egos, they are unacceptably high risk.
    • the arguments against “green” alternatives do not factor in the “externalities”, death and illness from air pollution, fossil fuel depletion and so on
    • there is a vast fleet of alternative supply waiting in the wings. As load shedding has progressed, more and more households have installed solar and businesses, landlords and households have installed generators. The cost of these has been spent and, unlike a new Eskom generator, does not have to be costed. That is, the solar panel owners would be happy to recover their “sunk” costs while generators only need recover operating costs. If these are uneconomic, taxpayers will not carry the cost.
    • load shedding carries an enormous cost which allowing alternative supplies would alleviate. These costs include
    ‣ loss of revenue to Eskom and municipalities redistributing Eskom electricity
    ‣ transmission equipment failure. After every load shed, one hears of substations and mini-distribution units failing. They are not designed for outages (and are old and ailing, thanks to ANC neglect)
    ‣ power surge damage to electronic equipment.
    ‣ massive imports of diesel by Eskom (allegedly through parasitic middle-cadres) and private generator users
    ‣ imports of rechargeable lamps, generators, batteries and other “load shedding meliorating” items.
    ‣ loss of revenue by business and increased callouts for security companies (hence less taxes for the state)
    ‣ increased costs of battery replacement and theft, especially by the mobile-telephony sector but also for gate motors, etc.

    • A vast fleet you say. It is more like a vast raft of con artists. Talking about fickle, Load factor of the renewables raft was 31.5% compared to the Eskom coal fleet with plant utilisation Plant utilisation (EUF) was 71.64%.
      You ignore the fact while there may be as you put it “a vast fleet of alternatives” are available they are simply of no use to Eskom who provides despatchable generation. It needs to maintain grid stability. The alternative, other that of OCGT’s, provide non-despatchable electricity which essentially has no commercial value for the very simple reason that it cannot provide Eskom with a source of electricity on an as and when needed basis.
      The other fact ignored is that for Eskom to try and manage this intermittent fickle trickle and integrate it, results in a major destabilisation of the grid, thus increasing the risk of load shedding. Simply put Variable unreliable intermittent sources are actually parasitic to the Grid. The unstable and unpredictable nature that cannot be called on is simply of no use to Eskom. It is what is essentially creating the instability. You also ignore the fact that Eskom has to ensure that there is sufficient backup capacity available to cater for the unpredictable behaviour of renewable technologies such as wind.

      • You need to look at what has happened in Southern Australia. With a renewable component of greater than 60% (and three batteries), they were were able to keep the grid stable and up and running for two weeks when they were islanded when a tornado knocked down 6 pylons and they lost their connection to Victoria running full tilt exporting 1 GW. Some solar shut down, the batteries cut in and the grid stayed up. The new type grids are robust and improving all the time. All engineering solutions do not have to stay locked into yesteryear’s technologies. The Hornsdale big battery is estimated to have saved almost twice its capital cost in the first two years of operation. I see no reason why they do not go out to tender now for storage plus generation. Recent prices around the world are less than Eskom’s current generation costs. A solar plus wind plus storage is providing a good mix.

  3. Nuclear is not the cleanest most efficient or safe. It’s the most dirty, you only feel the dirt years later when U have to dispose of the old materials, or you have a malfunction. Eskom and state power barely maintain the simpler coal power stations… What then. Shudder to think. Clean power doesn’t have to be expensive anymore! It can done affordably. Also saying it is unreliable is outdated with improved and ever improving tech. Also… the hell with all politics, politicians and the management at Eskom.

    • The ‘dirty’ (as you call it) residue of radioactive waste is small, compact, and capable of being buried somewhere safe (Vaalputs?) until we can figure out how to reprocess and get the remaining energy out. The residue of dead solar panels (lifespan < 20 years) and wind turbines (lifespan 30 years (unless they're at sea)) cannot be reprocessed and requires burying. And one thing that never seems to be publicly mentioned in regard to 'green' electricity is the need for grid stabilisation – keeping the AC current at a steady 50 Hz. Australia, with a number of wind farms, is already paying special generators large sums to keep the frequency. In Germany and the UK, the grid controllers have to continually balance out all of the power suppliers – both the renewable and the reliable.

  4. Your Independent Producer costs given are misleading
    Costs were for Bid windows 1;2;3;4 Averages
    Solar PV 3.65; 2.18; 1.17; 0.91
    Wind 1.51; 1.19; 0.87; 0.75
    CSP 3.55; 3.32; 1.93; –

    Costs have gone down with each bid. The reason why the average renewables paid now is so high is because the Bid 4 projects are not yet on stream because of political inertia holding back the order placement for two years. Bid 5, if it ever gets off the ground, is expected to come in between 0.4 and 0.5 for both wind and Solar PV. This is a lot less than Eskom can generate for, except on the already depreciated Koeberg.

    Comparing with Eskom average price is also misleading. There are different rates for different times of the day, and different times of the year. CSP is the the most expensive up to R5/kWh – but that is only during peak. Still more than the peaking plants at about R3.50 /kWh but the idea was that the renewables would start high and each bid would bring them down. Which has happened as one can see from the bid prices. Solar PV only generates during standard and peak times where Eskom recovers more than the average rate. The bid 4 wind rate is significantly less than the cost of generation from Medupi of at least R1.20 /kWh.

    New nuclear is expensive. I have seen estimates of Hinkley point coming out around R1.5 /kWh, which is the number Eskom previously gave for nuclear. This price is unlikely to reduce unless the new proposed modular reactors, which still have to be built, approved and tested, come into fruition.

    • Thanks for the information Bruce,
      The figures Andrew is quoting are based I think on the information from the Eskom 2018/9 integrated report.
      This is Excerpted form that report.
      Eskom purchased 9 584GWh from IPPs at a cost of R21.3 billion during the year (March 2017: 11 529GWh at R21.7 billion), at an average cost of 222c/kWh (March 2017: 188c/kWh)

      However , The issue of Renewables remains a political issue. The concept of an “energy mix” is also political as it is based on the DoE who produces the IRP.
      I commented earlier above:
      The Integrated Resource Plan (IRP2019) mandates of the state energy mix demand that Renewable electricity form part of this requirement. It is all fair and well if they are comparable generators but they are not.
      Renewables, specifically wind and solar do not meet any of the specifications that form the fundamental of despatchable electricity requirements.
      Eskom is forced to comply to the policy decisions of the DoE.
      The issue that is ignored is the fact that the renewable problem is at the heart of the load-shedding issues that we as consumers and tax-payers are being subjected to. They are a huge issue for the Eskom who have to comply and in so doing are now having to deal with the issue of intermittency.
      One of the hardest technical jobs the grid and power station operators face is that at any given instant the power they are generating must exactly match the power that is needed. The wind and solar industry are treated as if they’re generators, adding power to the grid, but instead they provide something the grid doesn’t need — power that can’t be guaranteed. It is based on the idiocy that renewable solar and wind are compatible with Eskoms grid. They are not. Wind and solar power are therefore in fact a serious energy security risk because they are intermittent and thus unreliable.

      Intermittency adds a very substantial layer of costs that Eskom are forced to absorb, these costs should in fact be charged back to the renewable producers.
      Cycling of the coal fleet- Power plant cycling results in more fuel being used for every MWh generated
      Providing a back-up for when the wind isn’t blowing and the sun isn’t shining
      Increased cost to manage the variable input.

      Again I quote from the Integrated report.
      DoE policy requirement to sign long-term power purchase agreements (PPAs) with IPPs.
      IPP production is driven not by demand, but by contractual terms.
      This translates into greater non-dispatchable capacity being made available to the electricity grid, thereby affecting grid stability and exacerbating operational challenges. The decision to sign the PPAs with IPPs also has significant implications for our financial sustainability, with IPP power – which is more expensive than the current average cost of Eskom power – being purchased ahead of Eskom’s offering.

      So the price may be falling, yes but the issue of unreliability and intermittent nature is causing an increased cost to Eskom. It is also the cause of massive price increases in electricity prices and is putting the country at massive risk.

      Who pays for this, the consumer and tax-payer bailouts.

  5. Hi John. I understand that intermitttency is a tension to be managed. Pumped storage schemes help to manage that. But when Eskom is loadsheds during the day on a weekend it is not a renewable intermittency problem – they are flat out of capacity. The CSP helps intermittency because it delivers during the evening.
    Forecasting is used to assist managing wind intermittency. I was told by someone that helped with the SA Wind Atlas that South Africa has a high diversity factor which is in our favour. Big batteries make big difference in managing the problems. Here is a link describing the Hornsdale success. https://reneweconomy.com.au/how-the-tesla-big-battery-has-smoothed-the-transition-to-zero-emissions-grid-35624/ At the moment there are more than 10 batteries > 100 MW on order.
    For interest big batteries are not new. I toured the battery power station in West Berlin during the Soviet era. If memory serves me it was a 5 MW unit using lead acid batteries. Expensive, but they kept it running in case the East decided to suddenly cut the supply.

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