So now we know. One of the reasons for retaining South African exchange controls is to ensure that enough money is available for investment in ‘a green economy and the move from coal to renewables and gas’.

That is the view of Leon Campher, chief executive of the Association for Savings and Investment South Africa (Asisa). He expressed it in a BizNews radio interview with Alec Hogg following the outrage when his association queried the recent announcement by the South African Reserve Bank that would have allowed 100% of certain retirement assets to be invested offshore, instead of the current limit of 30%. The proposals have been put on hold pending further investigation.

Defending his organisation’s support for [only] ‘gradual’ relaxation of exchange controls, Mr Campher worried that 100% ‘externalisation’ would leave the ‘green economy’ and ‘renewables’ short of investment.

Mr Campher might simply be scraping the barrel for arguments in favour of retaining exchange controls: there are few causes more fashionable nowadays than renewables, in the form of solar and wind energy. Which makes it odd that they need to be buttressed by exchange controls.

There is, indeed, plenty that is odd about renewables. The price of renewable energy is supposedly plunging, plummeting, and hitting rock bottom, yet renewables still require subsidies, while these plunging and plummeting prices somehow also manage to push up the price of electricity, even as it becomes less reliable.

‘Common climate emergency’

In September this year the British high commissioner in South Africa, Nigel Casey, wrote that the clock was ‘ticking’ in ‘our common climate emergency’. In an article headlined ‘How renewables can help SA’s economy recover from Covid’, he said ‘renewable energy costs have plummeted’. Mark Swilling, a Stellenbosch academic, wrote that renewables were the ‘cheapest and most reliable energy’, and that their ‘rock-bottom prices … are expected to continue to drop’.

If renewables are so cheap, it is odd that the French government, for example, has been handing out two billion euros annually to solar investors. It is also odd that one of China’s major solar companies recently said ‘solar power plant profits will drop below acceptable levels without government subsidies if glass makers go on to push up costs’ in the face of glass shortages. According to Bloomberg, solar developers in China are rushing to finish projects by the end of the year to secure state subsidies.

A recent IMF report, moreover, proposed a package that included 80% subsidies to ‘trigger’ renewable energy investment to help stave off the ‘potentially catastrophic’ implications of global temperatures ‘not seen in millions of years’. Mr Casey is worried that more than 100 million people along the West African coast will be displaced by rising sea-levels.

Here in South Africa, a manager at the Rosa Luxemburg Foundation last week argued on Daily Maverick that the cost of renewables had dropped by up to 80% since 2008, yet he favours tax breaks and cash incentives to encourage rooftop solar installation.

Good luck with that

Not to be outdone by the Rosa Luxemburgs of this world, Boris Johnson is planning twelve billion pounds in ‘government investment’ (that is, taxpayer subsidies) in his ‘green industrial revolution’, one of whose objectives is to ‘make the UK the Saudi Arabia of wind with enough offshore capacity to power every home by 2030’. Good luck with that. According to Andrew Montford of the Global Warming Policy Forum, two separate reviews of the accounts of the UK’s offshore wind fleet have shown that costs have been rising for the last ten years.              

Renewables can easily be made to look cheap if the costs of only the wind or solar plants are taken into account, other costs being ignored. Because the electricity produced by wind and solar is inherently unreliable, unpredictable, and unstable, the true costs include all the back-up system which must be on standby all the time to keep the power on when the wind and the sun are being disobliging, as they often are – very often, in fact. These extra, unavoidable, costs are usually omitted from assertions as to how cheap renewables are, rendering such assertions misleading if not meaningless.

Don Mingay, former professor of nuclear physics at Wits, recently pointed out that the ‘load factors’ of fossil fuels and nuclear were between 80% and 90%, whereas those of renewables were realistically between 20% and 30%. In other words, fossil fuels and nuclear are three times as reliable as renewables. It is thus misleading to claim that renewables are cheaper than fossils and nuclear when you need fossil fuels and/or nuclear to kick in when renewables kick out.  

Additional system costs      

According to Andrew Kenny, a South African energy specialist, all the additional system costs are in fact ‘by far the most important costs for solar and wind’. In an article on Daily Friend in June, Mr Kenny pointed out that ‘the more wind and solar, the more expensive your electricity’. Germany and Denmark, he noted, ‘with a big fraction of renewables, have the most expensive electricity in Europe’.

Other places which have seen substantial rises in electricity prices following shifts towards more and more renewables include Ontario and California. Several nuclear, gas, and coal plants having been shut down to promote wind and solar instead, California suffered rolling blackouts a few months back and had to import power from other American states.

In South Africa, Eskom is not only forced to buy the intermittent output generated by renewables, but must also bear the costs of providing the back-up, mainly from reliable coal, as best it can when the renewables conk out. For the producers of inefficient renewables, this is win-win. For Eskom and its customers, as well as taxpayers, it is lose-lose.

The only advantage of solar and wind is that they can be relatively quickly installed by the private sector. But it would be disastrous if South Africa were to regard these fair-weather friends as substitutes for fossil fuels and nuclear power.       

[Picture: Free-Photos from Pixabay]             

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30 COMMENTS

  1. Thankyou JKB for highlighting one of the most fictitious arguments to hit the MSM for many years. You are fully correct, the wind and solar generators cannot be relied upon to produce a baseload volume of electricity, i.e. that which is there at night and when the wind doesn’t blow. Even BoJo’s UK was forced to turning on three coal power stations last week to supply the needs of the nation.
    The other matter, which is conveniently forgotten by MSM is the legacy of the the renewables, the lifespan of a windmill is 20 years, after which the blades must be dumped, they cant be recycled because of the composition of the material they are built with, its not scrap steel or copper that can be sold to the local scrap dealer.

    • Throwing away the blades of a wind turbine after 20 years of use is still much better than dumping 1000’s of tons of CO2 in the atmosfere as well as all the ash left from burning a finite resource. Coal, oil and gas will run out and we cannot wait till then to tr and make a plan. If oil should become scarce just think of the implications. What are we going to build our world with? We use it to make plastics, build roads, make tyres for our cars, its used to make paint and cloths as well as insolation material for electrical equipment. When oil runs out and we do not have a working alternative the world is back in the stone age. Instead of promoting coal and oil start investing in ways to save renewable energy.

      • Increased concentrations of carbon dioxide increase photosynthesis, spurring plant growth. I understand that the children graduated in the school system in the USA and high school drop outs like Gretha does not know this, but why do you not know this?
        PS: Check out what Sasol did with e.g. sunflower oil. The world is not ending.

        • CO2 is constantly present in your bloodstream (on its way to your lungs). It is constantly being emitted by your lungs when you breath out. If that were not the case then you would not be reading this comment – you’d be dead. So no, CO2 is not bad in itself. It’s high concentrations of it that are supposedly bad. People protesting about too much CO2 production, should rather sow a seed and start growing a new plant at least once a day. Forget about protest – photosynthesise! I dare you Grethe. And don’t forget to ‘let the sunshine in’.

      • For some reason people forecast the future in a straight line. This very rarely leads to a correct forecast. There are cycles of innovation, etc.

        The Romans forecasted that Rome was growing too fast and that there would not be enough food to feed all Romans at, the then, growth rates. These forecasts were proven wrong.

        In New York, when horses were the main form of transport, people forecasted that at the growth rate of horses in New York at the time, New York would not be able to keep their streets clear of horse dung and New York would be buried by it.

        Books were written in England about their coal that would run out and destroy the industrial revolution.

        Our coal, oil and gas will never run out. If they start to become rare the price will go up and this will incentivise the market to produce something as an alternative. We are nowhere near this point. The Golan Heights probably holds more oil than Saudi Arabia. The oil price recently went negative in the futures market, this is not what normally happens when you are running out of a commodity.

  2. I read an article last week that it will take an electric car 38 years to become carbon neutral. The average lifespan of a car is 14 years and the battery in the car about 10.

    The real problem is the suppression of battery technology and the lack of investment in molten salt storage. I believe there is a project in South Australie by an Indian company that will build a smelter that will be powered by power generated by molten salt.

    • Sorry, but batteries are essentially CHEMICAL in nature. There seems to be a limit to the amount of power that it is possible (it’s probably quantum…) to store in any battery type that is currently in existence.And one STILL has the problem of generating enough ‘clean’ electricity to run a country.

  3. I just hope that someone is going to build a wind farm to protect us in Cape Town from the southeaster. It has been driving me crazy, and I would gladly pay a subsidy for that!

  4. Yes, molten salt does have reserve capacity capability, but still relies on solar energy to reach it’s operational state. So there goes the presumed base load capability, which currently is the primary reason why renewables still can’t be totally relied upon. So, how do we keep the lights on after dark on a calm, wind-free evening?

    • Molten salt can keep its heat for 7 – 11 days. Technology will get better. A well run coal fired powerstation is 34-38% efficient.
      To rely on renewables is not a single technology exercise but a combination of technologies. If we can cut the daily use of coal fired power by 50% through the use of renewables it would be a big step in the right direction.

  5. Oh dear, prepare to be shunned as a dinner party guest or invited to a braai by your acquaintances. Only your real friends will stand by you. Prepare to be chastised by mothers of young children, told that you cannot gainsay 97% of all scientists– and worse. For you have challenged the new religion, the sharp spear aimed at the soft underbelly of free enterprise societies by the green hordes of latter-day barbarians who used to be Red but find a new and easier home in environmentalism. But your bravery is commendable, so more power to your elbow.

  6. Patting themselves on the back, does the ((cough)) green ((cough)) electrical driver understand that their electricity comes from a fuming coal plant? Oh wait, they have their hair in a knot! What a world we live in..

  7. Listen, I had two solar geysers (300 liters) installed in 2008, before retiring, and it is the best R15 000 that I have spent. A combination of energy sources is essential.

    • John is talking about grid electricity. Renewable for households and renewable electricity for the national grid are two totally different things. People simply do not understand the difference. And the difference is huge. The price of the electricity generated from wind and solar is catastrophic for the economy and for job creation.

      • Not to mention Green Energy is a marketing fudge-term. The environmental impact from especially wind power is devastating, and the batteries still need to be manufactured from mining processes.

        A mix of energy sources is the optimal way to go, with nuclear being a no-brainer unless you are a watermelon (green on the outside, red on the inside) and not really concerned with the environment.

      • Point well made. It is interesting how often the Daily Friend writers use logical fallacies in their arguments. The one Sara is using here is the Nirvana Fallacy – i.e. don’t do anything because we currently don’t have a perfect solution.

      • Any ‘green’ power source that cannot produce enough power over its lifetime to make a copy of itself is basically useless.

  8. There is no wonder batteries in the future in sight. Just be sure of that.
    15 December the e-car is loaded…Cape Town here we come. Head wind. Heavy traffic. Kroonstad first refilling point. All the stations are occupied we are nr 5 in line. 40 monutes for 80% charge!!!!. Two hours later … Bloem here we are. Colesberg is too far away. Off with the aircon, off with the radio…..
    And so on and so on… Divorce…child murder… HOLIDAY CANCELLED. two day later back in Jo burg????

  9. The whole idea of “Green” and “Clean Energy” is simply another way of ensuring that the Global bankers and Corporate Financial investors can continue to loot the fiscus. It is the biggest scam and environmental fraud of modern industrial time.
    The covid19 one is even bigger scam, its a medical scam also being introduced on behalf of the GigaRich by the same Global bankers and Corporate Financial investors

  10. If you read the book Apocalypse Never by Michael Shellenberger you will realise why environmetal alarmism hurts us all. There are a lot of half truths and outright lies being told by environmental alarmists and their lobby groups. As some of the other commentators says, follow the money and you will find out what and why they are doing it.

  11. This article is misleading. If you want to really get the reason for cost differences you need to much deeper. The devil is in the detail. Germany at 0.38 USD/kWh deliberately adds other costs into their power price. Why not compare with Costa Rica which is over 99% renewable, but with a power cost at 0.155 USD/kWh – much the same as South Africa. This is not good journalism. You should be looking at more detail and outliers on both sides as well as reasons for them. The information is out there. I suggest that you dig and understand it properly before you write an article like this.

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