“Take the knee!” and “No electricity, no vote!” have been the headline slogans on the eve of the local elections tomorrow. I’ll deal with the latter now.
This week there has been a cascade of electricity calamity and electricity nonsense. There was bad news recognised as bad news, and there was bad news hailed by our ignorant mainstream media as good news. A large number of units at big Eskom stations broke down, taking out over 14,000 MW of power (total demand is about 34,000 MW). This caused Stage 4 load-shedding, and much anger and political recrimination. Furious voters at Ekurhuleni threatened President Ramaphosa they would not vote ANC unless they got electricity. He replied they might never get electricity again unless they voted ANC. The breakdowns were caused by the usual Eskom incompetence, dilapidated machines, poor maintenance and lack of capacity, and compounded by electricity theft and overloaded transformers. In a briefing on Friday, Eskom said that load-shedding would be suspended until after the elections on Monday.
On Thursday, the energy minister, Gwede Mantashe announced the 25 winning bids in Round 5 of the Renewable Energy Independent Power Producers Procurement Program (REIPPPP). These projects, which should be completed in three years, will add a total of 2,583 MW of capacity to our grid. We desperately need reliable electricity – dispatchable electricity, which can be delivered when it is needed. How many MW of dispatchable electricity will all 25 of these new REIPPPP units deliver? None. Zero. To be blunt, they are useless.
The only solar or wind technology that can deliver dispatchable electricity is Concentrated Solar Power (CSP) with storage. There are no CSP plants among the winning bids. This is because they are very expensive. The winners are either wind turbines or solar photovoltaics, which can only deliver unreliable, intermittent electricity. To turn this into useful electricity is very expensive, and Eskom will be forced to pay these costs – while the REIPPPP suppliers just collect the profits, which is why bankers love them. A small mercy is that the cost of this unreliable electricity has come down from 217 cents/kWh in previous REIPPPP rounds to 47 cents/kWh in this one. The costs of converting unreliable electricity to reliable electricity is least 200 cents/kWh. This means that the total costs to Eskom of Round 5 will in reality be about 247 cents/kWh, over double Eskom’s average selling price and about six times Koeberg’s costs.
This did not stop our mainstream journalists and all the greens acclaiming Round 5 as a triumph for the “just energy transition”, with South Africa at last following progressive nations in moving from fossil fuels and nuclear to solar and wind. The fact that this move has brought disaster to every country that has tried it, as you can see with soaring electricity prices and disruption in Western Europe, does not bother them at all.
Both Marxists (including some of our trade union leaders) and capitalists (including some of our businessmen) misunderstand the economics of electricity supply. I support the free market. I believe that a good private provider is nearly always better than a good state provider. One exception is electricity supply, simply because power stations need a lot of capital, and the costs of capital are always lower for the state than the private sector. In a free market no Independent Power Provider could compete with Eskom if it were well run. The trouble is it isn’t. The Marxists are wrong to think that the state is always more benevolent than greedy capitalists pursuing profits. It isn’t. Adam Smith explained why two centuries ago. Our energy supply is a strange and incoherent mix now, with a failing state provider and increasing numbers of independent providers who want the market rigged in their favour (without which wind and solar are not viable).
There was a strange episode between Eskom and City Power. City Power said it had obtained access to 220 MW of power from the independent Kelvin Power Station and therefore it should be excluded from some Eskom load-shedding. Pardon? We’ve got some power of our own, therefore Eskom must give us more?
The CSIR, which seems mainly responsible for our suicidal Integrated Resources Plan 2019 (IRP2019), has just brought out a glossy “Consultation Paper” condemning the proposed new 2,500 MW of nuclear power, our only real hope of affordable, reliable electricity in the future. Instead, it presses for its “least cost” option of solar, wind and gas, which is almost exactly the option that has caused the “greatest cost” to Western European energy supplies right now. The CSIR looks at computer models not at the real world.
Tomorrow I shall vote for the DA, which has delivered pretty good services to Cape Town, as Steenhuisen rightly boasts about. I don’t like their energy policies, which are green and woke and antagonistic to Koeberg, our best power station. However, they do run the 180 MW pumped storage station at Palmiet well, and I am happy with my household electricity supply here near Fish Hoek. My prepaid meter works accurately, easily and well. I’ve got no complaints about my electricity billing. Friends in Johannesburg tell me otherwise about theirs.
The views of the writer are not necessarily the views of the Daily Friend or the IRR
If you like what you have just read, support the Daily Friend
____________________________________________________________