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Alternatives to drive SA’s energy mix for optimum development

The raging debate over the suitability of nuclear energy is typical of South Africa’s flawed approach to energy policy. We are driven by desperation to consider alternatives rather than being proactive and acting strategically to optimise outcomes.

The Eskom debacle has forced the government to consider other options such as gas in addition to nuclear – just like the sale of state assets is driven by the need to bail out Eskom rather than economic policy. Invariably, we ask the wrong questions and then proceed to provide the most precise answers to them.

The strategic energy policy question is not whether nuclear energy is better than renewable energy or vice versa. The question is: what is the optimal energy mix for South Africa that will best address our economic development challenges? Any optimisation problem relies on the formulation of the objective function and the constraints imposed on it. While some are fuzzy on the objective function, they seem clear that we can either have nuclear, wind or solar, and nothing else.

My argument is that there are other alternatives to be considered in the energy mix. Firstly, the strategic envelope for the analysis of our energy policy should be the Southern African Development Community (SADC), not the Republic of South Africa, given that there are significant energy sources outside South Africa, with South Africa being a massive energy sink. The DRC has hydro energy resources, Botswana has coal resources, Mozambique and, to a lesser extent, Namibia have significant natural gas resources. It is also unclear why our own coal resources are not in the future energy mix, given our relative size to massive coal burners such as China and India.

Back to the objective function: what do we want to achieve through our energy policy? The goals of an energy policy should include competitively priced energy, energy security, supply stability, minimal environmental impact, employment creation, and positive transformative impact on the overall economy. One could use the current energy mix as a base case to compare alternative mix options, including all the energy sources mentioned above.

We have not even considered importing Liquefied Natural Gas (LNG) as an alternative or local hydraulic fracking. We could divert all our thermal energy demand to LNG and simultaneously use LNG to provide feedstock to the PetroSA GTL plant. That would reduce our electricity demand and also make sure we sweat an existing investment at the Mossgas plant.

At face value, it seems a nuclear plant investment will have less positive transformative effect on the overall economy.

We need a breath of fresh air in this energy policy debate. This is too important an issue for South Africa’s future to be driven by sector specific interests.

Source: IOL


 

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Clean, renewable power makes good business sense

By Edna Molewa

In December last year, one of the largest solar energy plants in Africa was connected to the national grid. The Sishen Solar Energy Facility will have the highest level of electricity output of all the operational photovoltaic plants in Africa — an equivalent of 100,000 households’ consumption.

Its significance lies in three “Cs”: construction time, cost and carbon footprint.

Despite its size, it took 16 months to build. The cost of the facility is about R2bn — versus an estimated R91bn for an average-sized coal-fired power station.

Clean energy will be used at the plant. According to Acciona Energia, the technology being used at the facility will avoid about 208,000 tonnes of CO² emissions.

The plant came online as the Council for Scientific and Industrial Research (CSIR) released the results of a study into the increasing financial benefit of renewables in SA. It found that energy from SA’s (first window) wind and solar (photovoltaic) projects created R800m more financial benefits to the country than they cost during 2013. This amounted to a financial benefit of R3.7bn in diesel and coal fuel cost savings.

These figures give pause for thought to naysayers who argue that renewables are light years away from achieving the baseload capacity needed. If one considers that these first projects have generated about 3,922MW of renewable power — with an additional 4,000MW expected to go online by the end of the next window, what has been achieved is impressive.

Developing baseload should and does happen incrementally — and over time. Our achievements are all the more impressive if we take into account that this has taken place over a mere two and a half years.

Renewable energy is becoming cheaper, faster and cleaner.

Bloomberg New Energy Finance forecasts that the growing need for power in Africa will see about 1.8GW of renewable energy capacity being commissioned in the region this year — more than the amount that came online during the past 14 years combined.

With or without subsidies or incentives, renewable energy sources retain a competitive advantage over fossil fuel sources.

Technology costs are also falling.

Over the first three project windows in SA, prices have steadily dropped; with photovoltaic tariffs decreasing by about 68% and wind dropping 42%, in nominal terms. By the fourth window, they are expected to drop even further.

According to the CSIR, the cost per kilowatt hour of renewable energy for new projects is now far less than R1 for solar photovoltaic and 60c-80c for wind projects — thereby “keeping the net financial benefits of renewables positive, even in a future with a less constrained power system”.

Unlike many other countries, there is no policy or regulatory uncertainty. In last year’s state of the nation address, President Jacob Zuma emphasised the importance of a sustainable energy mix.

The Integrated Resource Plan clearly outlines the vision for a sustainable energy mix for SA that includes the use of fossil fuels, renewables, alternative energy and nuclear. It is a vision further supported by the National Development Plan.

In a Guardian Sustainable Business article last year, analysts cited SA as a “good role model on renewables” because of its competitive tendering process that both “align(s) with the long-term goals of government and also creates sustainable jobs locally”.

Although the World Bank has noted that renewable energy projects have resulted in improvement in economic development commitments, particularly as this relates to benefiting rural communities, those responsible in the public sector should ensure that this translates into real benefit for South Africans: both in terms of job creation, as well as localisation. As local renewable energy projects steadily increase their contribution to stabilising the grid, several businesses, among them several JSE-listed firms, are producing their own energy, much of it produced as part of industrial processes, such as sewage processing, sugar refining and paper making.

They are working with us, as the government, as co-generators of energy through the Renewable Energy Independent Power Producers Procurement Programme.

For example, sugar giants Tongaat Hulett and Illovo produce energy from sugar bagasse and trash at their milling plants.

Paper producer Sappi uses pine-tree resin removed before the pulp-and-paper production process to fuel boilers that supply steam to its turbines, enabling the company to meet about 50% of its own energy needs. Companies are able to sell the surplus to Eskom by means of power purchase agreements.

Others are reportedly researching biogas. A local company, Bio2Watt, is already generating energy from methane collected from waste at one of the country’s largest feedlots. These businesses are innovating in response to the collective energy challenges we all face: taking the lead in investing in their own energy in ways that are both cost-effective and green.

Their initiatives should be both welcomed and emulated.

We, as the government, are not far behind. Late last year, Zuma opened Environment House, the Department of Environmental Affairs’s new headquarters.

Not only does the building harness solar energy, it has state-of-the-art water-saving mechanisms, as well as an onsite grey-water treatment works — setting the standard for the type of government buildings that we hope to have in the future.

The Department of Public Works is tasked with the implementation of the government’s Energy Efficiency Programme in all government buildings. This will see, among other things, existing buildings being retrofitted.

Although not all sectors are able to generate their own energy, we are leading by example.

Because, ultimately, energy saving is everyone’s responsibility.

Independent generation using clean energy sources makes business sense. It is cost-effective, reduces uncertainty caused by often unpredictable power cuts, and reduces demand on the national grid.

As lack of access to stable electricity continues to hamper economic growth in Africa, renewable energy holds immense transformative potential.

The climate is ripe for this kind of investment. The number of renewable energy investments SA has attracted in the past three years outstrips those undertaken across the entire continent in the past 20 years.

The International Energy Agency predicts the sub-Saharan African economy as a whole could be boosted by as much as 30% by 2040 under certain conditions, namely greater investment in the power sector, more co-operation on cross-border energy projects, and better resource and energy revenue management.

Addressing this country’s energy challenges that we collectively face requires lateral thinking, innovation and vision.

Falling global oil prices should not delay a transition to cleaner energy, by putting low-carbon projects on the back burner in favour of traditional coal-and diesel-powered electricity.

Working with the private sector, we ultimately aim for such innovative renewable energy initiatives to become mainstream — so that they become the norm, as opposed to the exception.

Molewa is Minister of Environmental Affairs.

Source: BDayLive


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SA’s long-term nuclear plan no solution to country’s short-term energy needs

South Africa’s national power grid will once again come under tremendous pressure this month as businesses and schools reopen after the holiday season, and will see electricity demands increase significantly. This follows the rolling blackouts experienced last year because of Eskom experiencing problems at its power plants and an ageing power system.
According to Vice President of Talesun Energy, Arthur Chien, the recent signing of a nuclear power cooperation deal between South Africa and Russia, which has been touted by many as a potential energy solution, is not a solution as this is a long-term strategy for the country. He says it is crucial that renewable energy projects are fast-tracked nationally, in order to counter electricity shortages in the short-term.
Chien explains that the construction of a nuclear station can take anywhere from five to seven years, whereas a wind farm takes about six months and a solar farm would take only 16 weeks from start to finish depending on its size.”South Africa’s electricity crisis was recently highlighted at the Medium Term Budget Policy Statement in October 2014 as being one of the main factors hindering growth and investments in the country and is largely the driver behind the recent signing of the nuclear power cooperation deal between South Africa and Russia to build up to eight nuclear reactors.”

Talking millions and billions

However, he says that nuclear power is not economically viable due to high costs needed to construct and maintain plants. “The cost to build a nuclear power station varies in each country. In the United States for example, a nuclear reactor could cost around $10 billion and repairs can also amount to millions of dollars. At the Palo Verde Nuclear Generating Station in Arizona in the US, last year, a leak inside the reactor cost $10 million to $15 million to repair. Solar farms on the other hand, are far more economical as the cost to build ranges between $300 million and $500 million and all that is needed is a large piece of land which receives a vast amount sunlight.”

Furthermore, Chien says that the running costs of electricity generated by a nuclear power plant are far higher than electricity generated from photovoltaic solar energy, as nuclear power plants run throughout the day and night, and according to the Brookings Institution, an American research NGO, they are 75% more expensive to build and run per MW of capacity than a solar-power plant.

Therefore continuing to operate nuclear plants prevents the large-scale integration of renewable energy into the electricity grid.” Chien refers to research conducted by Greenpeace, which states that nuclear also channels investment away from renewables where investment can make a difference in fighting climate change and that renewables can replace several times more of the carbon that is leading to climate change – for the same cost as nuclear and at a far faster pace.

Health and environmental risks

Chien adds that the health and environmental risks associated with nuclear power are also extremely high, especially for those who work in and live in close proximity to plants. “Nuclear power produces toxic waste which can be detrimental to people’s health, as well as the environment. Furthermore, the risk of a nuclear accident like that of the Fukushima meltdown exists and it is crucial to consider because of the effects, including increased levels of radiation in the area and contaminated food and water.”

In addition, he points to the issue of nuclear waste, which is created from the use or reprocessing of nuclear fuel. “This is difficult to dispose of and special remote areas have to be located and designated in order to dump the waste, whereas solar panels can be recycled. The cost to recycle solar panels is often included in the overall cost of the installation of solar panels, but this is not always the case when it comes to the disposal of nuclear waste.” Further, he says that as nuclear waste is able to remain radioactive for either a few hours or thousands of years. Chien says that there’s no wonder why countries such as Sweden, Italy, Belgium and Germany have started to phase nuclear power stations out, and countries such as Austria and Spain have enacted laws to cease construction on new nuclear power stations.”The recent 2014 World Nuclear Industry Status Report notes that the use of renewable energy will increase rapidly and that investment in renewable energy will prevail and will ultimately surpass investment in fossil fuel power stations and nuclear power plants.

“An indication that South Africa is heading in the right direction to overcome the energy crisis by means of an environmentally friendly, safer and more economical way, includes the rollout of Kalkbult solar plant in the Northern Cape, a Renewable Energy Independent Power Producer Procurement Programme project, which can already produce enough electricity to be consumed by approximately 33 000 households, lessening the carbon footprint in the area,”

Source: Bizcommunity


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