Why are we still building coal power plants?

2011-11-02 07:40

I recently wrote about the hidden costs of electricity generated by coal (and nuclear) power plants. While my arguments were based predominantly on North American and European research, I was confident that they apply equally to us here in South Africa, a country that relies on coal-fired power plants to produce more than 90% of its electricity. Now a new local study has confirmed them.

Last week, Greenpeace released a report it commissioned from the Business Enterprises unit at the University of Pretoria. The authors were asked to estimate the “external” costs of Kusile, one of the two new 4 800 megawatt coal power plants Eskom is busy building. Their results are rather disturbing.

The price at which Eskom currently sells electricity to you and me - R0.52 per kilowatt-hour (kWh), on average - does not include a number of costs, such as the damage coal mining and burning does to the environment or human health. While they are not taken into account in calculating the price of electricity, somebody has to pay for these so-called “externalised” costs eventually. That’s you and me, either directly, or through the taxes we pay to the state. It’s these ignored costs that the report’s authors were asked to calculate for the case of Kusile.

Taking into consideration that Kusile will be equipped with the latest technologies to reduce pollution and water use, the study considers the otherwise unaccounted for impacts the plant will have on climate change, human health and water resources. It also evaluates a number of mining-related external costs, but ignores several others and therefore arrives at what its authors consider a conservative estimate.

For every year it will be in operation, Kusile will cause external damages costing between R31.2 and 60.6 billion. Converted into an electricity price, this is the equivalent of R0.97 to 1.88 per kWh. In other words, if the externalised cost of producing electricity at Kusile were added to the current market price, we’d be paying as much as R2.40 per kWh. And these are only the unaccounted for costs of one new coal power plant. They don’t include those which will accrue from Kusile’s twin, Medupi, which is under construction in Limpopo.

If we were to invest just 30% of the money we will have to pay for the external damages Kusile will cause in renewable energy technologies, the report goes on to demonstrate, we could construct wind and solar power plants with an installed capacity of “no less than 500% of Kusile’s”.

Given these conclusions, it’s patently absurd to be building new coal-fired power plants. So why are we doing precisely that?

Government and Eskom’s claim, that coal is South Africa’s cheapest option, cannot be anything but an extremely short-sighted answer - they are perfectly aware of the magnitude of coal’s external costs. The blame for our continued coal-fired madness needs to be laid at the door of those who shape our national electricity policy to suit their own blinkered interests.

Renewable energy sources have the potential to radically decentralise our electricity supply. Any company can erect wind turbines and any farmer can install solar panels on his barn roof to convert the sun’s energy into electricity. But that’s not a happy scenario for Eskom. With its virtual monopoly on electricity generation and distribution, and its overriding motive for a profitable bottom line, the power utility prefers centralised mega power plants to a democratically-distributed renewable energy free-for-all. A continued commitment to gigantic coal plants guarantees short-term profits and control over the national electricity game. Consequently, most 10-year-olds are more excited about renewable energy alternatives than Eskom.

It will also come as little surprise that many of those who have benefited most from our artificially cheap electricity - mining companies and energy-intensive industries - continue to have a disproportionately large influence over the country’s energy policy, including the Integrated Resource Plan which maps the national electricity strategy until 2030.

There’s simply too much money to be made off South African coal. Enough money to mean that those with vested interests couldn’t care less about external costs and billions of rands of damage to our dwindling water resources, our planet’s climate or people’s health.

- Andreas has a PhD in geochemistry and manages Lobby Books, the independent book shop at Idasa’s Cape Town Democracy Centre. Follow him on Twitter: @Andreas_Spath

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