Building of Kusile should be halted- WWF

2010-02-25 11:02

The National Energy Regulator of South Africa’s (Nersa’s)

announcement on the electricity tariff increase is one more reason to halt the

development of Eskom’s second new coal-fired power station, Kusile, the World

Wide Fund for Nature (WWF) said today.

They said the increase Nersa had announced yesterday was unlikely

to provide Eskom with sufficient capital to finance Kusile.

Nersa approved an increased tariff of 24.8% as from April 1, and

subsequent increases of 25.8% and 25.9% for the following two years


This was less than the 35% increase requested by Eskom and

substantially less than the 45% increase that the utility originally said it

required to fund operational and capital costs.

If Eskom still went ahead with its plans for Kusile, this meant

that capital would have to be raised through alternate means, such as additional

loans, asset sales, or private sector funding, the WWF said.

“Private finance would be better directed to developing local

industries in renewable energy technologies.

“With timely finalisation of provisions for implementing the

renewable energy feed-in tariffs, solar and wind could provide the same

generation as Kusile, with far greater social benefits,” said WWF Living Planet

unit head Saliem Fakir.

The WWF believed that before proceeding with any more coal

projects, beyond Medupi, South Africa required a proper integrated energy

planning process that incorporated a mix of different energy solutions in line

with a low-carbon development pathway.

“There is also concern that stakeholders have yet to be informed of

the process for consultation during the development of a second Integrated

Resource Plan (IRP2) promised by Minister (Dipuo) Peters in the IRP1 issued in

January,” Fakir said.

His organisation was concerned that the issues raised at the Nersa

hearings had not been resolved.

“The funding model for new electricity supply, which was raised at

the hearings, needs to be interrogated.

“A mixed portfolio model in which renewable energy plays a part

would lead to a more affordable scenario for power generation costs in the

future,” he added.

He said the WWF had recently joined forces with other NGOs to

question the World Bank’s funding of fossil fuel projects such as Kusile.

“The World Bank is sending out the wrong message. If it intends to

promote cleaner energy solutions, it should re-examine its support for the

coal-fired power station,” Fakir said.

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