Andreas Späth

SA's coal obsession doesn't make economic sense

2013-09-23 13:25

Andreas Wilson-Späth

How should we be generating our electricity?

“By burning coal – we’ve got lots of it and it’s cheap,” you might reply.

Presumably that’s also the sentiment at the heart of the South African government’s electricity policy with two huge new coal power stations currently under construction and an additional one approved.

A cheap source of electrical power is, of course, very important for a developing country like ours and coal seems to fit the bill. Judged purely on the cost of producing electricity, burning coal beats everything else hands down.

But that’s precisely where the problem lies: the price of coal power isn’t limited to what it costs to dig up the black stuff and burn it in a power plant. Not by a long shot.

To compare it with other energy options on an equal footing, the very real costs associated with the pollution caused by burning coal needs to be accounted for. And it’s in this context that a recent US study confirms previous research in showing that coal-fired electricity generation makes no economic sense.

The true social cost of coal power is calculated by adding to the basic production costs the climate change consequences caused by the CO2 emissions and the damage done by pollutants like sulphur dioxide (SO2) that are released during the process. The latter, according to the authors of the study, cause “thousands of premature deaths, heart attacks and incidents of respiratory disease (e.g. asthma and bronchitis), millions of lost work and school days, and a variety of damages to ecosystems and property” every year.

What was at first glance the cheapest option turns out to be the least cost efficient when all of the true financial implications are taken into account.

Electricity made using natural gas, onshore wind and solar photovoltaic resources are preferable to conventional coal when considering the construction of new power plants and wind is better than natural gas in most scenarios (the study also considers coal and natural gas in combination with carbon capture and storage, but I have previously explained the problems associated with this technology and won’t consider it further here). What’s more, the study suggests that continuing to run existing coal plants is more expensive than replacing them with any of the cleaner options.

So based on purely economic considerations, our government should be building power plants that use our abundant wind and sunshine instead of our dirty coal (there are some good reasons why those two renewable energy sources are preferable to natural gas as well) and it should furthermore aim to replace existing coal plants with alternative wind and solar installations.

Investing in clean, renewable energy in preference to fossil fuels isn’t just an environmental priority, it makes financial sense, too.

The authors of the study hit on crux of the matter when they note that their conclusions “hinge to a large degree on the extent to which damages to future generations are valued” by us today.

Pleading ignorance about the true consequences of our dirty habits is no longer an option. Are we happy to let our children’s children pay for our actions?

- Andreas is a freelance writer with a PhD in geochemistry. Follow him on Twitter: @Andreas_Spath
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