Expert calls for fair distribution of SA electricity

2013-10-18 11:30
(Duncan Alfreds, News24)

(Duncan Alfreds, News24)

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Cape Town - Large industrial electricity users are not sustainable for South Africa as the cost of energy goes up for consumers, an industry expert has asserted.

"BHP's smelters are not sustainable. Want a quick fix to the electricity problems? Shut down the smelters, lose 400 jobs, put 4GW back on the grid, and create many thousands of jobs elsewhere with the new electricity available," Frank Spencer told News24, referencing BHB Billiton, a massive user of electricity in SA.

Spencer has a masters in Electrical Engineering, as well as a Philosophy degree in Sustainable Development and runs Emergent Energy, a renewable energy consultancy and projects company.

Eskom recently asked Billiton to temporarily switch off its two aluminium smelters which consume large amounts of energy as the country faced an electricity shortfall.

Peak electricity production in SA is at about 34 000MW, but that includes the use of open cycle gas turbines which carry a cost premium over coal-fired plants.

Domestic users

Domestic users in SA account for around 17% of consumption, while industry takes up 37.7% and mining 15%, according to the government gazette on electricity pricing policy of 2008.

During the evening peak when most domestic users consume electricity, the grid is at its most vulnerable - in part because of the wide distribution network as well as vandalism, as opposed to a narrow supply network for industrial users.

Greenpeace said that South African industry should accelerate programmes to reduce inefficiency.

"South Africa's industrial sector has evolved in the context of cheap and abundant electricity, which has contributed to making the country one of the most energy intensive countries in the world. This means that our country's industrial sector is highly inefficient," said Melita Steele, Greenpeace Africa Climate and Energy campaigner.


Recently, Trade and Industry Minister Rob Davies proposed a third massive coal-fired power station to meet future energy needs, dubbed "Coal 3".

The proposal has alarmed environmentalists who feel that existing projects Medupi and Kusile have demonstrated that coal power plants are fraught with cost overruns and delays.

While Public Enterprises Minister Malusi Gigaba expressed his displeasure at the delays, he appeared to backtrack from his earlier statement that officials would be fired over project delays.


"It was on this basis that as the shareholder representative, I had made very strong statements and held the parties accountable to the deadline. I had to put everyone under pressure to deliver. I have held a very firm view that everything must be done to comply with the project schedule of December 2013 and that all the parties, particularly the contractors, must fulfil their obligations," Gigaba said at the Eskom post-AGM media briefing at Megawatt Park.

The World Wide Fund for Nature (WWF) said that the coal fired power station was a relic even before its construction and the country should invest in moving toward efficient energy production.

"While South Africa’s Integrated Resource Plan (IRP) remains stuck in an old paradigm of bulkiness and capital intensity, greater effort should be made to reduce demand, avoid as far as possible the building of too many complex power stations and focus on more modular and rapidly deployable solutions such as renewables," said Saliem Fakir, Living Planet Unit head at the WWF.

Spencer argued that the cost of coal power generation should be accurately compared to the real cost of renewable energy projects.

"The most conservative estimates show Medupi to be expected at around R0.90/kWh, although with the delays and costs overruns most expect the price of electricity to be well over R1.00/kWh. It also should be noted there is significant risk in the future coal price, with the price of coal having increased at over 20% per annum for the last few years.

"Wind Farms, for example, are bidding at below R0.9/kWh, with a PPI linked escalation in price for 20 years, thus the future price is completely known," he said.


Earthlife Africa said that the fact that industrial users consumed a large percentage of South Africa's electricity presented a moral dilemma for the country.

There's something immoral about our electricity consumption and who uses it," said Muna Lakhani, Cape Town branch co-ordinator for Earthlife Africa.

According to data from the World Bank, South Africa's per capita consumption of electricity declined from a peak of 5 061.2kWh in 1997 to 4 802.84kWh in 2010.

Despite this, the number is still nearly double that of China with a per capita consumption of 2 943.79kWh as an emerging middle class in the country drives the increase.

- Follow Duncan on Twitter
Read more on:    greenpeace  |  wwf  |  bhp billiton  |  electricity  |  environment

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