SA Nuclear Deal Scuffle: We're Missing the Renewables Train

2016-09-17 17:25

The R3 Trillion nuclear deal that most likely would see the South Africa's economy carrying yet more debt, has begun in the usual tender-rigged fashion. Media reports have it on hand that close friends of the Zuma elite have already secured deals for themselves, with the son of a certain prominent KZN businessman among the first. South Africa's energy policy, has long kept South Africans (literally and figuratively speaking) in the dark. Eskom's inconsistency and exorbitant spending habits have ballooned many of its projects (including the Kusile, Medupi and most recently the Ingula hydro-electric plant) far beyond budget. Parliament's budget office has already briefed government a few weeks ago that outlaying costs for nuclear fa exceed that of coal or oil, with power generation expected to be at %117. Despite the fact that most public projects have provided watering holes for those among the politically connected, these projects (both existing and scheduled to get underway) have another common thread - they're ll run on archaic carbon based or, environmentally damaging substances to generate energy.

Economically the renewables sector in the last year has become considerably competitive, as the cost per kilowatt hour has lessened beneath the threshold of conventional oil and gas produced power. Even regions reliant on their oil stores are beginning to look to the future, as legislation and stock value of carbon based assets constrain their value. One example is Dubai which, just last year made headlines when they'd signed an 800 MW expansion of their photo-voltaic plant on the city's outskirts. Consultation and planning for this extended phase of the solar park is already underway. Projected user costs for power generated by this solar park are estimated at under US5 cents per kilowatt hour (oil would have to fall to $10 a barrel to match such user costs). The increased manufacturing capacity and technological advancement of renewable energy (solar panels and windmill blades especially), coupled with mounting legislative constraints on conventional energy forms, make such plans not only feasible, but perfectly logical. Such has the commercial viability of renewables become, that state subsidies are no longer required.

Costs for solar energy production have dropped %80 over the last 5 years while wind energy, a respectable %50. I'm far from an authority on the subject of energy but such figures, even if tentatively true, should command the attention of our policy makers. The commercial viability of such alternatives on a mass scale is not only possible, it's taking place with one of our very own BRICS partners. China's energy planned targets for 2020 include 100 gigawatts of solar and 200 GW of wind. Mass production capacity and efficiency already exceeds some of these these targets, having the Chinese government already revising them to 50 more GW for both wind and solar. We'd do well to heed advice and learn lessons from one of government's most favoured diplomatic and economic partners. All this considered when Russia (another BRICS big brother) is the main beneficiary of the deal (as schizophrenic a foreign policy if you ever saw one). Even India (Another BRICS partner) recently cancelled a coal plant project at the last minute since it discovered costs for renewables to be cheaper. If proposed power output for renewable expansion in countries like China sits in the region of 18 gigawatts a year then surely, the proposed output for our nuclear plants looks little more than child's play.

ReactorTypeGross capacityConstruction startFirst power
Thyspunt and/or Duynefontein

(total about 8)



9600 MWe2024-2030

source: world nuclear association -

Yes our country does have green energy projects here and there but overall, South Africa's venture into renewable projects haven't fared well to date.Examples include the well publicized "Game of Geysers" debacle, which saw thousands of residents in Alexandria left with solar powered geysers that faulted just under a few weeks after installation. While uncovering details on the incident, it was found even some Chinese associates were in on the R800 million rigged tender process. Woe unto those who see a brighter future through economic alternatives in SA. Eskom (unsurprisingly) has been mum on its commitments to renewable energy policies, especially where the renewable independent energy power producer procurement (REIPPP) policy is concerned. A recent Daily Maverick piece initially elicited positive responses from the SOE, only to later have the journalists questions deferred and taken up by the South African Renewable Energy Council (SAREC) instead.  The latter's activities of late (or lack thereof) can only be a sign of the impending nuclear cataclysm set to befall our energy sector and economy as a whole. Additionally, Moody's review grading of Eskom's investment status, as a precursor for the status of other SOE's looks sure to affect the entity's ability to raise capital from investors and the like. Even the South African Nuclear Energy Corporation (another wholly owned but perhaps unnecessary state entity) seems to offer little more in the way of training than brochures on nuclear radiation hazards, relying on scholarships to foreign countries instead

This comes as global investors are being swayed to invest in green tech more than ever. The environmental risks coupled with increasing legal constraints against conventional energy sources make renewables an  attractive and sensible long term investment option. Known as "stranded assets"in the broker world, oil, coal and other forms of greenhouse producing energy are becoming increasingly obsolete. examples of investor shifts include the major European pension fund APB, which last year pledged to shift more than €58 billion over the next five years (by 2020) into renewable energy sector. German investor and fund manager Johann Wermuth has already made a small fortune shorting non-renewable sectors/companies, and has convinced a lot of others to join him. So far, Eskom's indecision into investing or facilitating renewables in the country has left companies like Siemens (another German entity inspiring the green revolution) to carry the [lone] torch, with Standard Bank perhaps providing a supporting role in this drama. Fellow blogger Tselthle Litheko's proposed reforms for corruption in South Africa's government are needed now more than ever.

All of that said, South Africa seems to be (once again) missing an important opportunity to catch the train most  others have been astute enough to hop on. Environmental treaties aside, the economic (beside the environmental and social)  benefits of converting to sustainable energy are clear. If the endless greed and shortsighted nature of  our politicos continues, the ones to suffer will be you, I and our future generations to come. It is incumbent upon all of us to stop the impending disaster that awaits us should this deal continue. A Referendum is what is needed. Groups like the Right2Know campaign (among many others) have important roles to play in raising awareness about this plight/blight on our  national development agenda.

if anyone is interested in joining calls for a referendum. please follow this link:


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