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South Africa's energy future is a pawn in the larger political game

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Professor Anton Eberhardt of the University of Cape Town Graduate School of Business sees private investment in renewable independent power projects (IPPs) and the bluffs and bluffs of those who belligerently oppose the start of the transition away from coal and nuclear. said it was time to call on South Africa’s new power roadmap, Integrated Resource Planning (IRP). “It is clear that some are frustrated and angry that they will no longer be able to access special deals with Eskom and the coal and nuclear industries. But IPPs and IRPs should not cloud our policy and investment choices,” he adds.

Eberhard argues that if South Africa wants to support true economic transformation, it must embrace new low-cost energy technologies and unprecedented global innovation in competitive markets. Otherwise, you risk succumbing to a narrow, reactionary minority who are more interested in the rent-seeking opportunities of old, expensive technologies that hinder social and economic progress.

“South Africa’s highly competitive IPP program has attracted more than R200 billion in private investment in projects. It was done,” says Eberhard.

According to Eberhard, many public platforms are now dominated by coalitions of the nearest-minded and resentful, causing resentment and opposition. This includes elements from his Zuma-wing of the ANC, the EFF, the South African Nuclear Industry Association, the Coal Transport Forum, several unions and a handful of energy professionals, including a number of accused former SOE officers and managers. It is Advocacy groups such as Anti-Corruption, Black First Land First, Transform RSA and the South African Energy Forum. Oddly enough, this coalition includes people who deny man-made climate change and some members of the Free Market Foundation.

“The anti-IRP and IPP claims are based on four fallacies,” Eberhard explains. “They argue that solar and wind energy are unreliable and expensive. That IRPs do not adequately consider the impact and costs of renewable IPPs on the rest of the power system. These IPPs have not fostered rural industrialization or created sufficient jobs, and IPP procurement is corrupt and profitable to the president’s family and the new politically connected elite. brought about.”

Eberhard said solar and wind energy were expensive in the past, but technological innovation and global market expansion have led to significant cost savings over the past five years, making them the cheapest source of grid-connected power in South Africa today. claims that it is. “If South Africa makes new competitive procurements now, the bid price for solar and wind energy will be below 50 cents/kWh, lower than the operating costs of Eskom’s most expensive coal-fired power plant. Let’s go,” he adds.

The theory that IRP ignores the cost of the rest of the system for backup and ancillary power services is inconsistent with the IRP’s purpose of being the lowest cost combination of power supplies that provides an acceptable reliability criterion. , explains Eberhard. “The PLEXOS computer model that underpins IRP is the gold standard in the industry and is used by numerous utilities and countries around the world. Gas (or equivalent flexible resources) complements the variability of solar and wind energy. and together indicate that their weighted average costs are lower than coal or nuclear power plants, and the nuclear optimistic ones.

Eberhard says the anti-IPP coalition’s arguments against the IRP simply don’t stack up, so much of the group is now abandoning claims that nuclear and coal are the least cost. They instead argue that industrialization and employment should be the determining factors in our new investment choices, ignoring the impact of electricity prices on affordability and economic growth.

“Renewable energy has a lot more potential for local manufacturing and jobs,” says Eberhard. He cites Department of Energy data showing localization of renewable energy IPP programs is over 45% of his. Additionally, in many projects he has over 50% local ownership and over 80% of his debt financing comes from local banks.

“Comparing the underutilization of solar and wind farms with Eskom power plants is disingenuous and ignores the significant difference in energy output,” says Eberhardt. “Comparing jobs per kilowatt-hour, there is incontrovertible evidence that renewable energy creates more direct jobs than coal and nuclear energy.”

Eberhard says there is no basis for conspiracy theories that the IPP program is corrupt and benefits President Ramaphosa’s family and members of his administration. “In five procurement rounds, he had more than 400 bids and nearly 92 projects were awarded in fierce competition. It is done under strict security.”

IPPs currently contribute less than 5% of South Africa’s electricity. Those costs are passed directly to consumers through regulated tariffs. Eskom’s finances and jobs have yet to be directly affected by the IPP, nor are mine jobs, but Eberhard says it is coming. “President Ramaphosa and his Cabinet now take the lead in a global wave of innovation in energy markets that can provide reliable, clean energy services at competitive prices for economic growth and prosperity for all. must be accepted.”