Pursuit of coal-fired stations raises the same questions as nuclear deal

This opinion piece appeared in the Business Day on 3 July 2018. It can be viewed here.

Last year, the R1-trillion nuclear deal was set aside by the high court due to a number of procedural irregularities that occurred because former president Jacob Zuma, together with his local and Russian cronies, was intent on sidestepping Parliament to force through a nuclear deal evidence overwhelmingly indicated was not in SA’s best interests.

While we can celebrate the victory of civil society and the robustness of the judiciary in the nuclear case, we need to ask whether the government has learnt anything from the fiasco. While there have been no suggestions of similar procedural irregularities to date, the government’s apparent determination to pursue the construction of another two coal-fired power stations in the face of overwhelming evidence that they are not in SA’s interests suggests that the answer is no.

By every relevant metric the proposed Thabametsi and Khanyisa coal-fired power plants are bad news for SA. Research carried out by the government’s own Council for Scientific and Industrial Research (with Meridian Economics) and the University of Cape Town’s Energy Research Centre has shown that the extra generation these plants will bring is surplus to requirements over the short and longer terms (at least 30 years), and when additional capacity is eventually required it should be met at the lowest cost from new solar photovoltaic and wind.

The Energy Research Centre has shown that in comparison with renewable energy supported by gas, the additional cost associated with building the two plants would be R16.4bn between now and 2050, assuming pessimistically high costs for new renewables and gas. However, given the downward pressure on renewable costs, the research shows that the actual additional cost is more likely to be in the region of R23.1bn.

Given the parlous state of Eskom and SA’s finances, on what reasoned basis can this additional cost be justified?

How does this equation fit into President Cyril Ramaphosa’s “new dawn”, which is supposed to be based on the stabilisation of the finances of state-owned enterprises?

Thabametsi alone is set to release 8.2-million tonnes of CO² equivalent per year, making it one of the highest-emitting coal-fired power stations in the world and giving it the dubious honour of being named among the world’s “Dirty Dozen” by global environmental groups. The environmental impact assessment into the plant’s greenhouse gas emissions noted that the “magnitude of the project’s greenhouse gas emissions is considered to be very large”. The Khanyisa plant’s environmental impact assessment stated that the plant is expected to add another 4.2-million tonnes of CO² equivalent per year.

According to the Energy Research Centre research, both plants are likely to release so much greenhouse gas over their lifetimes that they will largely cancel out emissions savings achieved via the government’s National Energy Efficiency Strategy to 2050. As the report argues, “the coal independent power producer programme essentially negates key mitigation actions at the disposal of the government”. The plants also call into question SA’s ability to meet its greenhouse gas emission targets, as articulated in the 2011 National Climate Change Response White Paper and committed to under the Paris Agreement.

How all this squares with the Climate Change Bill released for public comment last week is anyone’s guess. This bill acknowledges that SA is “especially vulnerable” to the impacts of climate change and highlights the need for the country to transition to a “lower-carbon economy and society in the context of an environmentally sustainable development framework”.

Both plants are also likely to have a devastating impact on local air quality. The Khanyisa plant is to be located in Mpumalanga, whose residents already endure some of the worst air quality in the world and get sick and die in their thousands every year as a consequence, according to recent research from the Centre for Environmental Rights and GroundWork. The Thabametsi power station is to be in Limpopo, near the operational coal-fired Matimba power station, and the partly operational coal-fired Medupi power station. The residents of the Waterberg district where these stations are located, or are to be located, are likely to endure similar health problems in future, if they are not already doing so.

Water and Environmental Affairs Minister Edna Molewa has dismissed such concerns. While recognising that the “social and environmental costs” associated with Thabametsi are high, she argues that the benefits are justified. One wonders if she would be so willing to make this casual judgment is she were to live near one of these power stations.

Both proposed power plants are located in particularly water-stressed areas in an already water-stressed country. The Thabametsi plant will use 1.5-million m³ of water per year in the highly water-stressed Waterberg district. The Khanyisa plant will draw water from the already highly polluted and equally stressed upper Olifants River catchment. Ironically, one of the expected impacts of climate change on the Highveld is a decrease in precipitation and increased levels of evaporation. This means there is a real chance that local people will be deprived of water or that both plants will have to be abandoned due to water shortages.

Given the overwhelming evidence that these two plants are unnecessary and deleterious to SA, why are they being pursued? We need to ask exactly the same questions that were asked of the nuclear deal. Whose interests do they serve? Who stands to benefit? What roles are vested interests such as coal suppliers and hauliers playing?

Is it relevant that the long-overdue Integrated Resource Plan has still not been published, which continues to muddy the water when it comes to electricity planning? And is it relevant that the Coal Baseload IPP Procurement Programme took place during the height of so-called state capture? These difficult and necessary questions must be answered if we are to believe that SA’s “new dawn” has really arrived.

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