South Africa’s power generation plan keeps coal in the mix

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PRETORIA (Reuters) – South Africa’s plans to boost electricity generation over the next decade will be a mix of renewables and coal-fired power, the energy minister said on Friday, Gwede Mantashe, as the nationwide power cuts entered their third day.

FILE PHOTO: Steam rises from cooling towers at Matla Power Station, a coal-fired power station operated by Eskom in Mpumalanga province, South Africa May 20, 2018. REUTERS/Siphiwe Sibeko/File Photo

The long-awaited integrated resource plan released on Friday replaces a previous plan that had not been updated for nearly a decade, curbing much-needed investment in new production capacity.

Mantashe said the new plan supports a diversified energy mix and could be a catalyst for economic growth.

South Africa’s power generation problems resurfaced this week with the first power cuts in around seven months, underscoring the challenge President Cyril Ramaphosa faces in reviving the country’s economy and saving the public service. electricity in difficulty Eskom.

Eskom cut up to 2,000 megawatts (MW) of electricity from the national grid on Friday and would likely cut 1,000 MW on Saturday, spokeswoman Dikatso Mothae said.

The new energy plan calls for 1,500 MW of new coal-fired power, 2,500 MW of hydroelectricity, 6,000 MW of photovoltaics, 14,400 MW of wind and 3,000 MW of natural gas.

Power generation in South Africa is currently dominated by coal, which accounts for more than 80% of generation and makes the country one of the top 20 carbon dioxide emitters in the world.

By 2030, coal would represent 59% of electricity volumes, including 8% of hydroelectricity, 6% of photovoltaics, 18% of wind and 1% of gas and diesel, according to the plan.

The life of the Koeberg nuclear plant will be extended, but there are no plans for a large-scale nuclear expansion of the kind championed by former President Jacob Zuma, Mantashe said.

“Ours should not be a lobby group for a particular energy technology,” he told a news conference.

Analysts said the plan did not represent the lowest-cost production mix, but was an effort to appease different interest groups by giving everyone a stake in the planned new capacity.

Chris Yelland, a Johannesburg-based energy expert, said the inclusion of new coal capacity was a deliberate attempt to appease coal lobbyists.

But he also said these coal-fired power plants may never materialize as international and local banks are increasingly reluctant to lend to coal projects due to environmental concerns.

ESKOM’S PROBLEMS

Eskom resumed power cuts on Wednesday after unplanned outages at some of its generating units reached more than 10,500 MW out of its installed capacity of around 45,000 MW.

These outages show how fragile South Africa’s power system remains despite some improvements in plant performance at the start of the year.

Compounding those difficulties, Eskom said Units 3, 4 and 5 of its Medupi power plant were taken offline on Thursday evening due to coal and ash handling issues.

Medupi and sister project Kusile will be two of the largest coal-fired power plants in the world when completed, but they have been hampered by huge cost and time overruns.

These are the main reasons why Eskom has debts of 440 billion rand ($29.7 billion) and why it depends on government bailouts for its survival.

Eskom spokeswoman Mothae said Unit 4 at Medupi was now back online, one of the reasons power cuts are expected to be less severe on Saturday.

Thabang Audat, a senior energy ministry official, said the government would soon talk to power companies about supply and demand options that could help fill the country’s energy gap.

He added that based on the assumptions of the energy plan, South Africa would buy more renewable energy under a fifth tender next year.

Debilitating power outages in February and March led to a contraction in the country’s economic growth in the first quarter and increased the likelihood that the country would lose its last investment grade credit rating from Moody’s.

Moody’s is expected to review the rating on November 1.

Additional reporting by Olivia Kumwenda-Mtambo; Editing by Catherine Evans/Dale Hudson/Jane Merriman/David Evans


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