Cost is a key factor for energy
SA will study the cost of power generation from various projects and expects to announce a decision on new renewable sources by December 7, according to Energy Minister David Mahlobo.
“The Energy Department has met with lenders over the pending projects and let them know where we stand,” Mahlobo said.
“Ultimately for any solution, whether it is renewable or non-renewable, the issue of affordability is very important.”
The government is revising its Integrated Energy Plan, which sets long-term policy and will indicate the pace and scale of changes to the generation mix for the country, which currently relies on coal for more than 75% of its electricity. South Africans last year bought the least power in more than a decade as the economic growth slowed and demand declined. Eskom has a generation surplus as two of its newest stations are adding more units.
Mahlobo anticipates growth for private producers in areas including gasfired generation as Eskom’s oldest plants reach the end of their lifespans.
He said while coal remains the most widely used electricity source, it must be accompanied by “greater technology” to result in lower emissions.
Price remains part of ongoing discussions with the Energy Department for the anticipated renewable energy projects in bid rounds known as 3.5 and 4.
“We could be in a position to conclude them ultimately when the power-purchase agreements are signed.”
The Democratic Republic of Congo’s planned Grand Inga dam should also be a source of power and SA will help to drive investment in the project, Mahlobo said. SA struck a deal in 2013 for 2,500 megawatts from the plant that will be expanded in phases. “Ultimately, we have to get it built.”
The development of nuclear energy has been taken “one step at a time” and awaits finalisation of the resource plan, to be followed by an open-tender process. He dismissed criticism that he’s rushing the process.
“You can’t put the procurement process under the carpet. It will be on the table. Everyone will be able to see.”