Kusile plant may end up costing SA trillions

THE Kusile power station, originally due to cost R80-billion – an estimate that was later doubled – could end up costing South Africa 40 times as much.

An analysis of the “externality costs” (costs that affect parties who did not choose to incur those costs) of the mammoth coal-fired power station in Mpumalanga shows that the construction bill is a drop in the ocean compared with wider costs over the plant’s 50-year lifespan.

Pretoria University economics doctoral student Nonophile Nkambule, used system dynamics – a computer-aided approach to policy analysis and design – to assess Kusile’s costs.

He said the externality costs included the plant’s impact on biodiversity, air pollution, greenhouse gas output, damage to roads, accidents, noise and water quality.

He put its total costs at between R1.449-trillion and R3.279-trillion, equivalent to between 91c and 205c per unit of electricity produced, with water the biggest-ticket item at about two-thirds of the total.

Even a conservative estimate of the lifecycle burdens of Kusile “doubles to quadruples the price of electricity, making renewable energy sources such as wind and solar attractive alternatives”, Nkambule writes in the October edition of the South African Journal of Science.

“The entire chain of coal-based electricity generation is associated with dire impacts,” he says, pointing out that about 77% of South Africa’s electricity is derived from coal, which would continue to be its primary source of electricity into the distant future.