Nuclear power call is based on outdated plans, warns Yelland

SA DID not need to commission huge new inflexible nuclear power capacity because the government’s chaotic planning meant there was a big chance the country would have a surplus of electricity in the next few years, Chris Yelland, the MD of EE Publishers, said on Thursday.

“SA does not have an energy crisis, it has a management crisis,” he said.

Yelland was speaking at the launch of Powermode’s monitoring portal, shortly after Energy Minister Tina Joemat-Pettersson said a request for proposals for 9,600MW of nuclear power would be issued on September 30.

Yelland said government figures released in Parliament this week showed electricity demand since 2011 had trended significantly lower than in the low-growth scenario in the outdated 2010 Integrated Resource Plan, and its 2013 update. Flagging demand reflected slow global growth in recent years and an economy moving towards lower energy intensity.

“Government cannot forecast correctly for five years, let alone 50. If SA moves to nuclear newbuild, it is committing to one vendor for 9,600MW, based on 2010 estimates, which are clearly wrong.”

Yelland said 2015’s power outages were not caused by a lack of capacity, but a lack of available capacity because of poor maintenance that, to Eskom’s credit, was now being attended to. It has brought back about 4,000MW of generation capacity into the grid. But, as Medupi and Kusile will contribute 9,600MW in the next few years, Eskom is again planning to sell electricity to SA’s neighbours.

Yelland said Eskom’s vertically integrated model of coal-fired electricity generation had not changed in the 90 years since it was established, even though its monopoly was being challenged by independent power producers. It was facing disruptive new technologies, such as solar power at everdecreasing cost, energy storage and electric vehicles.

Members of the Energy Intensive Users Group, SA’s biggest power consumers, were installing more solar power to reduce their reliance on Eskom.

As Eskom’s market share was shrinking, its unit costs were rising, requiring ever-higher tariffs, which in turn forced more customers to become self-sufficient. Yelland said Eskom’s next application to recover costs was likely to be for a R22bn clawback, double what it was allowed in 2016.

In the past decade, Eskom’s tariffs have risen fourfold in nominal terms and were now increasing at double its historical average, adjusted for inflation.

Yelland said SA had to move away from centralised planning to a market-driven model for powergeneration and create more distributed generation rather than generating most of its power on the Highveld. It needed a greater mix of different sources, not a large amount of new nuclear power. All this would provide the flexibility to meet changing demand patterns.