Global shift to green energy ‘unstoppable’ as prices drop
Imagine, if you will, that SA’s 15 coal-fired power stations vanished into thin air overnight.
To meet the country’s minimum power requirement, or “base-load demand”, of about 23,500MW on any given work week, SA would have a number of replacement options to urgently consider.
If we were to opt for a new coal fleet, the cost of power production (before any kind of mark-up) would be R1.36/kWh. That is according to modelling done by energy consultant Clyde Mallinson, who spoke at a seminar hosted by Nedbank and EE Publishers this week.
If, instead, we opted for a gas fleet, it would cost R1.33/kWh. If replaced by a nuclear fleet (which would have the added benefit of no carbon dioxide emissions), it would cost R1.89/kWh.
If we went the “whole hog” and commissioned enough wind and solar to provide the bulk of the power most of the time, and further invested in battery storage and gas peaking power plants to provide power on demand, the price would come in at R0.94/kWh.
According to Stefan Nygård of Wärtsilä, a global technology and solutions company, renewable energy already accounts for 20% of the power mix in 75% of the world where it has reached the “tipping point”, having become more cost-effective than other sources of energy.
In the next 10 years, Wärtsilä expects it will become the cheapest energy source in virtually every country.
“You can no longer stop renewables,” says Nygård. “As long as your decision-making is based on climate impact, or economic impact, renewables is always going to win.”
In SA, however, green power has not won the war just yet.
The recently released longterm energy strategy the Integrated Resource Plan (IRP) still sees coal providing the bulk of SA’s power (59%) by 2030. Wind and solar have made remarkable inroads, however, and are expected to provide just more than 24%.
Mallinson says the maximum renewables scenario need not be a distant aspiration for SA. “This can and should happen in SA by 2030, not by 2040. We can have a system in SA that is entirely renewable and entirely reliable, although we would have to strand some assets.”
There is a wide-held belief that because of its intermittency, renewable power is unable to service base-load demand. Traditionally, this has been catered for by cheap and reliable power sources such as coal and nuclear, which run constantly.
However, “when you get to 80% renewables, your inflexible generation such as coal will no longer have a role to play in the system”, says Nygård.
To support such a system, batteries can be used to store and dispatch power as and when needed.
Though battery prices remain high, these are expected to follow a similar low-cost route as renewable power technologies have.
They will never solve all the flexibility needs of a system, Nygård says. Flexible gas, which can start up at a moment’s notice, will also have to be used. For a system to be 100% renewable, this ought to be biogas.
Stephan Vermaak, principal investment officer at the International Finance Corporation, the private-sector arm of the World Bank, says he does not see the government’s cautious approach towards renewables as an attempt to be difficult.
“There is an argument that the government is trying to do this in a way that, in the long term, doesn’t cost you more money [as technologies become cheaper],” he says. “What risk must an emerging country take in order to get clean energy?”
Chris Forlee, CEO of the National Energy Regulator of SA (Nersa), warns of the social consequences. “By going this route, and it does look great on paper, we could dump the country into chaos,” he says, referring to organised labour on the coal mines, which is worried about jobs and lobbying for a “just” energy transition.
It is for this reason that Mallinson believes organised labour should lead the transition away from coal and, in return, be active participants in the burgeoning renewables sector.
Though the transition to 100% green power is provocative, it is inevitable, Nygård says.
“This is a trend happening internationally and it’s simply not possible to stop it in the long term,” he says.