Affordability is very much the issue facing energy planners in SA, as Eskom last week took a R33bn loan from China for its build programme, while closing down a costly renewables plant, writes Legalbrief. At the same time, President Cyril Ramaphosa has also stated that the country cannot afford future nuclear investment. Non-profit organisation Greenpeace has expressed its disappointment at China choosing to support ‘dirty, dead-end coal’ in SA, especially since China has an emerging and strengthening leadership on climate change. According to a Mining Weekly report, Greenpeace’s comment comes after Eskom last week signed a R33bn loan agreement with the China Development Bank to fund Eskom’s build programme, with emphasis on the Kusile power station. Eskom can draw upon the facility for five years. ‘Kusile will be a mammoth coal-fired power station if it is completed and will use up massive amounts of scarce water resources. Investment in coal will continue to create pollution that will damage people’s health and drive us closer to unstoppable climate change,’ said Greenpeace Africa climate and energy campaign senior manager Melita Steele. Greenpeace suggests that the last two units of Kusile not be completed and that the money should rather be redirected to renewable energy. Meanwhile, the DA said the loan would not ensure long-term financial stability for Eskom and that it was merely a ‘small band aid’ for the loss-making utility. The DA added that it will write to Eskom chair Jabu Mabuza to request that the utility make the terms of this loan from China Development Bank public in the interest of openness and transparency.
Russian President Vladimir Putin raised the subject of a nuclear deal at a private meeting with Ramaphosa at the Brics summit in Johannesburg, but his host said Pretoria could not sign such a deal for now. Business Day notes Russian state firm Rosatom was one of the front runners for a project to dramatically increase SA’s nuclear power generating capacity championed by former President Jacob Zuma. Ramaphosa has put nuclear expansion on the back burner since taking office in February, saying it was too expensive. He has focused instead on pledges to revive the economy and to crack down on corruption. ‘While we remain committed to an energy mix that includes nuclear, SA is not yet at the point where it is able to sign on the dotted line,’ Ramaphosa’s spokesperson, Khusela Diko, said about the meeting between Putin and Ramaphosa. Hours earlier, ANC treasurer-general Paul Mashatile said that SA would not rush into major nuclear investments but that it was still open to future deals with Russia.
Eskom has finally canned the 100MW Kiwano concentrating solar power (CSP) plant near Upington in the Northern Cape after prolonged uncertainty, saying the decision had the blessing of the project’s financiers. According to a Cape Times report, Eskom spokesperson Khulu Phasiwe said last week that the power utility decided to make a U-turn on the project because of its costs. Phasiwe said the project was too expensive. ‘That is why we thought it was best to use the money for something else within the renewable energy sector, hence the decision to invest in battery storage. Our funders were happy with that.’ Eskom and the European Investment Bank in 2014 signed a R1.1bn finance contract to support the CSP plant. Eskom’s other renewable project, the 100MW Sere wind project in Vredendal in the Western Cape, has been feeding power to the electricity grid since December 2014. Eskom said its board in March approved battery storage with distributed solar photovoltaic at sites close to renewable independent power producer plants and Sere wind farm. ‘The lenders have accepted the battery storage as a suitable alternative, as it is expected to meet the same objectives as the CSP project,’ Eskom said.