A report released by the University of Cape Town’s Energy Research Centre (ERC) shows that government’s planned independent power producer (IPP) coal plants – Thabametsi and Khanyisa – would cost South Africa an additional R19.68-billion compared with a least-cost energy system.
Thabametsi – a 557 MW plant to be based near Lephalale, in Limpopo – and Khanyisa – a 336 MW plant to be based near eMalahleni, in Mpumalanga – are the preferred bidders under the first bid window of the Coal Baseload IPP Procurement Programme.
The report states that the two coal IPPs are not needed to meet the country’s medium-term electricity demand. Where future capacity is needed, this is met more cheaply by other electricity sources such as wind, solar and flexible gas generation, it points out.
“These new coal IPPs are excessively expensive and polluting, and crowd out other cheaper, cleaner and more flexible alternatives. They would increase costs in the electricity sector unnecessarily, in circumstances where we already have a large surplus of generation capacity,” says ERC member Gregory Ireland.
The new plants would also increase greenhouse-gas (GHG) emissions by 205.7-million tonnes of carbon dioxide equivalent over the 30-year period of the power purchase agreements, and negate most of government’s emission mitigation plans, including the vast majority of the expected emissions savings of the entire energy efficiency strategy to 2050.
“They would further impact on South Africa’s commitments under the Paris Agreement, raising the costs of mitigation dramatically and requiring significant GHG emissions cuts elsewhere in the electricity sector and in other sectors.
“If the coal IPPs were to operate at the capacities authorised by their environmental authorisations (Thabametsi 1 200 MW and Khanyisa 600 MW), the costs and impacts would increase proportionally, and would be roughly doubled,” the report shows.
Nonprofit organisation, the Centre for Environmental Rights pollution and climate change programme head Robyn Hugo notes a least-cost Integrated Resource Plan does not require new coal-fired power stations to be built, so the coal IPPs “make no sense. Spending an additional R20-billion on two new coal IPPs would not be in the public interest,” he says.
Environmental justice organisation GroundWork director Bobby Peek adds that Eskom is facing a financial crisis and that rising electricity prices will drive consumers away from the utility.
He adds that the enormous additional expense of the coal IPPs would impact most directly on the poor, who are already hardest hit by the devastating health and other impacts of polluting coal-fired power generation.
The coal plants are required to start operating by December 2021, but numerous required licences and authorisations are outstanding and/or are currently being challenged in the High Court by the Life After Coal campaign. Neither project has reached financial close yet.