The South African Academy of Engineering (SAAE) has issued a statement raising its concerns about current developments in the electricity sector. “On the one hand there is the lapse of proper governance and prudent financial management in Eskom that has come to light in various forums over the last few months, and on the other hand the current focus on the rapid procurement of a fleet of nuclear power stations. Electricity is indeed required to improve both the quality of life of all our citizens as well as to provide power for a growing economy, however the proposed current developments are inappropriate and are not following due-process,” the organisation says.

SAAE calls for improvements in electricity sectorThe SAAE believes that there are a number of factors that have not been considered and that will strongly influence the supply of power over the next few years. First is the fact that there will be an oversupply of electricity until at least 2022, so that all additional capacity installed during the next five years will essentially be redundant, with inevitable adverse economic impacts.

Second is the impact on the coal price, and thus on the price of energy, that results from Eskom’s policy of purchasing low-quality coal from small miners at high prices and medium quality coal from large, efficient miners at low prices. A major knock-on effect of this is underinvestment in large mines, and a consequent failure to develop essential new reserves, so that the risk of coal shortages by 2020 is high.

In addition, the current prices of electricity from nuclear power stations are known to be higher than from many other sources, and the Integrated Resource Plan (IRP) has not been updated since 2011. Earlier this year, a number of organisations, including SAAE and the CSIR, raised concerns about a number of aspects of the draft IRP document.

“Therefore, the Executive Committee of the SAAE requests that in the interest of South Africa, the Department of Energy should cease to run the current ad hoc processes but rather engage with relevant research groups and industry associations in a well-planned, facilitated and documented process to discuss and agree on the best available input parameters for the modelling of alternative scenarios for the IRP so as to ensure that there is consensus on the assumptions. This could be achieved by establishing a technical forum where the various research groups and industry associations meet to discuss these issues. A new IRP can only be adopted after proper consultation in an open and transparent process,” the organisation states.

“The Department of Public Enterprises, as the controlling shareholder of Eskom, should be tasked to resolve the leadership and governance issues at Eskom as a matter of urgency. These issues pose a significant risk for the country on a number of fronts and need to be resolved as a matter of utmost urgency.”

The SAAE adds that no procurement of new electricity generation capacity, including nuclear power, should be legislated, determined or procured until there is national consensus on the new IRP. This sentiment was echoed in the organisation’s objections to the upcoming Energy Indaba. Described as “hastily planned and convened”, the SAAE called for a postponement of the event to allow for proper planning, including the release of a draft IRP “to allow meaningful participation by all relevant stakeholders”.

Image credit: Copyright: josefkubes / 123RF Stock Photo


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