These large-scale builds offer too much temptation for politicians and tenderpreneurs to enrich themselves, and are almost always beset by interminable delays and cost-overruns.
Wednesday’s Budget confirmed what we already know about of our energy crisis. It is costing us more and more, with no future guarantees.
Eskom’s unmitigated implosion has now drawn the procurement of future power from alternative sources to the fore; but we must tread with utmost caution, particularly when this power is to be imported.
We simply cannot afford to let our panic to keep the lights on overshadow the need to think very carefully about our energy future. We must ensure that every megawatt we procure is reliable and offers value for money.
This is why it is so hard to understand why the South African government is hell-bent on sourcing expensive and unreliable hydro-electric power from the Democratic Republic of Congo (DRC) in a project that will take 15 years at best to come online. If we have learned one thing from the Eskom crisis, it is that ‘mega-projects’ (like Medupi and Kusile) do not work.
In 2014, South Africa reached an agreement with the DRC in which we pledged to buy 2500MW of power from the Inga 3 (the first phase of Grand Inga) hydro-electric dam once it comes online in 2030. This agreement was concluded despite the hefty comparative price tag of this power.
The power we will import from the DRC will cost consumers at least R400m more per year compared to locally producing 2500MW of renewable energy – and in late 2018 Minister Radebe made moves to double this amount, at a further unknown total cost, and without Cabinet or Parliamentary approval.
Paid by SA – with no guarantees
To top it off, the deal with the DRC requires us to invest 5% in the R200bn project. That could be R10bn, but possibly more: exchange rates are volatile – particularly the Rand at present – and costs of mega-projects usually escalate exponentially as time goes by.
Furthermore, the treaty provides no guarantee of supply to South Africa. Even at such extortionate cost, if the DRC to decides that its energy needs trump ours, our supply can be cut.The question is: why would the South African government choose to procure expensive electricity from a volatile and politically unpredictable country when we are in the midst of an energy crisis?
What South Africa needs is affordable, reliable and clean energy that drives investment, creates jobs, fosters critical skills development, helps us curb climate change, and kicks our struggling economy into gear. The last thing we should be doing is taking uncalculated risks on mega-projects that we can’t control, and quite simply can’t manage as mega-projects like Kusile and Medupi have horrifyingly revealed.
Importing very expensive Inga 3 energy won’t solve our energy crisis, nor will it do anything to fix our ailing economy. But generating 2 500-5 000MW worth of renewable energy ourselves will go a long way. The success of the Renewable Energy Independent Power Producers Procurement (REIPPP) programme is what we should be building on.
Accounting for 6 376 MW generation capacity, the initiative’s 112 wind, solar and biogas projects will help create 114 266 job-years (years of full-time employment for one person) during both their collective construction and 20-year operations period.
We can do more
The initiative has attracted investment close to just over R250bn, and more is to come: the 1 800MW that will be generated in the REIPPP’s next and fifth bid round, which will be launched in 2020, is worth another R40 to 50 bn in investment. These are not my words, but those of our Energy Minister Jeff Radebe himself.
We are capable of more, much more than our current realities: a 2016 study by the Council for Scientific and Industrial Research (CSIR) has shown that wind and solar energy can supply the bulk of the power we need, at the lowest cost of all energy sources.
It seems that Minister Radebe wants to forge ahead with the expensive and equally unrealistic Grand Inga project at any cost, and even if it means more load-shedding in the future. It is time the Minister started thinking and acting on behalf of all South Africans, and in favour of our societal wellbeing and economic future. There may be a light at the end of our energy crisis tunnel, but – unfortunately – it doesn’t come from the DRC.