South Africa’s Eskom imperils national energy security
Eskom imperils our energy security – It is long past time to Liberate the Grid, Daily Maverick 27 OCT 2016 It is a paradox of sorts but Eskom’s increasingly hostile attitude towards the country’s once successful renewable energy programme (REIPPPP) and indeed, the government’s own energy policy, should be welcomed. By DIRK DE VOS.
Recently, we have seen Eskom’s current head generation, Matshela Koko, saying that National Treasury itself should pick up the liability created by existing renewable energy projects even though the costs of these are passed through via the regulated tariff mechanism (so no cost is borne by Eskom).
Eskom’s defiance of national policy and legislation by its refusal to connect additional renewable energy projects is now the subject of an official complaint by the Wind Energy Association (SAWEA). At the same time, Eskom wants to be at the centre of a future nuclear energy procurement programme despite the lack of an Integrated Resource Plan (IRP) to support any such thing.
This should not be seen as a bad thing. Why? In the Finance Minister’s Medium Term Budget Policy Statement, we see Treasury support REIPPPP and other energy initiatives but these are little more than encouraging words. It is Eskom that, perhaps inadvertently, is framing exactly the kind of debate that South Africa should have finalised more than 18 years ago. In 1998, Cabinet adopted the White Paper on Energy. It contemplated a substantial restructuring of our electricity sector separating generation, transmission and distribution, the extensive use of markets to regulate price, promoting energy efficiency and environmental sustainability.
Almost none of the policies was carried out. One initiative that did emerge was an Independent System and Market Operator (ISMO) Bill which would have made a modest start on separating the management of the grid from Eskom’s generation and distribution activities. It went nowhere.
In the interim, a revolution driven by increasingly cheap renewable energy has got under way. In 2014, more additions to global electricity generating capacity were accounted for by renewables than any other form of energy and growth of this sector is charging on requiring constant upward revisions to the future growth of renewables.
In South Africa however, despite claims to the contrary, the promising renewables programme is grinding to a halt. Eskom’s willingness to connect ever cheaper renewable projects has moved from what can be described as passive-aggressive to one of open defiance. Soon, investors in renewables will have to abandon the country and relocate their efforts to countries that are moving with the times.
We seem to be caught in endless debates about the merits of renewables. While Eskom, a publicly owned company, refuses to disclose information about the costs of its generation, new renewables are proving to be cheaper than any other source of electricity generation. Eskom, for its part, has sought to dismiss renewables with a series of misrepresentations about renewable energy and does so even in its own financial statements. Eskom’s false claims on renewable energy are then trafficked to the general public in such bad faith that there is little purpose in the tedious efforts to refute them.
Let’s get to the more useful debate then: Mr Koko is reported to have said that the financial strain caused by the REIPPPP (renewables) was indefensible. In doing so, he makes a telling point, “I am an executive of Eskom. I will not preside over Eskom sinking,” and to underline what he means, he goes on to say, “You cannot be a cardinal and not believe in the pope.” So, there it is. Eskom and its viability stands in the way of sensible electricity sector decisions.
One of the more recent changes to the electricity sector is that planning future generation is now not done by Eskom itself but through an independent IRP process. The IRP is now the means by which South Africa plans its future electricity path. The outcome of the IRP permits the Minister of Energy to make a determination in terms of the Electricity Regulation Act on what type of capacity is to be built, when and by whom. Previous such ministerial determinations have resulted in the REIPPPP, the coal IPP and the gas IPP.
The IRP processes are fairly rigorous but it looks at the South African electricity supply sector as a holistic system. That is essential for planning processes but it does not take into account that for all practical purposes system is Eskom and Eskom has its own plans for itself. If, theoretically, Eskom’s interests were the same as those of the rest of the country, that would not be much of a concern. But they are not and Mr Koko and his management now have made it quite clear whose interests are to be pursued. They are not our interests…….
Eskom’s extraordinary ability to dissipate large amounts of physical capital on a more or less continuous basis is matched only by its ability to maintain and preserve political capital. This is not a new problem. The current Eskom management simply follows an established tradition extending back to well before our democratic dispensation. As DrGrové Steyn, of Meridian Economics, writing about Eskom a decade ago, points out: “It should not escape the attention that technological paradigms, construction choices and (lack) of demand-side strategies serve the pecuniary and reputational interests of engineers, managers and politicians… Unfortunately, the interests of these groups are often not adequately aligned with the social interest”. None of this should be surprising – all government sanctioned monopolies do the same thing.
Seen in this way, Eskom’s enthusiastic support for the completely ludicrous nuclear programme makes perfect sense. Very few sensible independent observers think it can proceed and Eskom has no chance of financing or, as we have seen, successfully project managing any such programme. It is more than likely that most senior managers within Eskom know this too – as their own 2008 study showed. But there is a lot of political capital to be won by getting behind it. Again, dissipating physical capital and building political capital…….http://www.dailymaverick.co.za/article/2016-10-27-eskom-imperils-our-energy-security-it-is-long-past-time-to-liberate-the-grid/#.WBZ2hdJ95pg
South Africa: How Eskom paid for Gupta mine
Daily Maverick AMABHUNGANE 20 OCT 2016
South Africa: Cabinet to DISCUSS ESKOM’S ROLE IN NUCLEAR DEAL
CABINET TO DISCUSS ESKOM’S ROLE IN NUCLEAR DEAL AT NEXT MEETING http://ewn.co.za/2016/10/20/Cabinet-to-discuss-Eskoms-role-in-nuclear-deal-at-next-meeting
Minister Joematt-Pettersson said in October that Eskom was best-placed to drive the procurement process. Gaye Davis | 2 hours ago
CAPE TOWN – Minister in the Presidency Jeff Radebe says Cabinet will discuss a proposal that Eskom become the procurement agent for thecountry’s nuclear power programme at its next meeting.
Radebe was responding to questions after briefing on the outcomes of yesterday’s Cabinet meeting.
Energy Minister Tina Joematt-Pettersson said earlier this month Eskom was best-placed to drive the procurement process, while the Department of Energy would act as co-ordinator.
The plan to put Eskom in the nuclear driving seat is set to come before Cabinet in two weeks’ time.
Radebe says, “Eskom being the agency is going to be discussed in the next Cabinet (meeting).The minister of energy will be bringing forth those issues for finalisation by Cabinet.”
Joematt-Pettersson told Parliament’s energy committee earlier this month that Eskom will leverage its own balance sheet to raise the money needed.
Eskom says it wants the first of two nuclear reactors operational in 10 years’ time.
But a revised integrated resource plan, which tries to calculate the country’s long-term energy needs and ways of meeting them, has yet to be approved by Cabinet.
(Edited by Masechaba Sefularo)
East Africa’s water resources drying up as a result of climate change
Climate change killing East Africa’s water resources, UN warns, Daily Nation OCTOBER 20 2016 BY KEVIN J. KELLEY
One of East Africa’s (EA) most important sources of water is drying up due to the impact of climate change on Mt Kilimanjaro, the United Nations Environment Programme (Unep) warned on Wednesday.
Google keenly promoting wind energy in Africa
Why Google Cares about Wind Power in Africa Millions of people are coming online, and that requires (renewable) energy, Scientific American By Daniel Cusick, ClimateWire on October 12, 2016
The California internet giant has shown a growing interest in sub-Saharan Africa since it made its first cash outlay three years ago—a $12 million investment in the Jasper Solar Power Project in South Africa’s Northern Cape Province.
The 96-megawatt photovoltaic project, completed in 2014, was built by U.S.-based SolarReserve LLC and is capable of powering roughly 80,000 South African homes.
The Lake Turkana deal, whose financial terms were not disclosed, calls for Google to acquire 12.5 percent of the nearly $700 million project from Vestas Wind Systems A/S of Denmark after the wind farm is completed next year.
“We are investing in clean energy projects like Lake Turkana because they make business sense and can help accelerate the deployment of renewable energy,” a Google spokesperson said in an email to E&E News.
She added that the company sees “a large opportunity in fast-growing markets with rich renewable energy resources, where both the need and the potential are great.”
The ownership group includes lead developers Aldwych International Ltd. of Great Britain and KP&P Africa BV of the Netherlands, with additional financial support from international development funds in Norway, Finland and Denmark.
As with Jasper in South Africa, Google said its wind power investment “will help bring much needed capacity and stability to Kenya’s energy supply, reducing reliance on fossil fuels and emergency diesel generation while providing some of the most cost effective power in the country.”
In total, Google has committed more than $2.5 billion to 22 renewable energy projects around the world, mostly through power purchase agreements and direct ownership of wind and solar farms, officials said. Much of its purchased power goes to support massive Google data centers in the United States and Europe.
But the company sees a future in the developing world, where millions of new internet users are coming online annually……..https://www.scientificamerican.com/article/why-google-cares-about-wind-power-in-africa/
Something not quite right about South Africa’s plan for Eskom to finance nuclear build?
Eskom will finance South Africa’s R1 trillion nuclear plans: minister, Business Tech October 11, 2016 Energy minister Tina Joemat-Pettersson has told Parliament that South Africa’s ambitious and controversial nuclear energy plans will be entirely funded by Eskom, with no money coming from National Treasury.
The minister was briefing Parliament’s energy oversight committee on Tuesday.
The process around South Africa’s nuclear plans, which will see 9,600MW of nuclear power added to the grid, has been a mysterious one, where the DoE has not revealed any of the details surrounding the project – including its cost.
Conservative estimates have put the build at R500 billion, while experts have noted – taking into consideration the country’s much-delayed Medupi and Kusile power station builds – that costs may balloon to well over R1 trillion.
According to Joemat-Pettersson, Eskom will fund the entire build off its own balance sheet, and the funding process will be handled in the same way as the Medupi and Kusile projects.
No funds will come from Treasury or the fiscus, she said, with Eskom turning to global markets to raise money it needs.
Eskom’s handling of Medupi and Kusile have drawn much criticism as both projects have seen massive delays, labour issues and come in billions of rands over budget………
DA shadow minister of energy, Gordon Mackay, said that Pettersson’s announcement “is nothing short of an elaborate sleight of hand aimed at muddying the water and subverting effective parliamentary oversight over the R1 trillion nuclear deal”.
Mackay said that in designating Eskom as the procuring agent for the nuclear new build the following must be considered:
- The tender will be subject to Eskom’s board tender committee, the very same tender committee found to be corrupt by the Supreme Court of Appeal.
- The tender will be subject to internal Eskom processes, effectively shielding the nuclear deal from direct parliamentary oversight.
- A nuclear deal not directly subject to parliamentary oversight will cost more and be subject to greater levels of corruption, in the same way as Kusile and Medupi have been with regard to their association with Hitachi.
- While tax payers will not be directly liable for the build costs of the new build programme – like the costs of Kusile and Medupi – they will be passed onto consumers via higher electricity prices. Higher energy costs will kill economic growth and jobs.
“Far from providing much needed clarity and assurance, the Minister has created greater uncertainty and has all but ensured that Zuma and his cronies will enrich themselves at South Africa’s expense,” the DA’s energy lead said. http://businesstech.co.za/news/energy/139651/eskom-will-finance-south-africas-r1-trillion-nuclear-plans-minister/
The scandalous human toll of mining for lithium from cobalt – investigative journalism
We who advocate renewable energy systems, and new technologies need to be aware of the dangers of the mining and processing of rare metals such as lithium. The history of this industry is scandalous. AFP: China pays price for world’s rare earths addiction. But today, the exploitation of lithium miners continues.
THE COBALT PIPELINE Tracing the path from deadly hand-dug mines in Congo to consumers’ phones 
and laptops WP, by Todd C. Frankel September 30, 2016
The sun was rising over one of the richest mineral deposits on Earth, in one of the poorest countries, as Sidiki Mayamba got ready for work.
Mayamba is a cobalt miner. ….
This remote landscape in southern Africa lies at the heart of the world’s mad scramble for cheap cobalt, a mineral essential to the rechargeable lithium-ion batteries that power smartphones, laptops and electric vehicles made by companies such as Apple, Samsung and major automakers.
But Mayamba, 35, knew nothing about his role in this sprawling global supply chain. He grabbed his metal shovel and broken-headed hammer from a corner of the room he shares with his wife and child. He pulled on a dust-stained jacket. A proud man, he likes to wear a button-down shirt even to mine. And he planned to mine by hand all day and through the night. He would nap in the underground tunnels. No industrial tools. Not even a hard hat. The risk of a cave-in is constant……
The world’s soaring demand for cobalt is at times met by workers, including children, who labor in harsh and dangerous conditions. An estimated 100,000 cobalt miners in Congo use hand tools to dig hundreds of feet underground with little oversight and few safety measures, according to workers, government officials and evidence found by The Washington Post during visits to remote mines. Deaths and injuries are common. And the mining activity exposes local communities to levels of toxic metals that appear to be linked to ailments that include breathing problems and birth defects, health officials say.
The Post traced this cobalt pipeline and, for the first time, showed how cobalt mined in these harsh conditions ends up in popular consumer products. It moves from small-scale Congolese mines to a single Chinese company — Congo DongFang International Mining, part of one of the world’s biggest cobalt producers, Zhejiang Huayou Cobalt — that for years has supplied some of the world’s largest battery makers. They, in turn, have produced the batteries found inside products such as Apple’s iPhones — a finding that calls into question corporate assertions that they are capable of monitoring their supply chains for human rights abuses or child labor.
Apple, in response to questions from The Post, acknowledged that this cobalt has made its way into its batteries…….
Few companies regularly track where their cobalt comes from. Following the path from mine to finished product is difficult but possible, The Post discovered. Armed guards block access to many of Congo’s mines. The cobalt then passes through several companies and travels thousands of miles.
Yet 60 percent of the world’s cobalt originates in Congo — a chaotic country rife with corruption and a long history of foreign exploitation of its natural resources…..
In the past year, a Dutch advocacy group called the Center for Research on Multinational Corporations, known as SOMO, and Amnesty International have put out reports alleging improprieties including forced relocations of villages and water pollution. Amnesty’s report, which accused Congo DongFang of buying materials mined by children, prompted a fresh wave of companies to promise that their cobalt connections were being vetted.
But the problems remained starkly evident when Post journalists visited mining operations in Congo this summer. https://www.washingtonpost.com/graphics/business/batteries/congo-cobalt-mining-for-lithium-ion-battery/
Handing nuclear project to Eskom will limit South Africa’s Parliament control, and increase corruption
South Africa: Nuke RFP Delayed in Order to Give Eskom Greater Say and Avoid Parliamentary Scrutiny http://allafrica.com/stories/201609300697.html By Gordon Mackay, 30 Sep 16 At a cabinet briefing today, Minister in the Presidency, Jeff Radebe, confirmed that it was highly unlikely that the nuclear RFP would be issued tomorrow as announced by the Minister of Energy, Tina Joemat-Pettersson, three weeks ago in Parliament.
Minister Radebe also suggested that the delay in issuing the RFP is largely due to a decision by cabinet to strip the Department of Energy of its role as government’s designated procurement agent in favour of Eskom.
This must be seen for what it is – a blatant attempt by the Zuma administration to:
- side-line parliamentary oversight of the nuclear new build programme;
- block public debate on the need for additional nuclear capacity;
- create a veil of secrecy around the procurement process which would now be subject to internal Eskom processes and procedures;
- give President Jacob Zuma greater control of the nuclear procurement process.
Designating Eskom as the procuring agent of the state will fundamentally limit the role and capacity of Parliament to oversee the nuclear deal and, in doing so, increase the potential of corruption surrounding the trillion rand deal.
The DA rejects any attempt to designate Eskom, headed by CEO and Zupta buddy, Brian Molefe, as the procuring agent for nuclear. Eskom has proven with Medupi and Kusile that it is unfit to manage mega-projects. It has also proven that its governance procedures are lax and the Supreme Court of Appeal has found its Board Tender Committee to be corrupt.
The DA is further concerned that the nuclear new build programme will further be subject to undue influence by the President, who is the Chair of the SOE Co-ordinating Committee.
We will use every mechanism available to us to ensure that this deal – which we do not need and cannot afford – is not pushed through without proper parliamentary oversight and scrutiny.
President Jacob Zuma’s regime looking unsteady, with divisions over nuclear programme
Signs of a great rift over Zuma’s nuclear programme, Rand Daily Mail, RAY HARTLEY 30 SEPTEMBER 2016 In another indication of President Jacob Zuma’s dimishing influence, his headlong rush to build a ‘fleet’ of nuclear reactors has been halted. And there are signs that it is going to be cut down to size, if it goes ahead at all.
South Africa’s renewable energy success: why are they even considering nuclear power build?
Renewables Make Up 30% Of All South African Foreign Direct Investment. Why Is Nuclear Still On The Table? http://afkinsider.com/133425/renewables-make-up-30-of-all-south-african-foreign-direct-investment-nuclear-still-on-the-table/ By Dana Sanchez September 30, 2016 South Africa is delaying the procurement process for a controversial fleet of proposed nuclear power plants but the government remains committed to nuclear expansion, an official said Thursday.South Africa has the fastest growing green economy in the world, according to credit rating agency Moody’s.
“South Africa was the continent’s largest renewables market in 2015 in terms of asset finance for utility-scale projects and it saw the highest year-on-year growth globally,” said Christopher Bredholt, a Moody’s vice president, in a Sept. 16 report. Asset finance is usually used by businesses to lease equipment without having to buy it outright, according to Finance & Leasing Association.
South Africa had the highest growth globally for asset finance in 2015 at 300 percent, representing $4.5 billion, according to Moody’s.
South Africa’s nuclear power programme stalled
South Africa: Nuclear Plan On Ice As Eskom May Take Ownership AllAfrica.com 30 Sept 16 Early indications are that Eskom may ultimately be responsible for the management and implementation of South Africa’s nuclear plan and not the Department of Energy as had originally been planned.
At the same time the much anticipated request for proposal for the nuclear plan won’t be issued on Friday as mooted by Energy Minister Tina Joemat-Pettersson earlier this month.
Jeff Radebe, Minister in the Presidency responsible for Planning and Monitoring, reiterated at a cabinet briefing on Thursday that more consultations need to take place before a request for proposal (RFP) can be issued on 30 September 2016.
Joemat-Pettersson issued a statement a few hours after Radebe’s briefing, confirming this………..
At the time of the previous cabinet meeting on the issue of nuclear in December 2015, nuclear was going to be led by Energy,” Radebe said during question time on Thursday.
State-owned nuclear firm Necsa could also play a bigger role in the process. “Necsa has had discussions with government officials and Eskom – and there are clear indications that Necsa will play a major role as the primary nuclear centre of the country,” Necsa chair Kelvin Kemm told Fin24 on Thursday.
Asked during question time if he meant that Eskom instead of the DoE would be driving South Africa’s nuclear build programme, Radebe responded, saying when cabinet previously deliberated on the nuclear process in December 2015, the decision was that the Department of Energy would be driving the process. “If there is a change it will have to come back to cabinet for deliberation,” he said.
Radebe also repeated that the RFP would not be issued on Friday, despite previous assertions by Joemat-
Pettersson that the RFP was due for Friday. “There was no contradiction,” Radebe said with reference to Pandor’s statement on Tuesday.
“My understanding is that what minister Pandor was saying, due to the processes of consultation [and the fact that] processes had not completed, the RFP will only be issued after all those issues of consultation have been concluded and being brought back to cabinet. So I do not envisage that tomorrow on the 30 of September the RFP will be issued by the Department of Energy,” Radebe said.Source: Fin24 http://allafrica.com/stories/201609300935.html
South Africa Minister in the Presidency Jeff Radebe says NO DEALS SIGNED YET ON NUCLEAR PROGRAMME
NO DEALS SIGNED YET ON SA NUCLEAR PROGRAMME – RADEBE http://ewn.co.za/2016/09/30/No-deals-signed-yet-on-SA-nuclear-programme Minister Jeff Radebe says the request for proposals will clarify if the country can afford nuclear power.Clement Manyathela | JOHANNESBURG – Minister in the Presidency Jeff Radebe says no deals have been signed for the nuclear build programme and says the request for proposals will clarify if the country can afford it or not.
Energy Minister Tina Joemat-Petterssen was meant to issue a request for proposals for the nuclear build programme as part of the procurement process today but this has now been postponed to allow more time for further consultation.
Radebe says the request for proposal will be issued after consultations.
“The Minister of Energy issued a statement confirming that the request for proposals is not going to be issued until such time that we’ve concluded those consultation processes.”
He says it will also advise government on whether or not it can afford nuclear power.
“That’s precisely the reason why the proposal is going to be issued in order to understand whether, as the country, we’re going to be affording it in terms of testing the market.”
Risk of war in Africa escalates with rising temperatures
South Africa’s energy minister delays nuclear tenders
South Africa will delay tendering for new nuclear power stations after requests for consultation and discussion made it impossible to start the process by the end of September as initially planned, the energy minister said on Thursday.
A statement said energy minister Tina Joemat-Pettersson remained “fully committed” to plans for nuclear procurement. http://www.reuters.com/article/us-safrica-nuclear-idUSKCN11Z1SW
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