Separating Medupi fact from myth – and helping some critics get off Dames’s back

By Alec Hogg

After lengthy delays in the commissioning of Medupi – and well publicised cost overruns – South Africans have been fretting that the new super power station will be paying for it through high electricity tariffs for decades. So I asked Eskom’s “Mr Reliable” Andrew Etzinger to help us dispense with the idle chatter and providing a hard figure for the final cost of Medupi.

The good news is that even after all those escalations, electricity produced by the new super power station is still comfortably under the global average. Eskom financial whizz Deon Joubert says Medupi’s all-in production cost comes in at $3 000/kW, putting it in the bottom quartile of modern plants worldwide (ie 75% produce at a higher cost).

The international range for these plants is between $2 500 and $6 800/kW. As for the cost escalations, Joubert says the biggest single jump (130%) was in 2005 when the project design more than doubled from 2 100 MW to 4 800 MW. Nice to hear the truth is more palatable than the myth. Hopefully this will get at least some critics off the back of former CEO Brian Dames, a highly competent engineer and thoroughly decent man.

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