Renewables have no financial benefits for Eskom - Koko

Johannesburg – Using renewables on one particular day cost Eskom R52m, said interim chief executive Matshela Koko.

Koko was speaking at a briefing on the state of the system at Megawatt Park in Sunninghill, Johannesburg on Tuesday. He explained that including renewables in the energy mix to meet demand only saves coal, not money.

“All what renewables do, there’s no science. It is quite simple. It’s not difficult …. they reduce coal, burn less [coal] and burn less diesel. They only burn less coal, nothing else,” he said.

Using the example of 31 August 2016, the power utility met the energy demand without the use of renewables at an average cost of 23c/kwh.  Including solar and wind power pushed the average cost up to 193c/kWh, said Koko.

This amounted to R52m owing to the additional cost of renewables, he explained.

On an average day renewables cost R9bn, said Koko.

Mentioning a CSIR study that indicated renewables could benefit the economy by saving R5bn, Koko said the power utility was not in a position to defend itself because load shedding had compromised Eskom.

“When we are compromised, we are disempowered and can’t talk back… you need to fix your house. Once your house is fixed you can talk back. Our house is fixed,” he said.

Ratings agencies and renewables

Referring to ratings agencies, Koko said that on two occasions Moody’s raised red flags on Eskom’s intention to sign on renewable independent power producers (IPPs).

“On 20 September and 5 December, they asked us why we signed renewable IPPs, because we can’t afford them,” said Koko. 

Public enterprise minister Lynne Brown added that if Eskom is ready to run with IPPs, they should go ahead and do so.

“Of course the IRP [Integrated Resource Plan] will give us more certainty on what they should be able to do,” said Brown.

Government believes there should be an energy mix, which can include IPPs, coal, gas and nuclear, said Brown.

“We are not putting a stop on what Eskom has to do,” she said.

By mid-February there should be more clarity on the affordability and what is realistic regarding IPPs, she added.