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Patel: Quick switch from coal will cost SA

Nov 08 2011 19:15 Sapa

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Cape Town - South Africa could not afford a dramatic switch from coal to green energy, Economic Development Minister Ebrahim Patel said on Tuesday.

Doing so would result in an electricity price spike that would destabilise the economy, he told parliament's economic development portfolio committee.

"We cannot abandon coal as coal contributes to the relatively low electricity prices we have," Patel said.

"Coal is a very cheap generator. We have to use our savings on coal to subsidise the entry into the market of renewable energy sources. We have a responsibility to balance these things."

The minister was briefing the committee on the government's plans for a green economy.

He cited the existing example of using a percentage of parliament's electricity bill to help fund the state's solar water heater programme, which he described as a "success story".

This showed it was possible to grow demand for a green product, and use greater production volumes to bring down costs over time.

According to the department, 100 000 low pressure solar water heaters have been installed in poor and rural areas.

About 40 000 of the more expensive high pressure models have been acquired by wealthier households in recent years.

New technology

Patel said his department was trying to forge an agreement with the insurance industry for the programme on replacing damaged geysers with the new technology.

He said research showed 200 000 households had to contend with burst geysers annually, creating a "fantastic" market opportunity for the solar heater project.

A deal to leverage finance from insurance companies was imminent.

It would include arrangements for cases where the replacement cost was higher than the current price of electrical geysers, he added.

The solar water heater project has created more than 500 jobs for previously unemployed people in poor rural areas.

But Patel said it was of concern that the project uptake has been highly uneven in different provinces.

About 20 000 solar water heaters were installed in the Eastern Cape, compared to only 400 in Limpopo.

He said he has taken the matter to cabinet, and plans are in the pipeline to ensure better rollout in areas where the project has failed to gather momentum.
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