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Task team to probe power utility’s green cost claim

Oct 30 2016 08:15
Yolandi Groenewald

A special ministerial committee will be set up to investigate Eskom’s concerns about renewable energy, and whether the power utility’s concerns about the high cost of it have substance.

Environmental Minister Edna Molewa made the proposal this week after Eskom was hauled before Parliament’s portfolio committee on environmental affairs to account for its U-turn on renewables.

The new committee will consist of the ministers of environmental affairs, public enterprises, energy, and science and technology, and will meet early next year.

In the past year, Eskom CEO Brian Molefe has suspended negotiations to enter into new contracts with independent power producers (IPPs) beyond the current bid window. Molefe and Eskom’s group executive for generation, Matshela Koko, have also been singing the praises of nuclear, believing that renewables were bankrupting Eskom and that they failed to perform when energy was needed most.

Philemon Mapulane, chairperson of the environment portfolio committee, told City Press the committee had invited Eskom to Parliament for two reasons.

“Firstly, we wanted to engage Eskom on its state of readiness to comply with the Paris Agreement as the biggest emitter in South Africa,” he said. “But we were also alarmed by Eskom’s public stance that it no longer supported the renewable programme.”

The meeting came ahead of South Africa’s expected ratification of the Paris Agreement, scheduled to be tabled in Parliament on Tuesday.

The agreement, signed in Paris in December, commits countries to a plan to lower its carbon emissions and move towards a low-carbon economy.

At the meeting, Eskom chair Ben Ngubane said Eskom remained committed to the Paris Agreement.

However, Ngubane told MPs that nuclear would be a big part of Eskom’s transition to a zero-carbon economy. Eskom believed the costs of renewables were simply too high.

But the committee took Eskom to task about its perceived abandonment of renewable power. Members asked Eskom to explain why they seemingly contradicted the country’s official energy policy of making renewables a significant part of South Africa’s energy mix.

Mapulane said the committee was worried about Eskom’s new stance. “We are concerned Eskom is moving away from a policy that was agreed by Cabinet.”

Ngubane said that Eskom was willing to discuss concerns.

Mapulane said it was important to note that cost could not be the only concern.

Treasury also questioned Eskom’s strategy this week when the mini budget was released. In seeming defiance of Eskom’s cost concerns, it said that South Africa’s integrated resource planning should take into account the falling cost of renewables and their possible use in generating electricity.

Both the environment committee and Treasury cited a recent report from the CSIR that supplementing renewables with gas could fulfil South Africa’s energy needs.

Mapulane said the committee was unanimous in its decision to ratify the Paris Agreement.

The environment department told the committee at the meeting that after ratification, it would complete draft carbon-reduction plans that would help companies achieve their carbon budgets.

Judie Beaumont, deputy director-general responsible for climate change and air quality, said Eskom was a critical cog in South Africa’s plan to lower emissions. If Eskom failed to take the necessary action, other industries would have to bear the brunt and commit even more, she said.

Eskom’s chief financial officer, Anoj Singh, said Eskom contributed about 44.5% to national greenhouse gas emissions, which currently fell within its allocated budget.

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