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Unions enter murky info war over Eskom, IPPs deal

Mar 06 2017 19:26
Matthew le Cordeur

Cape Town – A murky information war about the economic benefits of green energy is heating up as labour unions embark on marches to protest against Eskom signing on more renewable independent power producers (IPPs).

The Coal Transportation Forum - which brought traffic to a standstill in Pretoria last week - and the National Union of Mineworkers (NUM), which is planning another march against IPPs, have both pointed to the introduction of renewable IPPs as the source of their concern.

READ: Coal truckers demand slowdown in govt IPP programme

In a statement on Monday, NUM listed various reasons why IPPs are bad for the country, citing job losses and higher electricity prices due to the higher cost of wind and solar energy. This echoed the Coal Transportation Forum’s statement last week, which seeks a reduction in IPPs going live.

Responding to the strike last week, the South African Renewable Energy Council (Sarec) raised concern about who was providing false information about IPPs, “particularly in the light that … (Eskom acting CEO Matshela) Koko has been constantly posting in social media parroting the same ‘facts’ …”

The murky information war comes as Eskom committed to sign power purchase agreements with 27 IPPs after a lengthy standoff caused investor concern in the sector.

Eskom has continuously shown reluctance to sign additional agreements with state-authorised renewable energy projects, saying they are too expensive and not needed amid a slump in electricity demand.

READ: Eskom acting CEO weighs in on Tshwane coal truck protest

While still unhappy with the concept of signing on the IPPs, Eskom committed to sign the price agreements after President Jacob Zuma’s 2017 State of the Nation Address effectively instructed the utility to stop blocking the process.

The decision to sign renewable IPP is government policy and Eskom is simply implementing this, Eskom spokesperson Khulu Phasiwe told Fin24 on Monday.

“Our government’s broader plan is to have an energy mix that consists of coal, renewables, gas, nuclear, biomass and other available energy sources as envisaged in the existing Integrated Resource Plan,” he said. “Our aim as a nation is to reduce greenhouse gas emissions by using less coal and introducing new technologies.”

Causing labour’s concern is Eskom’s strategy to achieve this, as articulated by Phasiwe below:

“Over the next five years, coal transported on the road by trucks will be reduced from 40.4 million tonnes per annum to 15.6 million tonnes per annum,” he said.

READ: Eskom sets the record straight on renewable energy

"In order to create space for the renewable energy projects, at least two units of Komati power station have already been shut down,” said Phasiwe. “Other power stations that will be gradually shut down over the next five years are Camden, Kriel and Hendrina.”

However, instead of protesting the overall energy mix by government, the unions are targeting IPPs.

NUM said on Monday that it is “extremely saddened that (the) Eskom board has taken a decision to shut down five power stations without consulting the unions as stakeholders”.

“We will have a national march that will begin as soon as possible to protest against the signing of the inclusion of IPPs to the national grid,” it said, following a weekend meeting on the topic.

The union also called for the resignation of Public Enterprises Minister Lynne Brown, “as she has failed to meet the NUM and other unions several times when she was invited”.

Sarec said blaming IPPs is inaccurate, as government is embarking on a 9.6 GW nuclear procurement programme that would also impact the future of coal power stations.

READ: Eskom to sign IPP agreements shortly - Joemat-Pettersson

“Eskom has its own ambition to procure and own 9.6 GW of nuclear plant by 2030 as anticipated in the 2010 Integrated Resource Plan and which is consistent with the utility’s support for the Carbon Budget Nuclear scenario of this resource plan,” said Sarec chairperson Brenda Martin.

“The renewable energy sector globally has shown itself to be even more successful at job creation than the coal or nuclear industry and we believe that we will prove that in South Africa,” she said.

She was responding to strike action by the Coal Transportation Forum in Pretoria last week.

Martin said that the 2016 update of the IRP reveals that Komati, Hendrina, Arnot, Camden and Grootvlei power stations are due for decommissioning by 2030.

“Eskom plans to decommission some 27.5 GW of coal-fired plant by 2040, which will result in a total of 12 thermal plants being closed,” she said. “Eskom has performed a life extension exercise to confirm the feasibility of repowering the plant, which has been shown to be too expensive.

“The construction of the Medupi and Kusile coal-fired plants which would replace a number of these old plants will result in a reduction in Eskom’s coal procurement by some 30 million tonnes per annum.”

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