Press 2018

COURT RULES AGAINST NUMSA/TRANSFORM SA INTERDICT APPLICATION

The South African Wind Energy Association (SAWEA) has responded to the court’s ruling today, which has found against NUMSA/Transform SA’s application to bring an urgent interdict against the signing of the procured Renewable Energy (RE) Power Purchase Agreements (PPAs).READ MORE

SAWEA RESPONDS TO NUMSA’S MISLEADING ARGUMENTS

The South African Wind Energy Association is concerned that the arguments cited by NUMSA and Transform SA in their interdict application against renewable power purchase agreement (RE PPA) conclusion, are misleading. Job losses must be avoided wherever possible, but false claims do not enable sound decision-making.

“The attempt to halt conclusion of 27 duly procured Renewable Energy PPAs by NUMSA and Transform SA this week is based on questionable data and does not sufficiently take into account the long-term interests of South Africans”, said Brenda Martin, CEO of SAWEA.

Eskom power failures and unprecedented tariff increases over the past 12 years have taken a toll both on the economy and jobs. South Africa’s over-reliance on coal fired electricity clearly creates significant risks that can no longer be underplayed.

“The imminent closures of Eskom’s old coal fired power stations are inevitable and unrelated to the renewable energy procurement programme. The coal plants have reached the end of their useful lives and are now directly stranded by the new coal-fired capacity being brought online by Medupi and Kusile,” explained Martin.

Furthermore, it’s important to consider that Eskom’s older coal fired stations are currently exempt from meeting South Africa’s relatively lax environmental standards and negatively impact public health and environment of local communities. The reduction of fossil fuels is also critical for reducing our country’s disproportionate contribution to global greenhouse gas emissions and climate change.

“In addition to growing economic effects, South Africa cannot continue to ignore these large negative impacts on human health and the environment when much cheaper and cleaner job-creating options are now readily available, added Martin.

The global growth of low cost, clean renewable energy technologies provides a critical opportunity to reduce the economy’s exposure to the risks of job losses, of long-term tariff increases and of human and environmental health effects.

Bearing in mind that closures of older stations are not caused by renewable energy, SAWEA points out that NUMSA’s suggestion that “30 thousand working class families will suffer because of job losses” is clearly an error.  Publicly available information on Eskom’s power station employment figures shows that this figure is overstated by an order of magnitude.

NUMSA further claims incorrectly that IPP roll-out will raise the cost of electricity. It is noteworthy that the statement offers no reliable evidence in support of this falsehood. “The new IPPs will cost substantially less than the cost of Eskom’s new coal fired power from Medupi and Kusile, and are also expected to cost less than Eskom’s current average sales price of electricity,” stated Martin. From meticulous scientific research available publicly it is now also known that when the true economic, health-related and environmental costs of coal power is taken into account the cost-saving from new renewable IPPs is even greater.

WIND ENERGY COSTS FAR LESS – MAKING IT THE LOGICAL CHOICE

“South Africa should urgently restart its large scale renewables industry in order to benefit from the continued decline in renewables prices achieved globally and grow its green economy industrial base”, says Brenda Martin, CEO of SAWEA.

While South Africa’s renewables programme has been stalled over the past three years, falling prices for renewable power has led to exponential growth in investment and an accelerated Energy Transition globally.

The Energy Transition is punctuated by two critical tipping points. The first being when new renewables become cheaper than new thermal generation technologies.  South Africa has already moved past that point: the Department of Energy confirmed that the November 2015 Expedited Round bids for wind and solar power were 62c/kWh (2016 ZAR), significantly cheaper than new coal IPPs at around R1.03/kWh (2016 ZAR).  In fact, the costs of new wind and solar PV power is even lower than Eskom’s 2016/17 average price of electricity, by 20%.

The second tipping point happens when new renewables become cheaper than running existing thermal plant. Big energy hubs like the US, China and Germany are expected to reach this point by the early 2020s. A recent study published by leading national consultancy Meridian Economics concluded that Eskom’s growing surplus capacity accelerated the transition in relative energy economics and that the country has already crossed over this tipping point: it will be cheaper to close Eskom’s older power stations and rely on a combination of power from its newer (and more efficient) coal plant and new renewables. “South African electricity consumers would thus be better off if between three and five of Eskom’s oldest coal stations were shut down as soon as possible, rather than operated to their scheduled end-of-life, and the country’s energy needs were instead met by new renewable power producers” Martin pointed out.

The government’s REI4P has also contributed to the decline in renewables prices, through its competitive auctions, a successful model that has been implemented in SA since 2011. This national competitive auction programme has resulted in the procurement of 6.3 GW of independent renewable power projects, of which half had been connected to the grid by the end of 2017.  As a result of this consistent procurement, an entirely new green economy industry was spawned in South Africa, creating thousands of new jobs.

The tired, old critique that renewable power will reduce power system reliability is now completely debunked by sophisticated computer models run by both Eskom and numerous independent analysts. These models optimise the mix of generation choices to ensure a level of security of supply that is equivalent or even superior to what is currently achieved. The results consistently confirm that on a least-cost path most of South Africa’s new capacity will be renewable, with some system support from gas turbines, and a growing role for energy storage.

“In addition, it is worth considering that the CSIR and other research institutes have conclusively demonstrated that the option of new wind, solar PV and flexible generation capacity in South Africa delivers the least-cost electricity price trajectory in the years ahead to 2050 and beyond, as well as least water consumption, lowest carbon emissions and the most jobs,” concluded Martin.

SAWEA LOOKS TO NEW MINISTERS TO GET POWER PURCHASE AGREEMENTS SIGNED

The South African Wind Energy Association (SAWEA) has issued a statement in response to President Ramaphosa’s Cabinet reshuffle this week, which ushered Cabinet veteran Minister Jeff Radebe into the Energy portfolio with immediate effect.
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