Renewables cheaper than coal

It will cost the country more to keep its ageing coal-fired power stations running than to invest in new renewable energy plants.

This is according to Professor Mark Swilling from the Centre for Sustainability Transitions at Stellenbosch University.

Swilling said this in response to recent remarks from Electricity Minister Kgosientsho Ramokgopa about his preference to keep the country’s coal-fired power stations running.

Ramokgopa said that Eskom requires a significant investment to improve the efficiency of the utility’s generation fleet.

Currently, 47% of South Africa’s generation capacity is offline, and most power stations have a concerningly low energy availability factor (EAF).

Swilling argued that investing more money into these power stations would be more expensive and less reliable than investing in renewables.

“It is now a proven fact that the Levelised Cost of Energy (LCOE) supplied by newly built renewable energy plants is lower than the cost of keeping our old inefficient coal-fired power plants running beyond their dead-stop dates (especially at low EAFs),” Swilling said in a Daily Maverick article.

He said the costs of renewables had dropped almost 90% as the technology has gone to scale and matured.

Another reason renewable energy could work out less expensive than coal is a lack of funding for coal-powered energy.

“Plenty of funding is available for renewables at a very low cost per kWh,” he said. “There is virtually no funding available for investing in coal, especially ageing polluting coal-fired power plants – and if there is, it will be very costly.”

Public enterprises minister Pravin Gordhan recently estimated that a complete retrofit and refurbishment of South Africa’s ageing coal fleet to meet emission standards would cost around R400 billion. 

South Africa’s Energy Action Plan says there is 30GW of renewables in the pipeline, which would ensure energy security for the country and eliminate load-shedding.

The tax relief and incentives announced for rooftop solar earlier this year could also play a role in securing the country’s energy supply. 

Swilling said that load-shedding could be ended in two years by investing in renewables, whereas Ramokgopa’s plan would only yield results in three to five years at best.

Even if Ramokgopa’s plans to fix the coal-fired power stations worked, those stations would have to be taken off the grid for extended periods. This would detract from the country’s generation capacity and worsen load-shedding.

The country’s Energy Action Plan realises the need to have new generation capacity to allow for the maintenance of existing plants and points to renewables as a quick and affordable way to achieve it.

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Not a perfect solution

Political analyst JP Landman recently said in a Nedbank webinar that renewable energy is not the perfect solution to the country’s electricity woes.

South Africa has load-shedding because of a shortfall in generation of about 6,000MW. This 6,000MW baseload amounts to 18,000MW renewables and battery capacity – or three times more.

South Africa would therefore need to install 18,000MW of renewables to end load-shedding.

However, installing just 5,000MW of renewables would allow the country to cut load-shedding by 61%, according to the Meridian Economics report, “Resolving the Power Crisis: Insights from 2022”.

“Our previous research demonstrated that load-shedding in 2021 would have essentially been eliminated by an additional 5,000MW of Renewable Energy (RE) capacity,” said the report. 

“The same 5,000MW of additional capacity would have eliminated the lion’s share (between 71% and 92% depending on diesel supplied to Open Cycle Gas Turbines) of the much larger load-shedding experienced in 2022.”

“This highlights the urgency of ensuring that all possible policy and regulatory steps have been taken to enable the rapid roll-out of renewables across the spectrum.”

*Headline image: Mark Swilling SOURCE: World Economic Forum/Walter Duerst