Posted by: Saving Water SA (Cape Town, South Africa) – partnered with Water Rhapsody conservation systems
24 January 2010
Cape Town – The assertion by Brian Dames, chief operating officer for generation at Eskom, that renewable energy is expensive, is untrue and not based on any factual analysis.
The statement is refuted by Eddie O’Connor, chief executive of Mainstream Renewable Power, a British group that has invested in wind-farm development in South Africa.
During the public hearings on Eskom’s application for tariff increases held by the National Energy Regulator of South Africa, Dames declared that South Africa did not currently have renewable energy resources able to deliver base-load electricity.
Tariff incentives for renewable energy range from 96c to R5.50 per kWh, compared with Eskom’s prices which will rise from about 30c to 82c if its application for increases succeeds.
In his web journal O’Connor writes that the average capital cost of coal-fired power stations is globally the same as that of wind farms.
Coal is expensive and coal mines’ stocks are being depleted, whereas wind is free and blows uninterruptedly.
If a coal tax is levied on the tons of carbon dioxide released by coal-fired power stations, this will dramatically increase the cost of producing electricity from coal, while electricity from wind farms will not attract this tax.
O’Connor points out that coal-fired power stations use a lot of water, which is becoming increasingly expensive and scarce in South Africa, whereas wind power does not need water.
He highlights the pricing risk of coal, which is an internationally traded raw material, the price of which has in the past ranged from $80 to $220/ton.
Mark Tanton, deputy chair of the South African Wind Energy Association, says Eskom has so far received applications for wind-power projects that could generate more than 10 500MW.
As soon as the purchasing agreements can be finalised, the 28 independent producers who have applied for network connections could be delivering at least 4 000MW of wind power by 2013.
O’Connor says his company is prepared to invest a great deal of money in South Africa to develop wind farms, but this would require long-term targets and an investor-friendly regulatory environment.
South Africa needs a transparent process to connect independent power producers to the national grid.