Question NW2141 to the Minister of Energy
02 July 2018 - NW2141
Dlamini, Mr MM to ask the Minister of Energy
What steps have been or will be taken to address the impact of coal Independent Power Producers (IPPs) on Eskom, in view of the fact that Eskom may have to close certain of its own coal plants early to meet the offtake requirements of the coal IPPs, and even earlier in a low greenhouse gas emission scenario, and will be faced with having to sell electricity at very high prices in circumstances where more and more electricity consumers are defecting from the grid?
Reply:
Eskom is not closing its own coal plants early as a result of offtake requirements of the coal IPPs. Eskom’s policy on the decommissioning of its fleet is informed by an optimal balance of cost efficiencies, reduced capacity and carbon emission considerations. Eskom’s planned decommissioning of the Arnot, Camden, Grootvlei, Hendrina, Komati coal-fired power stations was already projected in the Integrated Resource Plan (IRP) 2010 which indicated that the decommissioned capacity would be replaced by approximately 8 800MW new Coal Generation capacity through Kusile and Medupi. The efficiency of Eskom’s older coal-fired power plants have deteriorated rapidly and these plants cost substantially more to operate, resulting in a spill-over into tariff increases.
Standard impact mitigation measures at a local and regional level can be planned on the basis of Paris Agreement and OECD just transition principles which are largely based on the International Labour Organisation (ILO) just transition guidelines.
Government’s energy policy is, among others, premised on a balanced energy mix recognizing our country’s natural endowment of energy carriers, including coal., Government’s policy also supports techno-economic solutions for power production from environmentally hazardous discard coal stock-piled over years above ground. Notably, one such solution is presented by one of the coal IPP projects as a first of kind in South Africa.
Government’s policy position to reduce carbon emissions as well as continue with the new build coal plants, contained in its 2015 submitted Nationally Determined Contributions, remains unchanged.
Approved / Not Approved
Mr J T Radebe, MP
Minister of Energy
Date: