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CLIMATE CHANGE AND ENERGY LAW

REACTION PAPER

Name:

Lucien Jacques Dominque Limacher

Date:

21 April 2016

Subject:

Renewable Energy and Climate Change

Focus Question: Analyses the argument that renewable energy is


not viable and sustainable in the socio-economic context of a
developing country like South Africa battling with energy poverty and
inequality

Introduction:
1. Many South Africans have asserted that renewable energy is not viable or sustainable in
the socio-economic context of South Africa.1 However, sustainability and viability cannot be
understood in the conventional sense when it pertains to the energy sector. Of course one
must not forget the conventional definition permeating from the Constitution and various
case law. However within the energy sector sustainability and viability must together with
the constitution and various case laws definitions, be dichotomised through the lenses of
the Trilemma Challenge2 which is reverberated in South Africas National Development
Plan.3
2. Notwithstanding what is stated above, the Trilemma Challenge comprises of three pillars,
energy security, energy equity and environmental sustainability. In deciding whether
renewable energy in South Africa can be sustainable or viable it is assumed that at the very
least the third pillar, environmental sustainability is met. It is common cause that renewable
energy is environmentally friendly and decreases greenhouse gases which increases life
expectancy and reduces illnesses such as asthma, respiratory allergies, lung cancer and
cardiovascular diseases. This paper will therefore focus on whether the other two pillars,
namely, energy security and energy equity, in the Trilemma Challenge can be met by using
renewable energy as the main driving forces for a sustainable and viable option within the
socio-economic climate of South Africa and calm the nerves by analyses some of the fears
south Africans have.
The First Pillar of the Trilemma Challenge: Energy Security
3. Energy security is defined as the low vulnerability of vital energy systems.4 In order to
attain this, two criteria play a critical role. The first criterion is the, effective management of
primary energy supply from domestic, external sources [and] the ability of energy providers
to meet current and future demands, the second criterion is the, reliability of energy
infrastructure.5
The effective management of primary energy supply from domestic and external sources and
the ability of energy providers to meet current and future demands:
4. The primary problem that South Africans have with renewable energy is that it results in
intermittent generation, as it is reliant on the sun shining and on the wind blowing [thus] it
only works when those resources are available.6 Therefore renewable energy cannot be a
base load power plant 7 and consequently it will impact the development of South Africa and

1
Pegels A Renewable energy in South Africa: Potential, barriers and options for support. 28.9 Energy policy pg. 4949, M Roussos, Energy Planning and Sustainability 2012 FOCUS 64-Keeping
the lights on (Helen Suzman Foundation Journal) pg. 69 74; Y. Groenewald http://city-press.news24.com/Business/SA-has-enough-wind-solar-energy-to-power-itself-20150712; 12-July-2015,
accessed on 24 March 2013.
2
.O. Wyman, World Energy Council: World energy Trilemma- Time to get real (2013) pg. 2. Energy Trilemma consists of three pillars: 1. energy equity, 2. energy security and 3. environmental
sustainability.
3
National Planning Commission, National Development Plan-Vision 2030 (NDP) pg. 141.
4
Edenhofer, OR et al (Eds) IPCC 2014: Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on
Climate Change (Cambridge University Press, 2014) Chapter 7, p5244.
5
Op cit fn 2, pg. 3.
6
M Roussos, Energy Planning and Sustainability 2012 FOCUS 64-Keeping the lights on (Helen Suzman Foundation Journal) pg. 74.
7
Y. Groenewald, http://city-press.news24.com/Business/SA-has-enough-wind-solar-energy-to-power-itself-20150712; 12-July-2015, accessed on 24 March 2013.

be unstainable for the socio-economic environment. This is incorrect for a plethora of


reasons however the four key reasons are detailed below:
4.1. Firstly, from a supply chain argument South Africa has an energy source (a
commodity) that can be supplied in perpetuity that is essentially free and which can be
used to generate electricity (see annexure A). As a result, South Africa is not subject
to international price fluctuations or supply disruptions of fossil fuel sources due to
shortages of stocks.8
4.2. Secondly, energy supply only needs to be available when demand is needed. It was
revealed that South Africas resources such as solar and wind power, follow the nations
electricity demand, meaning they generate power at the time of day it is most needed.9
Thus the issue of intermittence becomes less of an issue for energy security as energy
does not need to be generated constantly.
4.3. Thirdly, harnessing renewable energy at the primary source does not sit in one
geographical power plant. Thus if the country as a whole wishes to have a constant
electricity supply it can be achieved by having multiple locations for different power
systems. I.e. if we build enough wind capacity of 10GW per annum from various
geographical locations, the collective of those power plants can supply a constant of
6GW.10 Therefore by building renewable power plants in various geographical location
mitigates and puts to bed the saying no sun or no wind equals no electricity.
4.4. Fourthly, in the event that there is no wind in the entire country or that the sun is blocked
by a cloud that expands the entire country, renewable energy can be stored, albeit for
a short period of time. This no different to Eskom stocking and refilling the diesel
reservoirs in times of crisis to generate electricity for South Africans or putting
generators in streets when a sub-station blows or a power plant needs maintenance.
5. The second issue that South Africans have is that there is already an established coal
industry that gives South Africa the requisite energy demand and is more aligned to the
socio-economic environment for a developing country. Subsequently stopping this supply
or industry would make hundreds of thousands of people unemployed, destroy an entire
sector and prevents energy supply growth. Once again this is naively thought out. For the
following reasons:
5.1. It is common cause that our coal will run out some time in the future. A direct effect of
this is that our resource dependency on coal to generate electricity might take serious
strain in the future when more power plants are built. Furthermore South Africa currently
8
9

Department of Minerals and Energy Republic of South Africa, White Paper on Renewable Energy, November 2013, pg. x.
Y. Groenewald, http://city-press.news24.com/Business/SA-has-enough-wind-solar-energy-to-power-itself-20150712; 12-July-2015, accessed on 24 March 2013.
Op cit fn 6, pg. 74.

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exports most of its high grade coal oversea11 and is likely to run out by 2040.12 In order
to replace this demand we will have to export our lower-grade coal which is vastly
bigger,13 (due to guarantee and commercial business agreements) resulting again in a
supply constraint to South Africas energy. It must also be state that South Africa already
uses 62% of its coal to generate electricity.14

5.2. A direct consequence of the above foresaid will be that South Africa will have to start
importing coal due to supply shortage which will subject the country to international
price fluctuations and again make our energy sector unsecure.15 In so doing this we
destroy the cardinal rule of business and economic development, certainty! If the state
cannot guarantee the price and quantity of electricity then the state cannot guarantee a
constant supply of electricity needed to assist South Africa to grow. This will
unswervingly impact the socio-economic environment in South Africa as the economy
will become stagnated.
5.3. The development of the renewable sector is not the death of the coal industry, which
currently exports 28% of its coal. South Africa desperately needs foreign revenue for
socio-economic development projects and as such coal exports can provide that
important source of foreign revenue for the country.16 That being said it is true that we
will be indirectly impacting the international climate change regime. However, coal
power stations are being built regularly throughout the world and South Africa has one
of the biggest reserves of coal.17 South Africa cannot afford to not exploit this
opportunity in order to become an industrial country. Therefore if Eskom redirects its
efforts to develop the renewable energy sector it will indirectly force the coal sector to
look elsewhere i.e. exporting, which will generate revenue for the country rather than
an expense for the end user.
6.

Despite all of these concerns, it is clear that the real reason why there is this entrenched
fear around renewable energy in South Africa is due to the professional industry not having
the capabilities and fearing the unknown. There have been arguments that South Africa
should stay with coal fire power station because there is an establish industry.

7. Although this is correct in certain respects, new developments always has new technology
applied, which may cause issues with the implementation of such power stations. For
example, Medupi and Kusile power stations have had serious technical issues due to new
technology being implemented by Alstom18 and other private sector construction
11

A. Eberhard, The Future of South African Coal: Market, Investment and Policy Challenges, Programme on Energy and Sustainable Development, Stanford 2011, pg. 15.
The South African Coal Roadmap (SANEDI 2013) pg. 18 20.
Ibid.
14
http://www.energy.gov.za/files/coal_overview.html accessed on 14 April 2014.
15
Op cit fn 8 pg. viii and ix.
16
Op cit fn 12 pg. 18.
17
Author Unknown, http://www.economist.com/news/business/21600987-cheap-ubiquitous-and-flexible-fuel-just-one-problem-fuel-future, 19-April-2014; accessed on 14-April-2015.
18
, Author unknown, http://www.fin24.com/Companies/Industrial/Eskom-Alstom-part-ways-on-Kusile-20150320, 20-March-2015, accessed on 15-April-2016, Kusile Power Station will incorporate
Alstom advanced wet flue gas desulphurisation technology and it will also be equipped with Alstoms lasts automation system, ALSPA 6.
12
13

companies.19 Therefore this fallacy that we have an establish sector is not entirely true. The
summation by M Roussos cannot be better stated in this regard, They tend to be
conservative when faced with having to choose between replying on the resources they
have always used and whose peculiarities they know and feel conformable with, versus
changing to new unknown technologies. This will not change unless and until we build up a
difference experience base in this country.20

8. As a result, if we need new technology every time something is going to be built would it not
be better to concentrate South Africas efforts on the renewable energy sector which will
cost us less in the long run.
The reliability of energy infrastructure
9. One of the biggest energy security issues facing developing countries is the necessity to
dramatically expand energy systems [including energy infrastructure] to support economic
growth and development.21 This quote acmes the very essence of what South Africa needs.
South Africa in its current state uses more electricity than it produces22 and is growing by
4% every year.23 As a result South Africa will need 80GW by the end of 2025 in order to
sustain its economic and social reform growth path. Therefore South Africa needs energy
infrastructure that is fast, reliable (reliability was dealt above under the intermittence issue)
and cheap.24 Renewable energy is that catalyst for the following reasons:
9.1. The speed in which renewable energy infrastructure can be constructed is far quicker
than that of an ordinary coal fired power plant. If we look at Medupi, construction
commenced in May 2007,25 whereas the first unit only came into operation on 24 August
201526 almost 12 years later and only producing 793 megawatts. Comparing this to the
renewable energy sector, 92 projects have been issued in 4 years and within those 4
years already 1253 megawatts of electricity are being produced and available to the
grid.27 This unlocks a rapid large scale development of energy generation
infrastructure.28
9.2. In terms of pricing of renewable energy plants (just the construction costs) South Africa
has invested R600 billion for the 4 bid process.29 This is more expensive than building
a coal fired power station. Kusile was estimated, upon completion to costs R180 billion
and Medupi was estimated upon completion at R300 billion. However, the cost of a coal
fired power stations fails to take into consideration other costs. For example
19

Author unknown, http://www.ee.co.za/article/new-technical-problems-medupi-place-south-africa-risk.html, 7 January 2015, accessed on 15-April-2016.


Op cit fn 6 pg. 74.
Edenhofer, et al (Eds) IPCC 2014: Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on
Climate Change (Cambridge University Press, 2014) Chapter 7, p5244.
22
Pegels A Renewable energy in South Africa: Potential, barriers and options for support. 28.9 Energy policy pg. 4947.
23
Ibid pg. 4949.
24
State of Renewable Energy in South Africa, Department of Energy Republic of South Africa, 2015, pg. 92.
25
Author unknown, http://www.eskom.co.za/Whatweredoing/NewBuild/MedupiPowerStation/Pages/Medupi_Power_Station_Project.aspx, no date, accessed on 01-April-2016.
26
Author unknown, http://www.southafrica.info/services/government/medupi-240815.htm#.Vv4t_Pl96Uk, 24 August 2015, accessed on 01-April-2016.
27
Op cit fn 24 pg. 93.
28
Ibid pg. 92.
29
Ibid pg. 94.
20
21

maintenance of the plant, health issues, environmental costs factors30 such as usage
of water and air pollution and the fluctuating price of fossil fuels. All factors taken into
consideration, it is actually cheaper to build and maintain renewable power plants, does
not affect human health and has very minimal effects to the environment, ultimately
reducing state expenditure.
The Second Pillar of the Trilemma Challenge: Energy Equity
10. Energy Equity is defined as accessibility and affordability of energy supply across the
population.31 However equity must also extend to job creation as it must allow the local
communities to have a buy in into the programme and benefit from the renewable energy
industry.
Accessibility:
11. Supply of electricity is pivotal to ensure that economic activity and welfare are not

disrupted.32
11.1.

In terms of accessibility renewable energy has a far greater reach due its
construction and design volatility. In other words renewable energy projects can
be built at location in terms of small scale construction, it can be built off the grid
i.e. decentralised power plants or it can be built on a mega scale and feed into
the electricity grid provided by Eskom. This means that energy can be supplied
according to the communitys geographical location or needs.

11.2.

It is understood by all that the rural community have been hardest hit in terms of
lack of development and social reforms. This is due to, inter alia, the lack of
electricity supply in the rural area. However due to the volatility of renewable
energy projects, it has the potential to unlock that energy supply and allow rural
community access to basic government services such as healthcare,33
education and water supply. Furthermore in the privacy of the home
electrification can assist with cleaner drinking water (as it can be boiled), longer
hours in the evening can be dedicated to education34 and access to technology
such as the internet or hot water.

Affordability:
12. In the past it was correct to say that renewable energy was more expensive, the first bid
for renewable energy was double the price35 (237c/kWh) of what Eskom was selling its
electricity which made renewable energy unsustainable. However, if we look at Eskoms

30

Op cit fn 8, pg. x.
Op cit fn 2 pg. 3.
Department of Energy, http://www.gov.za/about-sa/energy, no date, accessed on 1-April-2016.
33
Op cit fn 30 pg. ii.
34
Omorogbe Y Promoting Sustainable Development through the Use of Renewable Energy: The role of the law in Zillman D et al Beyond the Carbon Economy: Energy Law in Transition (OUP,
2008) pg. 39-40.
35
The Tariff for the first bid was at 237 c/kWh.
31
32

recent tariff revision the cheapest household in 2016 in terms of Eskoms table formula will
be paying 91.46 c/kWh36 in contrast the renewable energy tariff of 70c/kWh37 offered during
the fourth bid shows that renewable energy has become cheaper than the conventional
electricity supplied by coal. The primary reason being attributed to a competitive market
allowing new technologies to compete with each other.38 This is important in terms of a
socio-economic point because it means the end user can actually pay less for electricity
and have a bigger spending power on other commodities.
Job creation:
13. There has been a huge critique that renewable energy does not generate enough job
creation. This is incorrect, within a very small space of time, 4 years, the renewable
energy sector has created 54 044 direct jobs and has the potential to create 462 000 indirect
jobs due to development in rural areas such as the Northern Cape and Eastern Cape (both
of these provinces are among the poorest provinces)39 which is where most of the renewable
energy projects will be constructed.
Conclusion:
14. In light of what has been state above it is clear that renewable energy is a vital component
in developing South Africas economy and addressing the social reforms desperately
needed for the poorer community. It allows energy security to be stable and addresses both
accessibility and affordability of electricity. Failure to act on developing this industry will only
worsen South Africas plight. Currently Eskom is at the mercy of big mines using our
resources to sell it back to the South African market enriching only a few and costing the
tax payer millions of rand. It is the authors view that not only is renewable energy viable
and sustainable in the socio-economic context of a developing country like South Africa but
it is the only option for the future of South Africa.

36
Eskoms 2016/2015 changes for home light, Eskom Website http://www.eskom.co.za/CustomerCare/TariffsAndCharges/Documents/Homelight%20Connect%202016_template.pdf accessed on
15-April-2016, read with State of Renewable Energy in South Africa, Department of Energy Republic of South Africa, 2015, pg 76
37 Op cit fn 24, pg 76, This is a 68% reduction in price since the first bid in 2011.
38
Op cit fn 24, pg. 76.
39
Op cit fn 24 pg. 135.

The colour correlates to the speed of wind consistency. Therefore


red wind traveling at 100m per second and blue wind traveling at
2o meters per second.

The colour correlates to irradiation of temperature for the past 14


years. Red being the highest KW/m2