On Monday night electricity minister Kgosientsho Ramokgopa stated at a private event that Eskom closed Komati at a time when it was the best-performing power station, producing 1,000MW and will be replaced by 270MW of intermittent capacity.
He went further to explain that Eskom closed Komati because someone gave us money and no consideration was given to the Komati value chain. He speaks of an injustice that is unfolding in the name of a just transition and international obligations at the expense of South Africans and the sovereign.
Komati was at its decommissioning producing only 110MW and as per the MYPD5 application it had been scheduled for decommissioning because Eskom assumed it would have excess operational capacity and would not need Komati. As per the Integrated Resource Plan (IRP) 2019 Komati was deemed a power station with high production costs and was thus inefficient to run.
The complexity the minister finds himself in is that at some point Komati had been placed on cold reserve and was subsequently cannibalised for parts. An engineering dossier ignored by the previous executive indicated that Komati could have been returned to full capacity through significant investment instead of decommissioning.
One wonders what reasons Eskom gave the National Energy Regulator of SA (Nersa) when it cancelled the Komati generation licence. Surely Nersa would have wanted a valid reason for decommissioning 110MW when the country has been suffering a persistent supply and demand mismatch. And before you scoff at the insignificance of 110MW against an installed Eskom capacity of 49,000MW, be reminded that Eskom is now in negotiations with Electricidade de Mozambique to procure 100MW of capacity.
Over the next decade, almost 12,000MW of Eskom plant needs to be decommissioned. To avoid what might soon become a Just Energy Transition Investment Plan (JETIP) or Komati commission of inquiry, the reasons for decommissioning need to be ventilated before disrupting millions of lives.
In President Cyril Ramaphosa’s weekly newsletter of April 24, he stated that it is “necessary to re-examine the time frame and the process of decommissioning or mothballing coal-fired power stations temporarily to address our electricity supply shortfall”.
Ramokgopa reiterates that we can’t be guinea pigs who shut down firms for intermittent capacity while load-shedding and calling it transitioning.
On May 11, in parliamentary responses to allegations of incoherence in his cabinet regarding JETIP, the president said: “It’s not every day that you are able to pick up $8.5bn […] it’s a great deal of money. If we are not finally able to close that deal, it basically means that we lose that investment that could have come our way.”
If Ramokgopa is correct and this is all about money, then surely our “transitioners” are intellectually and morally bankrupt. One must ask: what is driving this JETIP? Why are we insisting on this model of coal displacement with renewables given that these megawatts can never be deemed economic, social or technical equivalents?
The conditions of the JETIP funding have never been made public, the flow of funds unestablished and parliamentary oversight lacking. What did the government sign us up for and where is the money? Who are the ultimate beneficiaries? What is the plan?
Commentators have warned that any further delays in concluding JETIP will place the “investment” at risk. Similarly, other commentators have warned that a haphazard approach to JETIP will lead to mass unemployment along the coal value chain, economic devastation and quite possibly social tension, especially in Mpumalanga. Recent media reports on the situation at Komati point to a confused and angry community.
At a recent financing summit in Paris, Ramaphosa stated that the social and economic realities of SA should be factored into the transition and that it is naive to commit to a long-term transition without sufficient funding.
With all due respect Mr President, the energy experts, academics and even laymen are not naive. Over the past two years they have gone to great lengths to bring this technical, social and economic dilemma to the fore. There is nothing just about SA’s transition.
• Mashele is an independent energy economist.
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