Finance Minister Pravin Gordhan‚ his deputy Mcebisi Jonas and National Treasurer director-general Lestja Kganyago kicked for touch on energy on Wednesday‚ refusing to give detailed answers to questions on the future energy mix and its financing.
No reference is made for or against the nuclear option in the Treasury’s medium-term budget policy statement documents. Gordhan‚ Jonas and Kganyago as the triumvirate at the head of the country’s fiscal governance dodged media questions on this.
The three also refused to discuss how Eskom‚ which already carries major contingent liability risks‚ can finance nuclear new build now that it has accepted the poisoned nuclear chalice from the Department of Energy.
On future energy supply‚ all Gordhan would say was that energy supply must stay ahead of the economic growth curve rather than follow it. He regarded the country’s energy-generation ability as more important than discussions on the composure of the energy mix, showing preference for coal‚ gas and renewables.
For his part‚ Jonas said the exact management of energy expenditure and energy mix would be decided after talks with Energy Minister Tina Joemat-Pettersson and Public Enterprises Minister Lynne Brown.
"Nuclear new build will only continue if it does not undermine the fiscal integrity of the country. The pace and scale will be important‚" said Jonas.
Further lack of appetite for nuclear new build was exhibited by Kganyago‚ who kept his focus firmly on collaboration with independent power producers‚ and kept the options on the future energy mix open rather than commit to anything specific.
In budget policy statement documents‚ scant reference was made to pressing energy issues.
The documents state lack of adequate electricity supply imposed severe costs on the economy‚ and government had worked hard to stabilise Eskom and increase participation of independent power producers beyond the sphere of renewables‚ to include coal and gas.
But the Treasury warns against the "dangers of overinvestment" in energy supply‚ noting that idle electricity capacity will require higher electricity prices.
Treasury also shows a strong appetite for renewables‚ noting their falling costs but omitting any reference to their lack of dependability.
It compliments Eskom for its renewed focus on maintenance work and its success in getting new power stations at Medupe‚ Kusile and Ingula operational‚ and says wind and solar photovoltaic generation is now cost competitive with gas and coal.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.