Eskom CEO – “We Cannot Ignore Our Carbon Footprint”

  • Eskom CEO, Mr André de Ruyter, delivered a lecture at the University of Pretoria last night under the theme ‘A vision for a Restructured electricity supply industry in South Africa’.

De Ruyter outlined that South Africa per capita, is 25% more carbon intensive than China, and double the global average. “South Africa emits roughly half the total carbon emitted by the African continent, and Eskom emits about 44% of the total South African carbon emissions. We therefore cannot ignore our carbon footprint,” De Ruyter said.

“In addition, the world is penalising heavy carbon emitters. The European Union’s consideration to implement carbon export tax by 2023, as part of its ‘Fit for 55’ European Green Deal package, will have a negative impact on South African industry. If the proposal is adopted, the European Union will reportedly impose a levy on imports in carbon-intensive sectors such as steel from countries with lower environmental standards than itself.”

Other key points outlined by De Ruyter indicates that he eyes a more focussed transition to renewables:

  • The lengthy build times for new build coal (10-12years) and nuclear (12-15 years).
  • No one wants to finance new build coal projects.
  • New build gas generation plants requires 24 to 60 months to complete.
  • Solar and wind projects in comparison have shorter new build lead times (18-36 months).
  • The costs for renewable energy technologies continue to decline and will add generation capacity sooner than other technologies.
  • Pivoting to green energy will create a competitive advantage for South African exports.
  • Persisting with coal will lead to another era of isolation and punitive trade measures.
  • To make current and ageing power stations compliant, Eskom must spend more than R300-billion, money which Eskom does not have.
  • If Eskom embarks on the Just Energy Transition timeously, the funds allocated to for minimum emissions standards compliance can be used to build renewable energy.

In the Q&A session, De Ruyter expressed his views on the viability of LNG powered ships which gives an indication that Eskom may not be too keen to sign a 20 year power purchase agreement (PPA) with Karpowership SA. “We must wary of entering into long term contracts that bind us in a rapidly changing energy environment”, said De Ruyter without elaborating much further.

The Turkish led company has controversially been awarded preferred bidder status in South Africa’s Risk Mitigation IPP Procurement Programme (RMIPPPP) for 1220MW gas power generation via ships at three ports in the country. A rival bidder has claimed that the tender was rigged. South Africa’s Department of Forestry, Fisheries and the Environment recently rejected  all three EIA applications submitted by Karpowership SA because they were incomplete. Read more

In a surprise move, South Africa’s Mineral Resources and Energy Minister, Mr Gwede Mantashe, recently extended the deadline for preferred bidders in the RMIPPPP to reach financial close, by two months. Read more

Author: Bryan Groenendaal

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