Two independent coal power stations to cost South Africans extra R23 billion and should be scrapped

1 October 2018

In a parliamentary reply to a DA question, the Department of Energy (DOE) has confirmed that the two additional coal Independent Power Producing (IPP) projects that have been committed to, will cost the consumer an additional R23 billion. This will definitely be passed onto the consumer through higher electricity tariffs.

Given the environmental as well as the financial burden of the two coal IPPs and in light of a revised Integrated Resource Plan (IRP) 2018 which is focused on renewable energy, the DOE should immediately resolve to cancel these two coal IPPs and proceed to fill the gap with a combination of solar and wind.

On top of the higher tariffs, a study by UCT’s Energy Research Centre, has indicated that these coal IPPs would add R28 billion to South Africa’s costs in trying to keep our greenhouse gas emissions within international commitments made in the Paris Agreement.

Financial institutions have also begun to take note of the environmental concerns with a new policy position to not fund any future coal projects.

With the DOE and a number of energy institutions unable to table annual reports in time, the Minister of Energy, Jeff Radebe, needs to provide clear leadership and resolve these issues along with the cancellation of the two coal IPPs urgently

South Africans are hard-pressed in this current economic climate, with rising unemployment, increased VAT, personal taxes and yet another petrol increase. The last thing we need is an unnecessary additional electricity tariff hike due to two coal power plants.

Issued by Tandeka Gqada, DA Shadow Deputy Minister of Energy, 1 October 2018