Energy Minister Jeff Radebe
State-owned power utility Eskom will not be closing its own coal plants to accommodate the offtake requirements of the coal independent power producers (IPPs), Energy Minister Jeff Radebe said in a Parliamentary reply this week.
“Eskom’s policy on the decommissioning of its fleet is informed by an optimal balance of cost efficiencies, reduced capacity and carbon emission considerations,” he explained.
He added that Eskom’s planned decommissioning of the Arnot, Camden, Grootvlei, Hendrina and Komati coal-fired power stations had already been projected in the Integrated Resource Plan 2010, which indicated that the decommissioned capacity would be replaced by about 8 800 MW of new coal-fired power generation capacity through Kusile and Medupi.
Moreover, he pointed out that the efficiency of Eskom’s older coal-fired power plants had deteriorated rapidly and that these plants cost substantially more to operate, resulting in a spillover into tariff increases.
Radebe said government’s energy policy is premised on a balanced energy mix that recognises the country’s natural endowment of energy carriers, including coal.
Moreover, the Minister, in reply to a question raised around Eskom’s electricity production, remarked that Eskom is not required to produce less electricity as a consequence of IPPs.
“The wind and solar photovoltaic technologies introduced through the renewable energy programme do not displace coal-fired power stations as these technologies do not provide baseload capacity,” he said.
Radebe was, meanwhile, also asked whether two coal IPPs would give rise to at least 5 000 jobs during construction.
He replied that, in terms of the bids received in response to the request for proposals (RfP) for coal IPPs, the preferred bidders set out 7 943 jobs for project one and 2 377 jobs for project two, both during the construction phase.
Jobs during operations, as set out in the bids, included 10 678 for project one and 4 626 for project two. These figures were calculated on the basis that one job equates to 12 person-months and one person-month is 160 working hours.
“If one were to assume the construction period to be four years with the operations period being 30 years, the total direct jobs during construction would be equivalent to having about 2 580 people working for four years during construction and about 510 people working for 30 years during operations,” he explained.
However, since jobs are provided in job years as per the RfP, the figures are likely to be understated.
Further, Radebe noted the job numbers directly associated with the coal IPP plants do not include the indirect jobs created as a result of the new mine, which one of the projects will be dependent on, as well as the jobs created in relation to the discard coal supply, which the other project will be using.
The job numbers further exclude indirect job creation in respect of manufacturing and limestone supply.