A new Harvard study has found that, if the full lifecycle costs of coal in the United States were factored in to the electricity price, then the price would be an ADDITIONAL R0.75 to R2.15 /kWh!
And that is in the US. In SA, we burn worse quality coal… so why on earth are we even considering coal in our future?
Frank
Hmm, makes me wonder if there is some conspiracy theory going on here – could Juju be on the ESKOM payroll?
But seriously, for some time I have been warning that one of the under-rated risks to our future electricity generation is the availability of low-priced, environmentally-friendly coal. (OK, there is no such thing as environmentally friendly coal – that is a pipedream of the Carbon Capture and Storage people). But in terms of the actual resource availability, like most commodities, the available supplies seem to be over rated, the cost to mine are going up, and of course international demand is going up dramatically. Thus it is little surprise that ESKOM would like to see coal classified as a strategic mineral and ensure its own supplies.
Now to the shock of most of you, I am not necessarily against the nationalisation of mines and/or coal (I am certainly against the unregulated free market management of these resources). But perhaps there is another approach that should be considered in this debate.
Return ESKOM from a profit-driven company to a services company. At the moment, ESKOM is running like any normal business, i.e. for profit (and short term profits at that). It was this mind-set that lead ESKOM to speculate in derivatives, reduce their coal supplies at power stations, etc, as it made the books look good. What we need is ESKOM to refocus on delivering a service – namely low-cost, long-term sustainable electricity. Now their vision waffles on about this, but unless the financial motives of the employees change (i.e. not bonuses based on profit, but bonuses paid on long term secure electricity), ESKOM’s behaviour is not likely to change.
It is this shift that could bring Energy Efficiency to the fore, thus allowing us to delay the building of any new coal power stations, while we begin the switch to clean renewable fuels.
Frank
