Coal cliff for S.Africa on horizon as electricity demand grows - CNBC Africa

Coal cliff for S.Africa on horizon as electricity demand grows

Southern Africa

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“Coal is our primary source of energy, 85 per cent, and it’s our primary source of revenue whether it be from power generation or export, so it’s very significant in our economy,” Shava director Andrew Kinghorn told CNBC Africa on Friday.

“As the price of electricity goes up, it kind of pulls a handbrake up in terms of all our growth, in terms of job creation. As our price of energy goes up, we need to be aware of the implications.”

The development of new technologies in coal energy production is in progress and is expected to decrease the levels of pollution that comes with electricity production through coal.

 As other renewable energy options become cheaper, they can be integrated into South Africa’s electricity production process. Renewable energy alternatives will also reduce the country’s dependency on coal for electricity production.

“We will have as a base load power in this economy, for the next 50 years, coal. We’ve got to go back to the economic needs of the country, which are growth and poverty alleviation, and that means stability of supply, security of supply of electricity, globally competitive prices,” said Rob Jeffrey, managing director at Econometrix.

“At the moment, we’ve been moving very quickly in a particular direction, which has involved carbon, the move to renewables, which is pricing ourselves globally in an uncompetitive manner.  That causes lack of jobs, and we have a major problem going forward if we move too quickly.”

A delay in Eskom’s Medupi power station, which was scheduled to begin electricity production by the end of this year, will set back electricity generation at a time when delays are becoming financially costly.

“We’ve had since 2008 to get our ducks in a row. Unfortunately we haven’t managed to bring our ducks into line yet, which is going to have a significant impact on Eskom’s ability to give us that power and electricity cost. We are going to have a coal cliff and that cliff is getting closer and closer.”