POWER October 2016 - 54

GENERATION TRANSITIONS
Suspended!
On August 10, South African media reported
that a Koeberg Nuclear Power Station
safety officer was suspended " as a precautionary
measure " after an unauthorized
drone (which did no damage) crashed at
the site on some unspecified date.
Suspensions appear to be Eskom's first
response to controversy, as the Koeberg
station manager and plant manager were
also suspended in August in an unrelated
matter involving " unauthorized distribution
of documentation containing facts
and assumptions about Koeberg's ProducR105
billion, and the plant is several years
behind schedule. The next unit, says Eskom,
will be in service in early 2018 and the final
unit commercialized in 2020.
The Medupi project has a $500 million
loan from the African Development Bank and
$3 billion from the World Bank, approved in
2010. The New York Times reported that the
Obama administration, which had pressured
the World Bank to eschew investments in
coal generation, abstained on the vote for the
loan. The U.S. warned that the bank should
not bring coal-generation loans forward in
the future " without a plan to ensure there is
no net increase in carbon emissions. "
Eskom is building another six-unit, 4,800MW
supercritical coal-fired plant, Kusile, in
the same coal region as Medupi, with the first
unit planned for 2018. Kusile has also seen
large cost increases and schedule delays (Figure
4). Its current cost estimate is R119 billion.
The original schedule saw Kusile in service by
2013. This plant also has a $500 million commitment
from the African Development Bank
and an $805 million loan from the ExportImport
Bank of the U.S. to " support Eskom's
purchase of engineering and construction
management services from Black & Veatch
International, " according to the bank.
Strong whiffs of corruption have accompanied
Kusile and Medupi. The U.S. Securities
and Exchange Commission (SEC) a year ago
forced Hitachi of Japan to pay a $19 million
penalty for essentially bribing the African National
Congress (ANC), South Africa's dominant
and ruling political party, in 2005 for
contracts for the two coal-fired projects. According
to the SEC, Hitachi sold a 25% stake
in its African business unit to an ANC front
group in return for favorable equipment supply
contracts for the two coal plants.
Eskom also has a four-unit, 1,332-MW
Ingula hydro pumped storage project under
construction that is, predictably, behind
54
tion Plan, and in particular, its steam generator
replacements, " as POWER reported.
Four senior executives had previously
been suspended in March to allow for an
independent investigation into " the poor
performance of generation plants, delays
in bringing the new generation plant on
stream, the high costs of primary energy and
cash-flow challenges, " according to a Business
Day story. The executives were cleared
of any wrongdoing in mid-July. There were
no news reports regarding the fate of the
Koeberg managers as of September 9.
schedule and over budget (Figure 5). The
South African investigative news project
Carte Blanche reported that the plant " is more
than R27 billion over budget and will be at
least four years late when it finally comes online,
in 2017. " In an August 24 press release,
the company said a second unit, Unit 2, had
gone into commercial operation and that the
first, Unit 4, was commissioned in June, " six
months ahead of schedule. " The other two
units are scheduled to go commercial in the
first half of 2017, the company says. CEO
Molefe has countered that the Carte Blanche
report is baseless.
Eskom has put another pumped hydro project
on hold since 2009. The 1,500-MW Tubatse
project on the Limpopo River won approval
from the Eskom board in 2008, with a 2015
target for operation. The economic slowdown
cooled Eskom management's desire to proceed
with the project. Additional large-scale, dispatchable
storage would, of course, support the
addition of variable renewable capacity.
As POWER reported in March, Eskom has
also applied to the country's nuclear regulator
for site licenses in both the Eastern Cape
and Western Cape provinces. That article
noted, " Although the plant type and technology
have not yet been selected, Eskom made
clear its intention to construct and operate
multiple nuclear reactors at each site. " Further
developments are years away, although
being a state-owned company should mean a
somewhat smooth regulatory path.
National Debate About Fuels of
the Future
Eskom's conventional road toward spreading
electricity access in the country-much of
which is not served by reliable electricity-and
the region, where even fewer have access to
power (see " THE BIG PICTURE: Still in the
Dark " in this issue's Global Monitor department),
has drawn criticism. Renewable energy
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4. Delayed. The six-unit, 4,800-MW supercritical
coal-fired Kusile plant was to be
providing power to capacity-strapped South
Africa by 2013. The latest revised plan has it
coming online in 2018. This is the most recent,
undated project photo on Eskom's website.
Courtesy: Eskom
advocates have challenged the utility's reliance
on coal and nuclear for the future. Supporters
of increased competition have argued for a restructured
South African electricity industry,
with independent power producers (IPPs) competing
for markets with Eskom.
South African electricity industry analyst
Johan van den Berg argues, " The debate
about Eskom and independent power ultimately
revolves around two main starting
points where the disputants are at odds. The
one paradigm is the centralization of political
and economic power as opposed to the democratization
thereof. The other is the opposition
between traditional thinking trusting in
rigid and manipulable power sources and the
modern move towards a flexible and diverse
energy system. " He opts for the competitive
model, which he notes " has been settled
for more than a decade in more progressive
countries like Germany. "
An analysis from South Africa's Council for
Scientific & Industrial Research (CSIR) suggests
that the country would be better off focusing
on renewables than on coal and nuclear
for future generation. The Financial Mail, the
country's equivalent of the Financial Times or
the Wall Street Journal, opined, " Senior CSIR
researcher Tobias Bischof-Niemz argued that
'at present, solar and wind power is, per unit,
cheaper than coal-generated power from newly
built coal plants.' Another benefit was that the
sector was funded not by taxpayers but by the
POWER | October 2016
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POWER October 2016

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