SEÁN MULLER: The expensive risks of buying extra energy
If Eskom cannot sell the additional energy, government will have to step in to provide financial support, with possibly disastrous results, writes Seán Muller
THE debate on the nuclear energy procurement programme needs to focus more on its public finance implications. Most recent commentary has focused on the merits of nuclear energy versus renewables, but it is hard to clinch the argument either way given the many variables that could be taken into account. However, the fundamental, national issue is whether it is necessary to procure this additional capacity — in whatever form — and what the resultant risks are to public finances.The first component of the public finance issue is energy demand, which depends primarily on the state of the economy and the electricity price. The question that arises for nuclear is whether the additional 9.6GWh of capacity is actually needed over-and-above existing capacity and procurement projects already in the pipeline. There is good reason to believe that the answer is a resounding "no". The Integrated Resource Plan (IRP) 2010 on which the initial 9.6GWh nuclear plan was based, is itself premised on pr...
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