WIKUS KRUGER AND LENA KITZING: Stop debating and start acting — renewables are the way out of the energy crisis

Rapidly installing new power generation capacity is our only hope for beating load-shedding. Yet instead of action on this front we seem to be trapped in a never-ending debate about the future energy mix.

We are facing a worrying decline in the performance of Eskom’s power plants, and everything should be done to address this. But it would be false hope to think that continuing along those lines will bring us out of the crisis. The fundamentals underpinning this deterioration are not going to change.

Most of Eskom’s power plants are too old, have been run too hard, and have not been properly maintained for too long to reverse the trend. At best, we can hope for a slowdown in the decline of performance. A return to performance levels of the early 2000s is simply not going to happen.

So what should we be building? We have numerous planning models that answer this question in a clear, unbiased way. Analyses by the Council for Scientific and Industrial Research (CSIR), the University of Cape Town’s Energy System Research, Meridian Economics and the Presidential Climate Commission, show that an energy secure, least-cost power system of the future will be dominated by solar and wind energy — complemented by flexible resources such as gas and/or storage.

The government’s Integrated Resource Plan confirms this. Eskom’s own analysis shows that we need 30GW of new renewable energy capacity and 6GW of flexible supply in the form of gas or battery storage by 2030 to keep the lights on.

And yet we hear, repeatedly, that coal, gas and nuclear are the only reliable, cheap sources of power. Where is this coming from? Partly it seems to be a reaction to Europe’s reawakened appetite for coal in the wake of Russia’s invasion of Ukraine, after which the EU was in effect cut off from Russian natural gas supplies.

In the debate in SA Germany is often held up as a cautionary tale — a place where energy decisions are being driven by reckless populism and green environmentalism, allegedly resulting in expensive power supply and declining economic growth. The reality is more complex — and in fact strongly supports the case for a renewables-based system.

Germany had relied heavily on Russian natural gas for decades, not only for electricity generation but also industrial processing and residential heating. This was in part driven by the belief that an increasingly economically connected Russia would be less likely to destabilise the region, as well as Germany’s decision to shut down its nuclear power fleet in the wake of first Chernobyl and then the Fukushima disasters.

The reliance on Russian gas has been a painful and expensive lesson for Germany and Europe: energy prices have gone up, economic growth has slowed down, and energy security is an increasing concern. But — and this is important — this is not due to Germany’s reliance on renewable energy.

In fact, analysis by the EU’s Scientific Advisory Board on Climate Change shows that renewables mitigated the worst fallout from the energy crisis. An increase in renewables production during the crisis has evidently dampened price spikes and helped keep the lights on.

Had Germany and its neighbours installed more renewables it would have been in an even better position to weather the energy crisis. Indeed, in the wake of the crisis and in its ambition to become independent from Russian gas, in terms of its REPowerEU plan the EU has doubled down on its green investment strategy and increased renewables targets, put out strategies to accelerate permitting processes and updated financing plans to get as much renewables into the grid as possible.

There are striking parallels with SA. Analysis by Meridian Economics showed that had the country not interrupted its public procurement programme for renewable energy independent power producers in 2015, we would have experienced 96% less load-shedding in 2021. And the CSIR reports that the additional energy injected by renewables have allowed Eskom to avoid the worst stages of load-shedding.

Domestic electricity consumers increasingly recognise the value of renewables. In the past year South Africans installed 4,7GW of solar on their roofs, at their factories, on their farms and at their mines. And a recent Eskom survey shows that a pipeline of 60GW — 90GW of utility-scale renewable energy plants are being developed across the country.

This is being driven by a combination of falling production costs, rising carbon taxes and energy security concerns. The fact that renewables are now cheaper on a per unit basis than electricity supplied by Eskom for many businesses, marks a clear divergence between Eskom’s future price path and the declining cost of power from renewables.

At the same time, SA’s biggest trading partners are introducing cross-border carbon tax mechanisms, in effect penalising imports that contain high shares of embedded carbon. SA companies are understandably worried about this since we have one of the dirtiest grids in the world and are rapidly trying to decarbonise their power supply to remain competitive.

Renewables, combined with storage, offer a quickly deployed, cost-effective means of dealing with the worst effects of load-shedding. SA’s future lies in an increasingly decentralised energy system dominated by cheap renewables. And it is a future where SA can lead: the country has some of the best renewable energy resources in the world, alongside many of the critical mineral resources needed to enable the transition.

We have a unique, once-in-a-lifetime opportunity to use this energy crisis to shift SA towards a more prosperous future for all. Why are we still talking about this?

• Dr Kruger is director of the Power Futures Lab at the University of Cape Town Graduate School of Business. Dr Kitzing is an associate professor in energy economics and policy, and head of section for society, markets & policy, in the DTU wind energy systems division, as well a member of the European Scientific Advisory Board on Climate Change.