Renewables have disappointed us – Molefe

Sapvia contends renewable facilities resulted in a net-saving to the economy of R4.8bn.

Renewable energy has failed to provide energy when Eskom most needed it, Eskom CEO Brian Molefe said on Thursday.

Speaking at its quarterly State of the System briefing in Cape Town, Molefe said renewable energy is like a very old cellphone. The technology has not yet developed enough for it to perform efficiently and make a meaningful contribution to electricity supply in the country.

He said renewable energy is in practice available from 9:00 to 15:00, which is not when Eskom needs it. Solar power is only available when the sun shines, which excludes the evening peak in winter. Wind power is at its best in the early hours of the morning and late at night, when Eskom has surplus power.

“To rely on renewables on a day like today, is very clumsy,” he said.

He said renewable energy was expected to deliver the 3 000 MW of generation capacity Eskom needed to avert load shedding. It delivered it during the day, but not when Eskom needed it at the evening peak around 18:00.

He said renewable energy will improve in the next ten years with the development of storage, which will make it available during peak consumption periods. He compared it with old cellphones that have been optimised as technology has advanced.

Molefe said Eskom is forced to buy electricity from renewable projects at a higher cost than its own generation when it has excess capacity of its own. To add insult to injury, it was forced to sign 20-year power purchase agreements, at the end of which the assets will be transferred to Eskom.

At that stage the technology will be out of date and the assets will be useless. “We will be like somebody who has an old phone, while everybody else has an iPhone,” he said.

“We have to survive through it.” Eskom is committed to the success of the renewable programme and will try to ensure that the right technology is being deployed. “At the moment there is a mismatch between what it was supposed to achieve and the reality,” he said.

Molefe said Eskom will nevertheless remain interested in renewables and has allocated R1 billion to research on, among other things, renewable energy.

Eskom has already connected 46 out of more than 100 renewable projects to the grid . It had to strengthen the grid for this purpose and is ready to accommodate all projects up to bid window 4.5 of the Department of Energy’s renewable procurement programme.

According to Eskom’s Integrated Report the renewable projects performed at an average load factor of 31% in 2014/15.


Solar association reacts

In response to Molefe’s comments, the South African Photovoltaic Industry Association (Sapvia) said: “if the statements as reported are an accurate representation of the views of the CEO and his advisors, Sapvia finds those views ill-informed at best, and misleading at worst.”

The association quotes recent Council for Scientific and Industrial Research studies which found that “operational wind and PV generation facilities that formed part of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) resulted in diesel cost-savings of R3.7 billion and R3.5 billion, during the whole of 2014, and the half-year period between January and June 2015, respectively. Taking into account their contribution towards reducing load-shedding during these periods, the facilities resulted in a net-saving to the economy of R4.8 billion.

Sapvia said this was accompanied by price reductions in wind and PV generation. It added that, as here are no ‘fuel’ purchases with these facilities, “they effectively represent a ‘hedge’ against future electricity price increases.”

As to renewables not supplying peak periods, Sapvia contends that PV contributes to energy supply during the morning peak period. “Furthermore, the focus on peaking supply ignores the requirement for an energy mix that consists of technologies that serve different purposes….

“Recent studies have shown that an optimal combination of PV and wind power plants, geographically-dispersed across South Africa, have the capability to increase the level of energy security. Additionally, the notion that peak electricity demand should be supplied at any cost is questionable, as there are more efficient approaches to supplying the thermal applications that typically result in the peak demand.”

The association said current low GDP growth meant suppressed electricity consumption and “may create a false sense of energy supply security”.

Sapvia has extended an invitation to Eskom’s CEO and his advisors “to meet and discuss any of their concerns regarding the value adding proposition of renewable energy and to assist in creating a mutually beneficial understanding of its role towards the welfare of the citizens of South Africa.”

See Sapvia’s full statement in response to Molefe’s renewables comments here.

Greenpeace slams comments

In a statement released on Friday, Greenpeace slammed Molefe’s comments on renewable energy.

“Greenpeace condemns the anti-renewable energy propaganda coming from Eskom in the strongest possible terms, at a time when renewable energy projects have added more than 1 800 MW of installed capacity to the grid in just two and a half years (which equates to 4% of the total installed capacity). In fact, renewable energy is the only technology currently delivering new electricity capacity on time and on budget to South Africa’s constrained grid.”

If Mr Molefe would like to discuss the use of outdated technology then Eskom need look no further than Eskom’s ailing, and hugely polluting, coal-fired fleet which the utility is looking to refurbish rather than decommission. This at a time when more than half the assets in the global coal industry are now held by companies that are either in bankruptcy proceedings or don’t earn enough money to pay their interest bills, according to data compiled by Bloomberg[1].

“The current position Eskom finds itself in whereby they are forced to buy electricity from Independent Power Producers talks directly the utility’s lack of ambition and marginal approach to investing in renewable energy project developments. If Eskom lacks the vision to build renewable energy projects themselves then other stakeholders most certainly will, as renewable energy is the power source of the future. In fact, a recent Ernst and Young study revealed that South Africa is the 11th most attractive country in the world for renewable energy investments[2].

“Ultimately, it is time to kick start a thriving renewable energy market that will help remove the barriers to small-scale renewable energy investments and allow all South Africans to benefit from affordable renewable energy….Eskom has a choice to either join the energy of the future or be left behind struggling with an outdated, polluting and unreliable energy model that is taking South Africa nowhere slowly.”



Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.


Brian Molefe – at the end of 20 years the technology might be old but it will be paid off and there will be no fuel cost.

Shooting down the competition. Renewable energy is now cheaper, quicker to get on line and more dependable than Eskom. The green energy providers clearly show the efficiency of the free market and private enterprise and lays bare the inefficiency, corruption and poor management skills of government enterprises. Eskom for South Africa is like driving a Maserati with the handbrake on

“Renewables have disappointed us”

Speaking of disappointment, now let’s see —

The licencing of the Darling windfarm dragged on and on and…..
When industry wanted to supply power to the grid there was hurdle after hurdle after…
The Bokpoort solar plant is on it’s way to prove that solar can be used around the clock via heat storage……
With the enormous amount of liters of gas available, use the large MAN diesel engines (used on ships) to generate power. Said engines are already operating at more than 55% efficiency, no other engine / turbine or steam can match that and if you have smaller stations distributed around the country there’s a smaller effect on nodes than when for example Koeberg has a bolt in the gears and the node at De Aar trips with the sudden overload coming from the North to the Cape…

But of course it’s the wind that gets lost on it’s way to us or a cloud is in front of the sun….

It reminds me – there’s this “uitklaar parade”, the battalion of soldiers march past the podium and Pietie’s Mother is extremely proud of her son. “Look, just Pietie is in step, everybody else is out of step”

Dammit Eskom, you’ve had long enough, wake up and when you do something pretend you are really serious!!!

Pump storage, ocean tidal, ocean thermal, and kinetic energy systems. Molten Salt storage for Solar, Hydrogen Power cells, all are solutions to the problem.

Brain Molefe is like a broken clock – it is correct twice a day. This atricle may well be his moment of truth.

The problem is Eskom is not run as a business but as an ANC state fiefdom. When it comes to making business decisions, the ANC is all but clueless, with managerial skills that would make an intoxicated wombat look positively capable. This malaise has, of course, infected all Eskom workers within a radius of 2000 miles.

The ANC decides that is wants (not needs) renewable energy so it asks the private sector to bid to supply renewable energy. The private sector then bids and the ANC selects various tender winners who then supply electricity at a price higher than Eskom can produce it and at a time when South Africa doesn’t need it . Of course, Eskom is obligated to purchase this (ANC again)- and to add insult to injury, the scrap metal after 20 years (ANC). The cost structure of Eskom is thus higher than it should be and this inefficiency is simply passed on to the consumer in the guise of higher prices. South Africa loses: manufacturers have higher costs and consumers less disposable income. All hail renewables. Hip Hip Hurrah! We are all poorer.

What should be done is simple: Eskom should be privatised into three divisions: power generation, power distribution and sales (retail). The retail function should be removed from corrupt bankrupt municipalities. Electricity supply should be deregulated. If the power distribution company wishes to purchase renewable energy in a free market or make contracts with renewable suppliers, then they are most welcome to do so. This will eliminate unworthy uncompetitive power sources be they coal, gas, wind, nuclear, solar or gym members on a treadmill.

We need some honest investigative journalism that will investigate the cost structure and profitability of all electricity sources in South Africa. let’s try some of the relevant questions:

Q: what does Eskom pay renewable suppliers to input power into the national grid?

Q: how does this compare with Eskom’s cost of producing power?

Q: how does this compare with the retail price of power?

Q: what is the true cost of renewable storage taking into account the capital and the energy loss during the conversion & back again (second law of thermodynamics)

MW does not seem up to the task. Sad.

Are renewable sources of electricity really cheaper and a viable option ? Definitely not if the cost of the requisite backup is factored in.

Q: why are there so many derelict wind farms that have been abandoned along with their subsidies?

Q; why is electricity in Germany (renewable leaders of the world) twice the price of France (mainly nuclear)?

If the regime decides to supply power to those who will not pay then they will have to subsidise the consumer with tax money not just pass the vote buying policy and its attendant problems onto Eskom.

Ignoring all the political standpoints, idealistic and other emotive aspects, I know where I will not invest any of my money: certainly not in any renewable energy company. Worldwide, they have a propensity to go bust.
Why? The same reason why any company goes bust: cost-effectiveness, ROI. They are not viable without taxpayer subsidy.
The sentiment or belief cannot change the economic fundamentals. One supports green technology for idealism, not for financial viability.

End of comments.




Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us:

Search Articles:
Click a Company: