Gordhan refuses to give detailed answers to questions on future energy mix

26 October 2016 - 16:19 By Jan-Jan Joubert
Nuclear energy, such as that generated at Koeberg power station, represents about 4% of South Africa's energy generation.
Nuclear energy, such as that generated at Koeberg power station, represents about 4% of South Africa's energy generation.
Image: RUVAN BOSHOFF

Finance minister Pravin Gordhan‚ his deputy Mcebisi Jonas and director-general in the treasury Lestja Kganyago kicked for touch on energy matters on Wednesday‚ refusing to give detailed answers to questions on the country's future energy mix and how it will be financed.

No reference is made in favour or against nuclear in the national treasury's medium term budget policy statement documents‚ and Gordhan‚ Jonas and Kganyago as the triumvirate at the head of the country's fiscal governance dodged media questions on the matter.

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The three men also refused to discuss how Eskom‚ which already carries major contingent liability risks‚ will be able to finance nuclear new build now that it has accepted the poisoned nuclear chalice from the Department of Energy.

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On future energy supply‚ all Gordhan was prepared to say was that energy supply must stay ahead of the economic growth curve rather than follow it‚ and that he regarded the country's energy generation ability as more important than discussions on the composure of the energy mix - thereby showing clear preference to coal‚ gas and renewables.

For his part‚ Jonas said the exact management of energy expenditure and energy mix would only be decided after discussions with Energy Minister Tina Joemat-Pettersson and Public Enterprises Minister Lynne Brown.

"Nuclear new build will only continue if it does not undermine the fiscal integrity of the country. The pace and scale will be important‚" said Jonas.

Further lack of appetite for nuclear new build was exhibited by Kganyago‚ who kept his focus firmly on collaboration with independent power producers‚ and kept the options on the future energy mix open rather than commit to anything specific.

In the medium term budget policy statement documents‚ scant reference was made to pressing energy issues.

The documents do state that lack of adequate electricity supply has imposed severe costs on the economy‚ adding that Government has worked hard to stabilise Eskom and increase the participation of independent power producers beyond the sphere of renewables‚ to include coal and gas.

Treasury even goes so far as to warn against the "dangers of over-investment" in energy supply‚ noting that idle electricity capacity will require higher electricity prices.

Treasury also shows a strong appetite for renewables‚ noting their falling costs but omitting any reference to their lack of dependability.

It compliments Eskom for its renewed focus on maintenance work‚ and for its success at the process of getting the new power stations at Medupe‚ Kusile and Ingula operative‚ and claims that wind and solar photovoltaic generation is now cost competitive with gas and coal.

-TMG Digital/Parliamentary Bureau

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