Billionaire says South African grid too weak for green energy

South Africa needs to upgrade its coal-fired power plants rather than focus on renewable energy, according to a sanctioned Russian billionaire who made his fortune in part from generating electricity using the fuel.

“The priority for the country should be first to fix and modernise the fleet of power plants because that’s fast, cheap and allows a reasonable price of electricity,” Andrey Melnichenko said in an interview last week at a lodge in Irene, north of Johannesburg.

South Africa’s grid is concentrated in the north-east of the country, where its coal-fired electricity plants, which regularly break down, are located. Meanwhile, there’s little capacity in the provinces where solar and wind resources are readily available. The country uses the dirtiest fuel to generate 80% of its electricity.

Melnichenko, founder of Suek JSC, said modernising or repairing Eskom's 14 coal-fired plants would be cheaper and more effective, adding to a raging debate on South Africa's power crisis. While President Cyril Ramaphosa has backed the drive for more solar and wind power, others in government, including energy minister Gwede Mantashe, have decried the push to transition to green energy.

“There’s no electricity for six hours a day,” said Melnichenko, who is worth about $13bn (R220.44bn). “In which century are you living?” he added in the interview, which was briefly interrupted by a power cut before the lodge’s generators started up.

Melnichenko is one of a number of affluent Russian business leaders who have been sanctioned by the EU and the US in the wake of Russia’s invasion of Ukraine. While on his visit to South Africa, the tycoon — who also founded fertiliser company EuroChem Group AG — met government officials to discuss impediments to Russian exports of crop nutrients.

Russia’s fleet of coal-fired plants are similar in age to those in South Africa, yet maintain a more consistent flow of power, according to Melnichenko. South Africa and Russia’s coal-fired plants are, on average, decades old.

South Africa has had more than 200 days of power cuts this year, hindering economic growth and stoking scathing criticism of the government.

Eskom has said it needs R72bn over the next five years to expand the grid. Additional funding will be required to connect 53GW of clean energy capacity by 2032 as coal plants shut down.

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