Achieving the New Dawn. May 2018 Nuclear Power Africa: Africa Utility Week

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Phillip Allison
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1 Achieving the New Dawn Nuclear generation offers South Africa a low cost clean reliable energy solution allowing the country to achieve long term high sustainable economic growth May 2018 Nuclear Power Africa: Africa Utility Week Rob Jeffrey

2 Program Realising the New Dawn Analysis of the economic needs of the country Priority to economic growth Reindustrialise and revitalise mining Assess the countries assets Rich in commodities and human resources The most efficient forms of Natural assets The efficient provision of electricity to the economy The role of Eskom The role of IPPs Some inconvenient truths about the IRP and energy sources Some truths about Nuclear Conclusion

3 AFRICA AND SOUTH AFRICA S ECONOMIC AND DEVELOPMENTAL REQUIREMENTS

4 Poverty is the key issues facing emerging economies Poverty is the single highest social cost to society There are only three major policy objectives. Poverty alleviation, Reducing inequality and Reducing unemployment Economic growth is of paramount importance in their goodsproducing sectors. This requires electricity growth Emerging economies require electricity energy sources that offer security of supply at the lowest possible cost.

5 Stage of industrialization and per Capita Income & Consumption

6 Changing structure of SA economy (%GDP)

7 Lack of Confidence and Lack of Global Competitiveness Lack of confidence caused by political and economic policy uncertainty. State capture and corruption Potential implementation of the mining charter Threat of interference to the independence of the SA Reserve Bank Attacks on white capitalism Well-meaning but damaging regulatory laws hampering market efficiency AT Kearney Foreign Direct Investment (FDI) Confidence index S A occupied 11th position in 2012, it dropped to the 25th position in Fragile States Index. Ten years ago, SA was ranked in the stable category. SA now falls in the elevated warning category S&P, Moody s and Fitch have all downgraded South Africa and have it on a negative watch

8 Summary Economic Development Problems Slow economic growth Lack of growth in the goods producing industries Rising unemployment Structural balance of payment difficulties Increasing electricity price Economic and energy policy uncertainty Lack of competitiveness Educational and vocational mismatch Increasing social costs Lack of domestic and foreign investment to drive growth

9 The catastrophic economic cost on the economy South Africa s coal reserves are estimated at around 53 billion tons Coal mining accounted for 26.7% of the total value of mining production in 2015 making it the most valuable in terms of sales of the 14 main mining commodities tracked by Stats SA. Mining, manufacturing and industry need security of supply of electricity at competitive prices. The only two electricity generation sources of energy that can achieve these objectives in this country are clean or HELE coal and nuclear. The discounted value of coal reserves is more than One Trillion Rand. The value of Uranium reserves is probably also 0ne Trillion Rand. The drive for wind would deprive South African citizens of these benefits

10 EFFICIENT AND INEFFICIENT NATURAL ENERGY STORAGE SYSTEMS AVAILABLE TO SOUTH AFRICA

11 Energy returned from energy invested D. Weißbach et al (2013)

generation system Renewables are uneconomic & lead to economic stagnation Increased grid difficulties and grid costs Renewables are

12 Fundamental Weaknesses Of Renewables For Base Load Electricity Wind & solar power require full equivalent back up Low Load Factors average between solar 26% and wind 35% Unreliable intermittent and unpredictable Storage extremely expensive One of the most inefficient electricity generation system Renewables are uneconomic & lead to economic stagnation Increased grid difficulties and grid costs Renewables are environmentally disastrous Other technologies effectively subsidise renewables Renewables raise electricity prices are a tax on the poor & increase energy poverty

13 WORLD EXPERIENCE OF RENEWABLES

Renewables security of supply and cost There is increasing evidence that renewables (wind and Solar) are not suitable for power in industrialised or industrialising countries Energiewende in Germany

14 Renewables security of supply and cost There is increasing evidence that renewables (wind and Solar) are not suitable for power in industrialised or industrialising countries Energiewende in Germany have driven up electricity prices to uneconomic levels. Prices paid by industry in Germany were 52% higher than France (nuclear) and 86% higher than Poland (coal). Ireland, prices were 34% higher than France and 64% higher than Poland Fritz Vahrenholt in his study entitled Germany s Energiewende: A Disaster in the Making sums up: It will take a long time to repair the severe damage caused by misled energy policy German government have capped wind & in the process of withdrawing subsidies. South Australia s Lessons for the World: Wind Power the Fastest Route to Social & Economic Disaster. Intermittent & unreliable renewable energy in South Australia is leading to the deindustrialisation and for its citizens a substantial reduction living standards. King Island study in Australia, attempt to get 100% renewable supply shows that electricity prices increase R2.67/kwh and requires 100% diesel and gas back up.

15 Energy poverty a new issue in industrialised countries 54 million people in Europe are affected by rising energy poverty, around 1.5 million people could be dying prematurely UK household electricity prices have increased of over 80% since The number of households affected by energy poverty in the UK, increased from 2 million to 5 million. Green-energy policies in California have resulted in as many as 15 percent of households falling into energy poverty. In the EU coal-fired power plants generate electricity at half the price of wind turbines and a quarter of the price of solar PVs Comparative advantage of Fossil fuels in terms of non-intermittent energy supply not requiring back-up generation capacity.

16 Electricity generation in developing economies Poland Russia India china and the Asea Clean coal has been determined as the cheapest and most reliable sources of electricity to achieve their economic growth objectives. Replacement of aging inefficient power stations is a major objective. ASEAN countries: Coal-based electricity capacity is projected to increase from about 47 GW in 2013 to 261 GW in 2035, average growth rate 8.1% Vietnam: GDP growth is expected to average 6.0 % per annum. Coal generation will increase from 36% in 2015 to 56% by 2030 increasing at 7.2% per annum Plans for utilising cleaner coal were effectively approved by Pres O Bama as essential to raise economic growth rates and reduce poverty in emerging nations

SOUTH AFRICA S REAL ELECTRICITY GENERATING CHOICES. November 2017 SAEEC Conference. Rob Jeffrey Economic Risk Consultant

SOUTH AFRICA S REAL ELECTRICITY GENERATING CHOICES November 2017 SAEEC Conference Rob Jeffrey Discussion SA s economic growth and electricity generating requirements Alternative electricity generating