5 days ago
R257bn for Eskom to meet minimum requirements, aims for 40% emissions reduction by 2030
The power utility said it planned to achieve a 40% reduction in emissions by 2030 at the fleet level. Its preferred approach would cost R77bn in capital expenditure and R2.1bn in annual operational expenditure.
Eskom CEO Dan Marokane says it will cost the South African taxpayer up to R257-billion for the utility to do the necessary upgrades for it to meet government-mandated minimum emission standards. Compliance, in this way, could translate into the equivalent of up to a 10% tariff increase.
He and members of Eskom's executive were briefing Parliament's Select Committee on Agriculture, Land Reform and Mineral Resources on Tuesday, 10 June, in Cape Town.
The briefing outlined the financial costs, the direct threat to the nation's power supply and the significant potential disruption to electricity supply that would come as a consequence of the legally mandated environmental regulations.
Eskom's team put a figure of about R257-billion in capital expenditure (Capex) on what it would take to achieve full compliance with minimum emission standards across six of its major power stations, namely Medupi, Majuba, Matimba, Kendal, Lethabo and Tutuka.
This would also incur R6.3-billion in annual operating costs (Opex). To date, Eskom has spent more than R3-billion on emission abatement projects, with an additional R15.6-billion allocated over the next five years.
In March, Daily Maverick reported that Minister of Forestry, Fisheries and the Environment Dion George granted Eskom limited exemptions from minimum emission standards for eight of Eskom's coal-fired power stations.
Two power stations, Duvha and Matla, were granted nine-year minimum emission standards exemptions until their planned decommissioning dates in 2034. Six other power stations were granted five-year minimum emission standards exemptions until 1 April 2030. These are Kendal, Lethabo, Majuba, Matimba, Medupi and Tutuka.
Marokane said the implications of compliance with the emissions standards extended beyond the financial. Up to 22 gigawatts (GW) of the coal fleet's generating capacity is 'at risk' of being shut down if it cannot comply with the stringent post-2030 standards for sulphur dioxide (SO2) emissions, which, while beneficial from an environmental perspective, could imperil the progress Eskom has made in taming load shedding should that capacity not be replaced accordingly.
This risk materialises after that 1 April 2030 deadline, when the exemptions granted for several stations expire. Given that retrofitting the necessary Flue Gas Desulphurisation technology takes 7-10 years, decisions are needed now to avert this cliff-edge scenario.
Eskom, Marokane told members of the committee, was of the view that its preferred approach was not full compliance but instead, it would focus on SO2 reduction at its newest plants, Kusile and Medupi, and complete particulate matter and nitrogen oxide upgrades at six stations.
This path would cost R77-billion in Capex and R2.1-billion in annual Opex.
However, as was noted by members of the committee, even this 'cheaper' option was severely underfunded, as mentioned above, with R15.6-billion allocated over the next five years.
Moreover, Marokane explained, Eskom intends to expand its 'clean energy capacity' and 'optimise the existing coal fleet' to meet a 40% reduction in emissions by 2030 at the 'fleet level'. This means that the coal station fleet in aggregate would see a 40% reduction in emissions, but this would be unevenly distributed from station to station because some of the newer stations may see their production ramp up to compensate for the shutdown of older stations.
Health costs
While Eskom's briefing touched on the socioeconomic consequences of plant shutdowns, such as the impact on 14,000 direct jobs, it did not provide an assessment of the direct health costs and mortality associated with its emissions. This gap was highlighted by a recent report titled Unmasking the Toll of Fine Particle Pollution in South Africa.
That report by Greenpeace Africa and the Centre for Research on Energy and Clean Air (CREA) found that in 2023 alone, 42,000 South Africans died from exposure to fine particle pollution (PM2.5), including more than 1,300 children under five.
It combined PM2.5 concentrations (sourced from satellite data, ground monitoring and atmospheric models) with population and health data from the Global Burden of Disease database to calculate health impacts.
PM2.5 refers to airborne particles smaller than 2.5 micrometres, mainly formed by burning coal and fuel.
Daily Maverick wrote that the report estimates that PM2.5 pollution cost the country more than R960-billion in 2023 – equivalent to 14% of GDP – through premature deaths, illness, lost productivity and overburdened health systems.
These particles, as CREA analyst Lauri Myllyvirta previously explained to Daily Maverick, are 'small enough to pass from lungs to the bloodstream and wreak havoc on all our internal organs'.
Communities in the Highveld region and Gauteng and Mpumalanga, which are home to the country's largest coal-fired power plants and industrial zones, are hardest hit.
Briefing the committee on Tuesday, Deidre Herbst, senior manager for environmental management in Eskom's Generation Division, confirmed particulate matter's deleterious impact.
While sulphur dioxide was the 'biggest challenge', particulate matter caused the most harmful health impacts, she explained. DM
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