MICHAEL AVERY: Join the dots in the outrage over Komati
The electricity minister’s attack on Komati signals a new phase in the war for our energy future. And so far, nobody has connected the dots.
His comments, disingenuous as they are, signal the opening public salvo in what promises to be a fierce battle over our plans for the just energy transition, with the future of Camden, Grootvlei and Hendrina — the three power stations that will be gradually shut down over the four years to 2028 — now in play. Like Komati, the life of these power stations cannot be extended, they cannot be made environmentally compliant, and their operating costs are ballooning as maintenance and coal become ever more expensive. But there are political mouths to feed in the coal value chain, though more of that later.
As it transpires, Eskom rather presciently commissioned Urban-Econ Development Economists to conduct a thorough 272-page socioeconomic impact study into the Komati closure. The study revealed the obvious major negative impacts without mitigation but more importantly spent considerable time and resources focusing on what could be achieved with targeted planned transition interventions.
Shutdown without mitigation would be a disaster. Nearly 800 jobs previously supported by the operations of Komati at risk. And roughly R1.71bn (in 2020 prices) in national GDP lost, with the economies of Steve Tshwete Local Municipality and Mpumalanga declining by 0.7% and 0.1%, respectively, relative to the 2020 baseline. And a 0.3% decline in provincial employment relative to 2020.
Importantly, these figures also provided a benchmark for the development of mitigation measures included in the implementation plan for Komati and detail the level of due diligence and care with which the programme was approached. Far from being led by the nose of those terrible Western funders (Komati had zilch to do with the Just Energy Transition Investment Plan by the way but don’t let the facts spoil the narrative) here is a chance to envision a brave new world.
If the Komati repurposing is successful, the mitigation strategy outlined in the study would see more than R7bn invested in the local economy to support its transition. Once operational, these projects could contribute about R870m to GDP annually. Also 8,700 temporary jobs during construction, while 2,150 sustainable jobs could be created once all the projects are operational.
Komati’s last operating unit was a measly 120MW, yet it bled money like a sieve. I’m told the cost of generating power at Komati was far and away the most expensive in the coal fleet in terms of rand/MWh and was fast approaching that of generating from diesel.
The pressure vessels had reached the end of their lives. Running them had become a suicide mission. It was simply not possible to operate the plant legally and in compliance without embarking on a very costly overhaul. Former Eskom CEO André de Ruyter refused (as did the acting head of generation, Thomas Conradie) to operate the plant in noncompliance, and it was therefore shut down. But still Eskom pushed Komati until the end of October 2022, taking it right to the edge, dancing with disaster.
