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The problem with cheap power is the cost

08 Mar 2023 | OP ED Watch

Frustrating as the fog of error can be, swirling thickly across the debatescape in apparently endless quantities, the hard outlines of truth do eventually become visible especially at close range. Including on the climate question, where decades of fuzzy assurances that a painless energy revolution would take place by the mid-2020s, yet here we are bumping into the mid-2020s and it is our halcyon utopian youth that is now mysteriously distant. Thus the New York Times “Climate Forward” just clonked into “The coal challenge”, namely that “Getting rid of coal is often seen as the easier part of the global transition to renewable energy. Developed countries have made great strides in abandoning coal, and investors have long avoided it. But for some developing countries, it hasn’t been so easy.” For instance in South Africa, despite endless assurances that alternative energy is now cheaper than coal they keep burning the latter because it’s all they can afford and they’re scrambling to keep the lights on and it um well yes that is see uh…

We do not wish to exaggerate the clarity of their vision for moving onward through the fog. On the contrary, in classic Thomas Sowell “unconstrained” style they tell us “As in richer countries, that [energy transition] will involve changing the political structures built on fossil fuels.” The political structures. It’s all about will, and power.

Author Manuela Andreoni talks to “my colleague Lynsey Chutel, who’s based in South Africa and has been following the country’s shift to renewables” about how it works. And we inject an immediate note of skepticism in that, since the article says “The International Energy Agency estimates that coal accounts for about 70 percent of South Africa’s energy mix”, there’s not much “shift to renewables” to follow, understand or talk about. What there is, really, is a lack of shift. And of power:

“The country has been experiencing rolling blackouts since the late 2000s and power failures have reached crisis proportions, with daily outages, over the past year. That’s partly because old, coal-fired power plants are faltering. Blackouts lasting up to ten hours at a stretch have become common. So, the country’s main focus right now is just keeping those coal plants running.”

Chutel, who we should add is not merely based in South-Africa but actually South African, explains that:

“It’s the culmination of years of mismanagement and corruption. South Africa depends on a national electricity supplier, Eskom, generating power from more than a dozen dilapidated coal power stations. The company is broke, so it doesn’t have the money to rebuild. Now, week after week, there are reports of power stations going offline for emergency repairs. Corruption and organized crime are big problems, too.”

Without getting too sarcastic about the Third World, we are inclined to believe this explanation. (Though if you do want to get sarcastic, Chutel adds that the former head of Eskom, André de Ruyter, “championed a shift to renewables… But he has recently left Eskom amid a controversy over his allegations of corruption within the company. The South African police are investigating an apparent attempt to poison de Ruyter with cyanide-laced coffee in December.”) But we are also inclined to brush it aside, because it explains why energy is a mess in South Africa but not why, in this mess and in this messy way, they’re using coal. Why couldn’t they have intermittent, corrupt, cyanide-laced solar?

The answer is money. Or rather lack of it. Apparently South Africa, which has a major economy by African standards and is the 14th-largest emitter of greenhouse gases in the world, was promised $8.5 billion by the new eco-imperialists back in 2021 to move away from coal. But the money has not arrived. And without it, well, those fancy renewables are just out of reach.

Thus the Washington Post laments that “In India, ‘phase down’ of coal actually means rapid expansion of mining”. India’s problems are different from South Africa’s, and in many ways less daunting. But when it comes to energy you can afford, the math is the same. Thus in its “The Climate Issue” newsletter The Economist’s Matthieu Favas and his headline writer, after blathering that “The energy transition may be accelerated by five to ten years” thanks to the Ukraine war blurt out “but there is a wrinkle… the firms tasked with ramping up the world’s renewable-power capacity do not make enough money.” Strange definition of profitable you have there.

Money shmoney says Chutel:

“South African officials have said the $8.5 billion would be just a start of the more $80 billion the country would need to implement its plan. Officials have positioned funding as the main stumbling block to the energy transition, but it’s more complex than that. Funding is needed, but so is political will.”

Hang on. Why would lack of funding be a stumbling block to pursuing a great money-maker? Could it be that the scheme is in fact a losing proposition? Admittedly standards of governance are lamentably low in South Africa. But even so politicians are up against it over the inability to deliver electricity, so they’d scramble to provide it any way they could. They have the political will, at least in that sense. The problem is the cost.

As Chutel concedes:

“It doesn’t help that the war in Ukraine has forced some industrialized countries to compromise on their green ambitions. South African politicians and commentators, even those who were not vociferous defenders of coal, have pointed to this and questioned why the country should rush its transition.”

Forced them how exactly? Do they have South Africa’s problems with corruption and coffee? No. What they have is trouble affording exotic new energy sources, so they go with what works at an acceptable cost. Unless they’re so rich they can dump endless subsidies into wind and solar and claim they’re not. But when you hear of some glittering new alternative project in, say, the United States, you can bet the taxpayers’ bottom dollar that large quantities of public money are involved.

2 comments on “The problem with cheap power is the cost”

  1. It must be clear to anyone interested in this so called "transition", that he goal of the Environmentalists is not "Use of renewable Energy" or "Clean energy" but force the world to use "LESS" energy. Since cheap reliable energy underpins the world's economy, their goal is to make energy expensive and more difficult to obtain. It is a Marxist goal, to create so called "equality" Change consumption patterns of the rich middle class, make the world population to work with the "Natural" earth's cycles. This movement sprang out of the Peace movement of the 70's that grew disillusioned with soviet and Chinese style Marxism, with all the bloody revolutions and oppression. The conclusion they came to that the best way forward in the constant evolution of Marxism, is Environmentalism, and global warming. That can be sold to the masses easier then a revolution. through this we get the this war on energy.

  2. Good luck convincing the relatively poor Africans that they need to cut back on fossil and carbon-fuels. They will simply dig up the coal even should the commercial mining operations cease. Trees are also fair game if one needs to cook food or keep warm.
    And, should the $8.5 billion ever materialize, it will simply disappear into the coffers of the ANC Cadres.

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