Why renewable energy is a huge mistake - Business Report

Dioné Harley

Worldwide, the call for a shift away from fossil fuels and towards renewable energy has been loud and relentless, but is there enough evidence to support a move of this kind, particularly for South Africa?

Finance Minister Tito Mboweni said in his recent Budget speech that Eskom was taking steps towards harnessing renewable energy, while a carbon tax would come into effect this year. As the most electricity-intensive sectors in the economy, the mining and manufacturing industries will be hit the hardest by a carbon tax at a time when investment has stalled.

As an emerging economy, South Africa’s central source of energy is coal. Consequently, a carbon tax will be especially detrimental to the mining sector through increased operational expenses, compromising its competitiveness in the market. This price is only worth paying if tangible progress in the domain of renewable energy can pick up the slack.

According to the most recent draft of the Integrated Resource Plan Update (August 2018), the government will focus on developing wind, natural gas, solar and hydropower plants. The plan does not include the development of new nuclear energy. 

Yet the evidence shows that renewable energy is both more costly and harmful to the environment than nuclear power. Michael Shellenberger, president of Environmental Progress – an independent research and policy organisation – has been at the forefront of energy initiatives in the USA, and has confronted the challenges of renewable energy head on.

Between 2009-2015, America invested $150 billion dollars in renewables and clean technology. It immediately became clear to Shellenberger and his team that the most cost-effective strategy was the creation of solar and wind farms, but these require extensive areas of land. Clearing this land inevitably harms the environment through the disruption of habitats and the displacement of animals, which caused conservationists to oppose these initiatives. Wind turbines have in fact become the most serious modern-day threat to birds of prey.

Additionally, the unreliable nature of solar and wind power meant that other sources of power would always have to be kept in readiness. While California explored the option of turning their dams into massive batteries by pumping water uphill and running it over turbines to generate elecrticity, this solution called for specific kinds of dams and reservoirs that are expensive to build. Water is also a scarce resource, especially in dry regions.

Sunny places like South Africa cause further problems. In the absence of large-scale ways to back up the solar energy produced when it is consistently sunny, California was forced to block the electricity coming from solar farms and even pay other states to absorb the excess to avoid damaging the grid.

While solar panels and wind turbines have allegedly become cheaper, their fundamental unreliability produces further costs that are generally not taken into account. In California, between 2011-2017, the cost of solar panels decreased by 75 percent, but electricity prices increased five times more than the rest of the US. As Germany introduced more renwables between 2006-2017, its electricity also increased by 50 percent while carbon emissions have remained the same since 2009.

France, on the other hand, produces one-tenth the carbon emissions per unit of electricity as Germany while paying just above half the amount, thanks to nuclear power.

Nuclear power is generally considered to be much more expensive than renewables and it has a bad reputation due to safety risks. However, nuclear power is only perceived to be more expensive because the costs are all up-front in the form of nuclear plants, whereas the hidden costs of solar and wind through transmission lines, new dams, and other forms of battery are often overlooked.

The safety concerns are also misplaced. Based on recent studies, it has been shown that nuclear power is the safest path to reliable electricity. Nuclear plants produce heat without fire, which means they don’t produce air polution. The radioactive particulate matter that is released from splitting uranium atoms is harmless, and the worst nuclear accident to date – Chernobyl – only contributed to the deaths of approximately 200 people over an 80-year lifespan. This is insignificant when compared to the seven million people who die prematurely per year as a result of air pollution.

Further benefits include the fact that nuclear plants don’t require as much land as renewables do, while nuclear power requires fewer materials and produces less waste. Keep in mind that solar panels will also need to be disposed of once they’re replaced and it isn’t clear how this will be done in an environmentally safe way.

South Africa does not have a developed economy, nor the luxury of following global trends simply because they are popular. Devoting the next decade to making progress with regard to renewable energy will only waste time and resources we don’t have.

South Africa may currently lack the financial means to expand on the development of nuclear energy plants, but it doesn’t make sense to invest current resources in renewable energy when all the evidence shows that this is not a feasible way forward in the long term.

The mining sector accounts for a third of all South Africa’s merchandise exports and the industry contributes significantly through the purchase of goods and services from other sectors. In 2016, mining contributed R219 billion to GDP while spending a whopping R245 billion on a wide range of goods and services: R89 billion on captital expenditure and R156 billon on current expenditure. To put this in perspective, consider that the government’s budget for expenditure on goods and services in 2015/2016 was R188 billion. The value of this sector must not be underestimated and the looming carbon tax will only threaten an already struggling industry.

So what is to be done?

As they say, necessity is the mother of invention – the industry will have no choice but to adapt. Since the government has committed itself to the misguided path of renewables rather than exploring strategies for building nuclear plants, the industry will have to innovate to survive the coming carbon tax.

Recommendations include cost-cutting strategies through the use of technology: drones for surveying; artificial intelligence for operations support; big data and advanced analytics for production optimisation and maintenance; as well as robotics in drilling, digging, and transporting. The 4th Industrial Revolution is upon us, and clearly there is no better time to embrace the benefits it has to offer.

Dioné Harley is a writer commissioned by the Institute of Race Relations (IRR), a liberal think tank that promotes economic and political freedom. Go to https://irr.org.za/