In difficult times, it helps remembering things could almost certainly have been a lot worse. For instance, consider how close South Africa came to commissioning a fleet of Russian nuclear plants. Apart from the bankruptcy-inducing cost of Jacob Zuma’s pet project, the price guarantees would have lumbered the nation with excessive electricity prices for decades. Something the British will be digesting for decades.
Short-sighted British politicians bequeathed their nation a 35 year millstone called Hinckley Point, a nuclear plant guaranteed an inflation linked £92.50/megawatt hour for its output. That’s already 40% more than the price paid to the latest offshore wind projects. And the effective subsidy will only get worse.
As technology brings down prices, electricity harnessed from the wind and the sun continues to mushroom. For the first time last year, electricity from renewables exceeded that of coal in five key European countries. SA is enjoying the same virtuous cycle courtesy of its much admired renewables energy policy and the votes at December 2017’s election which avoided a millstone which would have retarded economic growth for decades.
Something to ponder when you’re wondering how long it will take to fix the mess created during those nine dark years.
Join me today at 12:30pm SA time as I host a post Davos webinar. Premium subscribers can register here.
