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Why a Huge New Coal Plant in South Africa?

MedupiSod There are certain press releases one doesn’t expect to see these days. This one from South Africa’s leading electric utility Eskom would be fairly high on the list:

Eskom has begun the process of building a new coal-fired power station, the first of its kind in twenty years. The Medupi Power Station, which means “rain that soaks parched lands” symbolizes economic relief to the area where it will be constructed, and was formerly known as Project Alpha and Project Charlie.

At least it won’t be acid rain that soaks those parched lands, but still, it seems rather late in the calendar for a large scale coal-based project. And this is a big plant, comprising six units with 4,788 MW installed capacity between them.

Naturally, we were a bit curious about where the money came from for the project:

The World Bank yesterday [April 8] approved a $3.75 billion loan to help South Africa build one of the world's largest coal-fired power plants, a decision long expected but bitterly fought from the streets of Durban to the halls of the U.S. Congress.

This demonstrates to some degree the difficulties that developing nations have with the Copenhagen Accord or the Kyoto Protocol, as demonstrated during Copenhagen when a group of such nations walked out of negotiations. (They returned later.)

Some poorer nations have taken the position that because the industrialized world is responsible for most of the greenhouse gas emissions already in the atmosphere — in effect exhausting the environment’s capacity to cope with carbon — rich nations must pay “damages” or “reparations”. These payments presumably would be used by emerging economies to cope with the climate changes that already are devastating some of them, and to increase their standards of living while minimizing their emissions.

It isn’t that they don’t want to participate, it’s that these countries – many of them former colonies – can feel the future slipping away from them as they modernize:

In many ways the Medupi debate underscored the broader struggle to determine what responsibilities fast-growing countries should take on in the effort to reduce global greenhouse gas emissions. South Africa and others like China and India insist their economies must be allowed to grow as industrialized nations did, and note that coal remains the cheapest and most abundant fuel source available.

Does this mean that South Africa is dealing in bad faith? Well, consider:

While the [World] Bank has continued to monitor developments in the field of nuclear energy, the loan to Italy for the nuclear plant on the Gargliano river [in 1964] remains its only loan for that form of energy.

Now, South Africa might have tried to secure a loan from another entity, but really, if the World Bank is going to offer loans for energy projects, playing renewables short (the same loan to South Africa allows for 100 MW each of solar and wind capacity) and nuclear as non-existent seems awfully retrograde. This has been noted by French President Nicholas Sarkozy:

Sarkozy said the World Bank, the European Bank for Reconstruction and Development and other such institutions should make a "wholehearted commitment" to fund civilian nuclear energy programs.

"It is a scandal that international organizations today do not finance nuclear projects," he said. "The current situation means that countries are condemned to rely on more costly energy that causes greater pollution."

“Condemned.” That’s pretty harsh, but not injudicious.

Slight correction: MW for megawatts – an oops. Thanks to Seth in the comments.

“Breaking sod,” as they say, at Medupi.

Comments

gmax137 said…
Just for comparison, I looked up the US generation for coal (I quickly found 2006 numbers at http://www.eia.doe.gov/cneaf/electricity/epm/table1_1.html): 1.99 billion MW-hrs per year. If the Eskom unit operated continuously, it would make 42 million MW hours a year. That's about one-fiftieth of the yearly US generation from coal.

Who do you think you're kidding? And I live here in the USA.
Seth said…
Hi Mark,

You may want to correct the minor error of mW --> MW. I have a feeling that their new plant will produce more than 4.7 watts of power...
SteveK9 said…
Need another comment from Sarkozy, specifically regarding this decision by the World Bank.
crf said…
The richest countries (mostly democracies) control the world bank.

That the world bank has not been able to come up with financing mechanisms for large scale clean energy is because of you and me. Developing countries cannot justify supporting the extra debt to develop more capital-intense clean energy: the world bank should explicitly provide support for this.

Developing world countries are not going to be able to easily self-finance their power infrastructure. (Even wealthy countries seem to have trouble.) There is an urgent need to put into place financing for energy projects that emit little carbon dioxide.

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