South Africa’s decision to introduce a carbon tax by 2020 will impact coal mines in an already declining coal market, leading to further coal mine closures and impacting on Eskom’s security of supply, Kubeshnie Bhugwadin, Eskom’s renewables research manager, said at a gas workshop hosted by the Fossil Fuel Foundation.
“Electricity tariffs are going to increase and when Eskom increases its prices, our customers will look for alternate forms of energy, which right now will probably be gas or solar power,” she said. Bhugwadin pointed out that if Eskom wanted to remain in the coal business, it would have to offer competitive prices to consumers, noting that the price of renewable energy was decreasing.
“In round one of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), solar energy cost R3,29/kWh, in round two it was R1,96/kWh, in round three R1,05/kWh and we are now sitting at 79c/kWh,” she said, adding that it was going to get even cheaper in the ensuing round of the REIPPPP.
She also pointed out that the cost of wind energy was currently 62c/kWh, while the cost of coal-fired power generation was currently 79c/kWh.
Source: Engineering News