Recently, Eskom announced that it had succeeded in synchronising Unit 4 at Ingula – South Africa’s brand-new pump storage scheme – to the national grid. This was accompanied by the usual fanfare.
Ingula, however, is a net user of energy, and does not provide any baseload power. It takes advantage of the cheaper energy available at night to pump water from the lower dam to the higher dam. During peak times, this water is used to generate electricity, hence the moniker, ‘pump storage scheme.’ In my opinion, pump storage schemes are used for load shifting, and should not be seen as generation.
This got me thinking about the cost of energy. A report recently published by the American Association for an Energy Efficient Economy, suggests that energy efficiency is the cheapest form of energy. The report calculates and compares the levelised cost of energy for various forms of generation – coal, PV, OCGT, nuclear, wind and energy efficiency.
In the US, the levelised cost of energy (in US cents), is reported as follows:
- Solar PV 9c/kWh to 10,5c/kWh
- Nuclear 8,5c/kWh to 12c/kWh
- Coal 6,5c/kWh to 14,5c/kWh
- Wind 4,5c/kWh to 9,5c/kWh
- Energy efficiency 1,5c/kWh to 5c/kWh
It comes as no surprise that energy efficiency is the cheapest form of energy. Clearly, it is cheaper not to have to use energy than to find some alternative means of generation.
Let’s do some simple maths. Medupi, with an approximate capacity of 4 800MW, will provide enough energy for the equivalent of 1,6 million household geysers running at exactly the same time. If, instead of building Medupi, Eskom had supplied 1,6 million households with solar geysers, it would have cost the taxpayer R25 billion, instead of the R103 billion cost of Medupi. Moreover, most of the taxpayer’s hot water would thereafter have been free, whereas Medupi will continue to consume coal until the end of its lifetime.
Unfortunately, it is not quite as simple as that, purely because those 1,6 million geysers will never run at exactly the same time. This is called the diversified maximum demand. It should be clear, however, that energy efficiency, even in South Africa, is significantly cheaper than any other form of generation – the kilowatt-hour best saved is the kilowatt-hour not used.
Why then, if it is so cheap, is it generally neglected in South Africa? I believe that electricity in South Africa has been too cheap for too long, and as South Africans, we are nonchalant about how we spend our energy. Whenever an electricity price increase is announced, we kick up a fuss, yet few of us actually make an effort to be more energy-efficient.
What boggles my mind is that back in the 1950s, we were much better at this. Nothing written in this column is new, it has just not been applied due to the low cost of energy. The challenge is to teach ourselves to be more conscious about energy use.
We are highly conscious of everything else, after all: what we eat, the cars we drive, what we wear, and so much else. When we buy these things, we look for the best price, yet, when it comes to energy use, we are quite happy to leave the light in the workshop on overnight. Or we purchase equipment based on the price tag, and ignore the operational cost.
Ask yourself, do you buy a cheap car that is expensive to service and maintain, or do you spend slightly more and get cheap maintenance? This logic should apply to energy use. Yes, you can save some capital if you omit the insulation, but your heating or cooling system will have to work much harder.
US physicist, Amory Lovins, summed all this up neatly: “Efficient use of energy is generally the largest, least expensive, most benign, most quickly deployable, least visible, least understood, and most neglected opportunity in the whole economy.”