Eskom Says Pollution Ruling May Shut 16 Gigawatts of Power
(Bloomberg) -- Eskom Holdings SOC Ltd. has warned that the rejection of its application for higher air pollution limits by South Africa’s environment department could see it close more than a third of its power generation capacity.
The state-owned utility that supplies almost all of the country’s electricity said the refusal to allow it to delay complying with new emission limits at a number of its plants would mean that it will need to spend more than 300 billion rand ($19 billion) to meet the requirements. The company, which has 400 billion rand of debt, will appeal to the environment, public enterprises and energy departments, over the decision.
The outcome will “have a significant negative impact on the economy and employment,” Eskom said in an emailed statement on Tuesday. It would rather spend money on renewable-energy plants than retrofitting aging coal-fired plants with pollution abatement technology, the company said.
Eskom is the world’s biggest emitter of sulfur dioxide, a pollutant linked to ailments ranging from asthma to heart attacks, according to the Centre for Research on Energy and Clean Air. It accounts for about 40% of greenhouse-gas emissions in South Africa, the world’s 12th-biggest producer of the climate-warming fumes, and produces other pollutants such as particulate matter and nitrogen dioxide.
The utility is already struggling to meet demand for power in Africa’s most-industrialized economy, curbing potential economic growth.
South Africa’s National Air Quality Officer, Thuli Khumalo, was critical of its attempts to cut air pollution.
“Eskom has made minimal effort to fully comply with the standards,” she said in a letter notifying it of her decision, which was made on Oct. 30. Granting the requests would be illegal, Khumalo said.
Eskom had sought to be allowed to emit as much as 4,000 milligrams of sulfur dioxide per normal cubic meter at Medupi, one of two new coal-fired facilities, until 2030. Instead, it was told to keep to an already agreed temporary limit of 3,500 milligrams and ultimately comply with a 1,000 milligram limit. That cap is higher than those for China and India, the world’s two biggest producers of electricity from coal.
Eskom’s requests for postponements at the Medupi, Matla, Duvha and Lethabo plants were declined, it said. Applications were partially approved for Tutuka, Majuba, Kendal and Kriel, and accepted for the Grootvlei, Camden, Hendrina and Komati coal-fired power plants. A request to delay compliance at the Acacia and Port Rex natural-gas facilities was also granted.
The approvals were only granted for plants scheduled to close by 2030.
South Africa has been sued by environmental groups because of pollution produced by Eskom and petrochemicals company, Sasol Ltd. Judgment in the case was reserved earlier this year.
“Eskom has had ample opportunity, and extensive government leniency, to ensure it can comply with these provisions, which are weak compared even to those of other developing countries,” said Robyn Hugo, director of climate change engagement at Just Share NPC, a shareholder activist organization. “Eskom should, at the very least, publicly acknowledge its significant failures to mitigate the toxic air pollution it produces, and the fact that this pollution itself has severe economic consequences.”
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