The rapid expansion of South Africa’s power supply has long been touted as the foundation for the country’s economic recovery. President Cyril Ramaphosa reiterated this in his 2021 State of the Nation Address, which he delivered the same week that South Africans were plunged back into Stage 3 load shedding.
While the Department of Energy is expected to announce welcome plans to secure an additional 2,000MW of emergency power, this latest crisis reminds us of the importance of energy planning to avert future shortfalls. The government has reportedly taken steps to procure a further 11,800MW of electricity in line with the Integrated Resources Plan (IRP), but its continued plans to import power from the doomed Inga 3 Dam on the Congo River in the Democratic Republic of Congo (DRC) risks future energy crises.
In 2019, Cabinet approved the Integrated Resource Plan to chart South Africa’s energy future, which included 2,500MW of hydropower from Inga 3 — a long-planned project that has attracted and stymied investors and planners since colonial days. This commitment was enshrined in a 2013 treaty, though it was recently indicated that South Africa’s intention is to increase its offtake commitment to 5,000MW. On the face of it, displacing coal with imported hydro would be a positive, but pinning our hopes on Inga coming to fruition would ignore recent history and represent a major threat to South Africa’s future energy security.
Inga was the focus of a seemingly endless series of suitors in 2020. A German firm put itself forward to harness Inga’s significant hydropower potential to produce hydrogen, which Europe has advanced to reduce its reliance on coal. Meanwhile, speculation persists that the Australian firm Fortescue could replace the Chinese and European firms that were granted the construction tender, or become a major offtaker in its own right. A half dozen African countries are vying to sign agreements for Inga’s power, with another dozen reportedly waiting in the wings
South Africa has been down this path before. In 2004, South Africa was to be the anchor customer for Inga 3’s power, only for the DRC to renege on the deal and grant the project to BHP Billiton, which had plans to build a smelter in Congo. When BHP Billiton withdrew from the deal in 2012, the project was back to square one.
Throughout the decades, the Inga site has been the object of grandiose ambitions, and these latest manoeuvres may be just the newest iteration. But if nothing else, they are indicative of the perpetual state of chaos that surrounds the project, as well as the unreliability of the DRC as a partner.
Even if the DRC holds up its end of the bargain, South Africa will be exposed financially. The transmission lines, which would have to traverse thousands of kilometres and several countries en route, are likely to cost upwards of $4-billion — an astounding R58-billion. Our anaemic budget would have to shoulder the costs of securing these lines, in addition to paying for the power. Given the impending budgetary announcements during South Africa’s fiscal crisis, South Africa’s required outlay for the construction of transmission lines alone would cripple us.
Alarmingly, the South African government has not conducted any discernible public due diligence, and it appears that no socioeconomic impact assessment was undertaken, and nor has the state completed any environmental assessment.
At such a critical time, South Africa should rather be focused on harnessing our domestic renewable resources, which are cost-competitive and can become a major driver of employment. Without the prohibitive commitments to the DRC, South Africa can ignite local opportunities to create much-needed jobs in a national economy that shed 2.2 million jobs during the Covid-19 pandemic. If the construction of Inga 3 goes ahead, not one job will be created for South Africa’s workers, who otherwise stand to benefit from investment in our renewable sector.
Since the treaty with the DRC was signed in 2013, Inga is even further away from becoming a reality. With the agreement set to expire in 2023, South Africa should use this opportunity to act in accordance with its own constitutional principles of good governance and withdraw from Inga 3 once and for all, and pivot to more realistic energy solutions. This will give the country a chance to focus on sustainable, realistic local power-producing projects that ensure its energy security. This is undoubtedly a better plan than sending good — and desperately needed — rands and local jobs down the river. DM