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Minister Lynne Brown: Release of KPMG Report on Koeberg power station

30 Mar 2017

Minister Lynne Brown's remarks on the release of the KPMG Report on Koeberg power station

Director-General Mogokare Richard Seleke
Mr Zethembe Khoza, Eskom Board Member representing the Chairperson, Dr Ben Ngubane
Mr Matshela Koko, Acting Group Chief Executive Officer and Eskom Executives
Mr Velaphi Ntuli, Manager at Koeberg Power Station and his team
Mr. Sedick Davids project leader of the Koeberg socio impact team
Director-General Mogokare Richard Seleke
KPMG officials present
Members of the media
Ladies and gentlemen

Let me start off by praising Eskom – though I know it’s not fashionable. They do give me lots of grey hairs, but by commissioning an economic impact assessment of Koeberg Power Station they have done us all a favour.

They have done us a favour by placing credible information on the table at the right time, as our nation embarks on what is a truly critical journey from a predominantly coal-powered economy to an energy mix that will include coal, renewable, gas and nuclear power.

I would encourage the gas and renewable sectors to undertake similarly informative studies.

Besides keeping the lights burning, it is important that we understand the impacts power stations have on our economy and our lives. Not only nuclear power stations; all power stations.

They generate jobs, and they generate work for the construction industry, for maintenance teams, and for the producers of a multitude of goods and services. They stimulate – and sometimes carry almost single-handedly – entire local economies and communities.

For a developmental state such as South Africa, with a decades-long dependency on the coal industry to feed hundreds of thousands of citizens, the transition to an energy mix is understandably a complex undertaking.

You would have seen the recent protest action in Pretoria by coal-truck drivers angry about the imminent closure of four ageing coal-powered stations in Mpumalanga. On the same day, the High Court in Pretoria effectively blocked the development of a new coal-fired power station because its impact on climate change had been considered.

Certainly, we are dealing with issues much more complex than deciding whether to build a few windfarms or nuclear power stations.

  • There are environmental factors to consider including the costs of compliance with reduced emmissions requirements.
  • There are the requirements to keep electricity available – including at peak times, rain or shine – and affordable.
  • We’ve got to work out how to maximise the production of parts and equipment for the renewable industry in South Africa.
  • And we need programmes to re-skill coal industry workers so that we ultimately see a nett jobs gain in the power generating industry rather than job losses.

The Economic Impact Assessment of Koeberg does not provide answers to all the questions. But it adds context to the journey we are on and helps us to understand what’s at stake. That’s why it’s important.

The Assessment, produced by KPMG, is not intended to persuade anyone to alter their philosophical views on nuclear power; it is meant to inform.

For me, what's important now is not proving whether nuclear is preferable to coal, or renewables to gas.

The energy mix is a matter of national policy, and what’s important is understanding the complexity of the journey, and just how much is on the line.

There will be many opportunities along the way. It’s important that we recognise the opportunities and harness them for our collective benefit.

Ladies and gentlemen

Koeberg Power Station currently supplies approximately 5.6 percent of the power (1 860 MW) used in South Africa and 50 percent of Western Cape’s energy demand, while adding diversification to the energy mix.

According to KPMG, between 2013 and 2016, Koeberg contributed R29 billion to the GDP of the Western Cape Province (1.4 percent of the Provincial GDP) and R23 billion to the rest of the South African economy.

The power station is expected to add R27 billion to the Western Cape Provincial GDP and an additional R22 billion to the South African economy between  2016/17 and 2019/20.

Koeberg (and its web of suppliers and service providers) contributed R8 billion to Western Cape provincial revenue between 2012/13 and 2015/16 through direct and indirect tax collection. Koeberg contributed another R9 billion to the fiscus over the same period.

Boiling it down to household level – the coalface of poverty, inequity and unemployment – the Koeberg project added R20 billion to household income between 2012/13 and 2015/16. R3 billion (13 percent) went to low income households in the Western Cape.

Nationally speaking, Koeberg contributed R15 billion to household income between 2012/13 and 2015/16.

I know so many numbers can be taxing but please bear with me just a little while longer.

Let's talk for a moment about jobs. Between 2016 and 2020, Koeberg expects to weigh-in with an average of 2 300 direct and 42 000 indirect jobs per annum in the Western Cape. We are not talking menial labour; the income levels for Koeberg’s employees is above the industry average in South Africa which points to the highly skilled nature of the jobs opportunities available at Koeberg.

Nationally, in the same period, the power station expects to contribute approximately 63 000 jobs.

These are huge numbers. I’m not aware of any other single-facility industry that comes anywhere close.

Although KPMG was looking at Koeberg, in this instance, the type of numbers they managed to extract don't just apply here, or even just to nuclear power stations.

Ladies and gentlemen

To conclude, the point I would like to leave you with is that power generation is not just about power. Yes, power stations supply that critical resource, and we’d like them to do so sustainably and cleanly.

But in the bigger picture they are located at the very heart of the economy. They are massively fertile locations for jobs, and fundamental to economic growth.

The journey from coal to an energy mix is not just complex. It is also emotional. It involves people’s livelihoods, what the country can afford, and global commitments to retard climate change. And there are strong opinions for and against nuclear generation.

I would like to thank Eskom for conceiving this study, and those members of the media who could join us here today. By keeping citizens informed of the energy mix project you provide a real service to the nation.

For enquiries contact:
Colin Cruywagen
Cell: 082 377 9916

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