Health Systems Action

In 2011 we could have ended the Eskom crisis, reduced residential carbon emissions and had healthier air to breathe

August 2008 saw the first of South Africa’s rolling blackouts (load shedding). Three years later, the R360 billion financing of two massive coal-fired power stations – Kusile and Medupi – was approved. At around the same time, financing to move the country toward a very different energy future was proposed: a Green Bond to pay for energy conserving interventions and renewable energy production in residential households.

This far-sighted idea was a 15 year old student’s entry to the national high school Science Expo – and is still relevant today.

Had the country taken such an approach, there might have been no need for the new power stations, carbon dioxide emissions could have been reduced, and we’d have had healthier air to breathe.

Figure 1: Global atmospheric carbon dioxide concentrations (Source:

The idea in context

SA gets 85% of its power from coal, a reason why we are the world’s 14th largest emitter of greenhouse gases despite being only the 35th largest economy. The health costs of coal-fired electricity generation are significant, arising not only from the contribution to climate change[1] but from the air pollution[2] and water scarcity[3] that results.

The student’s Green Bond project explored the idea that enough energy could be saved, or produced, by domestic households to avoid the need to build Kusile or Medupi, while helping to lower South Africa’s carbon footprint and reduce net household electricity costs. The proposal was for introducing what she called Energy Efficiency (EE) interventions along with renewable energy from photovoltaic (PV) (solar) cells and small wind turbines.

Figure 2: Using electricity from the grid – and feeding it in

The questions were:

How much would these interventions cost each household?

What would it cost government?

What would this look like, scaled across SA as a whole?

Cape Town’s households

In 2011 there were 800,000 formal households in Cape Town, with 40% classified as mid-to-high income, and 60% as low income. A mid to high income household was defined as having 6 rooms: a kitchen, a living room, 3 bedrooms and a bathroom.  A low-income household was an RDP house, or a similarly styled and sized construction, with 2 to 4 rooms.

“EE” interventions

Proposed Energy Efficiency interventions in mid-high income households, were:

  • installing a solar water heater (200 litres)
  • CFL (compact fluorescent) lighting
  • adding insulation (so that heaters and fans are on for fewer hours)
  • installing three 200W PV solar panels and a 3kW wind turbine.
  • two behavioural adjustments: computers and TVs turned off, rather than left in standby mode, when not in use, and clothes sun-dried in summer months.

In low-income households, the interventions were:

  • installing a solar water heater (150 litres)
  • CFL lighting
  • installing insulation, and
  • four 360W PV solar panels
  • paraffin stoves (used for heating and cooking) would be replaced with electrical bar heaters and electric stoves.

Study methods

Cost and other key published data from local and international sources were used to “run the numbers” in a series of linked spreadsheets.

For example:

  • Electricity costs in 2011 ranged between 73-88 cents per kWh
  • A litre of paraffin, commonly used for heating and cooking in low-income households, was R8.81.
  • Cape Town on average has 8.5 hours of sunshine a day.
  • Cape Town’s daily average wind speed is 4m/s.
  • 1.02 kg of carbon (CO2) emissions are released for every kWh of electricity generated by Eskom.
  • 2.58 kg of CO2 emissions are released for every litre of paraffin.

The projections incorporated the 25% tariff increase which had been announced for 2012 and subsequent 8% annual increases.


Energy consumption and CO2 emissions

In mid- to high-income households, energy consumption was calculated as 1130 kWh/month, leading to CO2 emissions of 1147 kg/month.

In low-income households, average consumption was estimated to be a third as much –

376 kWh/month (plus 28 litres of paraffin), resulting in CO2 emissions of 455 kg/month.

Total cost of EE interventions

For a high-income household, the total cost of EE interventions was estimated to be R157,835; for a low-income household, R53,149.

Green Bond repayments

Initial monthly Green Bond payments, assuming a 20 year payback at 10% interest rate, were calculated as R1,523 and R512 for mid-high and low-income households, respectively.

Net savings

Based on the models, households would, over time, save money (Graphs 1 and 2) due to reduced energy bills and “Feed-In-Tariff“ payments for electricity supplied to the grid. As electricity prices increase, Feed-in-Tariff payments go up and household monthly costs decrease.

In a typical high-income household (Graph 1), installation of a 3kW wind turbine and three 200W PV solar panels in would produce a monthly excess of 20.1 kWh.

“During the first year, the household pays R449.69 more than it would have paid without EE interventions for its electricity bill; however, electricity prices are increasing rapidly. This means that over time, (within 3 years) the household will actually be saving money, and eventually even earning money.”

Graph 1: Monthly costs, with and without Green Bond and EE interventions, mid-high income households

In a typical low-income household (Graph 2) the total cost of the EE interventions was estimated as R53,149. Green Bond monthly payments are R512 but the household would also receive its monthly Feed-In-Tariff payments for the 129 kWh of excess electricity it produces, bringing household monthly costs down to R392. In the first year, the household already has net costs R74 lower than without EE and earns progressively more each year.

Graph 2: Monthly costs, with and without Green Bond and EE interventions, in low-high income households

The total cost of providing Green Bonds to every electrified household in Cape Town was estimated at R76 billion, less than the planned cost of building one of the new power stations.

Study conclusions

The study concluded that Cape Town’s households could be made energy efficient and generate 1.84 MW (about 38% of the expected 4.8 MW output of one of the new power stations) funded by a R76 billion Green Bond paid back at commercial interest rates (10%), while producing net savings for domestic households (particularly low income ones), and reducing their CO2 emissions to zero. Theoretically, both household types could operate with their own energy generating capacity to reduce their net grid consumption to 0 kWh/month, effectively eliminating their CO2 emissions.

“Although they will not eliminate the need for a new power station, the Green Bond and the Feed-in-Tariff scheme should both be introduced in South Africa. This would save the country large amounts of electricity, and reduce its carbon footprint. It is also affordable, as citizens could repay the costs over a period of 20 years.”

“The government could easily raise the money for the loan, because it can be repaid at a normal interest rate. Lenders in the international market would be interested, because they would earn a profit.”

“These schemes would provide all with the motivation to install EE interventions and renewable energy generators in their households, because the large initial injection of capital, which usually discourages people, has been removed. Also, these interventions would actually result in a long-term financial saving for each individual household, and with the Feed-In-Tariff scheme, the household could eventually even earn money, assuming household electricity consumption remains at current levels.”


A professional review would have pointed to various challenges. For example, assumptions about energy consumption and cost savings might not reflect the variability in actual household behaviour, the complexity of implementing such financial instruments is significant, and factors like maintenance, energy storage and technology adoption rates that were not addressed. But the proposal surely had merit and was worth consideration, especially in light of what transpired over the next dozen years.

Twelve years: what happened?

Kusile’s build was expected to take 6 years and R81 billion but in September 2023, after 15 years of construction, no power was being produced, and at least R233 billion had been spent. A commentator noted that the power stations 6 units will ‘realistically’ generate only 350MW rather than the planned 800 MW each. At Medupi – planned cost R79 billion – the accumulated spend by October 2022 was R161 billion, with only 4 of 6 units operational.

The cost overruns at Medupi and Kusile have been the main causes of the state-owned utility’s $25.5 billion debt load which have bankrupted it and lead to downgrades in the country’s credit rating.

Over the period 2011-23, electricity tariff increases increased by a factor of 3 or 4 (Cape Town 2023: R2.11-R4.26 per kWh) as Eskom fell further behind in meeting the country’s needs.

According to a 2012 study, health costs of Medupi and Kusile over their lifetimes will amount to R450 billion. These costs are externalised to society and the environment and not reflected in the electricity tariffs or financial statements of Eskom.

Meanwhile, South Africans have “built a Medupi” (one that works) themselves. By July 2023 the estimated capacity of solar panels on rooftops had risen from 983MW in March 2022 to a Medupi- or Kusile-sized 4.7GW July 2023. 

We could have started a decade earlier, saved multiple hundreds of billions of rands and protected the health and welfare of our people.

Failures at Kusile and Medupi were not due to a lack of good ideas from smart teenagers, or others. Deficient project management, corruption, labour disputes, vandalism and absenteeism have periodically stalled the project and caused massive cost over-runs, a price we have collectively borne.

Ironically, the high school science competition was (and still is) sponsored by Eskom. In 2011 was anybody listening to the young scientists? Is anybody listening now?


Total cost of providing a Green Bond to every electrified household in Cape Town: R76,019,080,000 (R76 billion). This is less than the projected cost of building one of the planned power stations – R120,000,000,000 (R120 billion).  “Providing Green Bonds to every electrified household in Cape Town would not save or produce enough electricity to eliminate the need for a one of the planned power stations. However, if the Green Bond idea were initiated in the whole of South Africa, it probably would save and produce enough electricity to do so. “   “The Green Bond idea should still be implemented in South Africa, because it will reduce South Africa’s carbon footprint, and it is affordable. After 20 years, the money will not only have been repaid, but the government will have earned a 10% interest on its capital investment.”  
Total amount of electricity saved in a month:  235,699,800 kWh.
Total amount of excess electricity produced in a month: 50,934,246 kWh.
Total amount of electricity saved and excess electricity produced in a month: 304,053,853 kWh.
Peak electricity capacity of the EE interventions (when the sun is shining and the wind is blowing): 1,843,200 kW or 1,843.2 MW.
One of the planned power stations can produce 3,504,000,000 kWh of electricity in a month. Its peak capacity is 4,800 MW.

Findings from the “Green Bond” entry to the 2011 high school science competition



[1] Medupi and Kusile are among the largest sources of greenhouse gas emissions in South Africa, contributing to global warming and its associated impacts on health, such as heat stress, vector-borne diseases, food insecurity, and extreme weather events.

[2] Large amounts of particulate matter, sulphur dioxide, nitrogen oxides, and mercury, which can cause respiratory diseases, cardiovascular diseases, cancers, and premature deaths

[3] The power stations require huge amounts of water for cooling, washing, and ash disposal, which can deplete the already scarce water resources in their regions and affect the availability and quality of water for human consumption and agriculture

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