South Africa has suffered several severe energy shocks in recent years, including rolling black-outs in 2008, which caused significant damage to the South African economy. This reflects many years of little or no investment in energy infrastructure.

However, the current proposal is seen by many as an attempt to sustain very low-cost energy supplies to South Africa’s intensive and extractive industries, dominated by a few multinational corporations, BHP Billiton, Anglo American, Arcelor Mittal and others, rather than an effort to address the underlying energy needs of communities. South Africa’s mines and smelting operations use around 40% of the country's energy, supplied under contract conditions which make it the cheapest power in the world. They export their profits, contributing to South Africa’s huge current account deficit, for which South Africa was labeled the world’s most risky emerging market by The Economist.

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Eskom and the South African Government have suggested that new coal-fired capacity will enable South Africa to guard against future energy shocks, support industry and sustain growth. This, in turn, they claim, will assist South African development and alleviate poverty.

In fact, the project will NOT support sustainable development and poverty alleviation, but instead will add costs onto ordinary South African energy customers. They already face higher charges, an average of 25% price increases from 2008-12, although in 2010 inflation was only 5%, and significant energy access challenges, including millions of electricity disconnections. The World Bank’s own analysis suggests that support for fossil fuel and extractive projects has little benefit for poverty alleviation.

Moreover, evidence from the historical operation of South Africa’s energy system shows that whilst it is the extractives who benefit from cheap electricity, the cost of constructing the coal plant is likely to be borne by all South African citizens, which will increase fuel poverty. Indeed, the beneficiaries, the largest industrial consumers, are exempt from price rises because of multidecade special purchase agreements offered to them during apartheid and in the 1990’s.

As a result, this will entrench suffering by imposing "cost recovery" on people who cannot afford it, with Eskom asking for a "typical township household" to face a 2009-2012 monthly price rise from ZAR360 (USD48) to ZAR1000 (USD130).

According to the Centre for Global Development, the station would emit around 29 million tonnes of carbon dioxide per year, South African emissions in 2007 were around 452 million tonnes of CO2, according to data, supplied by the International Energy Agency to the Guardian. Friends of the Earth put the annual emissions of Medupi slightly lower - at 25 million tonnes per year. Medupi would then become the fourth most carbon intensive, as well as one of the largest, power plants in the world.

The South African power sector is already one of the most carbon intensive in the world. South Africa is responsible for 40% of the entire total of African emissions, with a per capita emission at around 9-10 tonnes per person, higher than that of many European countries and ten times that of most other African countries. Demand for coal is also likely to drive the opening and expansion of coal mines in South Africa, with devastating local environmental impacts.

If Eskom’s plans go ahead, including not just Medupi, but another even larger new coal-fired power station at Kusile, and a range of life-extensions and expansions, then the company’s own consultants anticipate that 35 new mines will be required to support them. Recent plans to expand South Africa mining operations into sensitive environments have caused international protests.

The proposed power plant would be extremely water-hungry, taking up essential water supplies in a country where scarce water resources are already compromised by mining activities. The impacts of mining on South Africa water supplies are well-documented. The Medupi coal power plant is is being built in the water-scarce region of Lephalale in the Limpopo province. One dam, the Mokolo Dam is currently providing the water supply for all mining, agricultural and power generating activities in the vicinity. The capacity of this dam is insufficient to also provide for the power generating activities required by the Medupi power plant. The leaked investigation report of the World Bank inspection panel, dating November 2011, confirms that there are significant water consumption issues due to the construction of the Medupi coal power plant. Both because of water scarcity and pollution in the local area.  

Health. A 2006 report by Eskom, which it was forced to disclose after the Centre for Environmental Rights filed a promotion of access to information act application in 2014, contained information about the health aspects of the Medupi power plant. It stated that when Medupi is operational, of those living within 25 km of the power station, 1.4 people a year will be killed and an additional 144 will be put in hospital. Health risks could be decreased, if flue gas desulphurisation technology would be used. The utility company has used this technology in their new power station in Kusile, but has asked for a delay in the implementation for Medupi until 2027. 

Working conditions. The project has been subjected to several strikes over the years, with workers demanding better working conditions and wages and complaining about discrimination. The most recent strike in March 2015 led to contract termination of 1.000 employees.