Hidden costs could add between R31,2bn and R60,6bn a year to the cost of South Africa's Kusile coal-fired power station, Greenpeace Africa said on Thursday.

These costs relate to the station's impact on water and health in its immediate environment, mining and climate change.

South Africa - on the back of a $3,75bn World Bank loan, among others - is building two coal-fired power stations at a cost of R219bn and recommissioning three coal-fired plants to ensure security of supply.

Kusile would be the world's fourth-dirtiest power station because of its size and geographical location in an area that is already heavily polluted, said Melita Steele, climate campaigner at Greenpeace Africa, at the release in Johannesburg of a report by the activist group titled "True Cost of Coal".

The report includes independent research by the University of Pretoria's business enterprises unit, which concluded the social costs of the power station would be between R31,2bn and R60,6bn a year.

The power station, situated close to the existing Kendal power station near Witbank, Mpumalanga, would use an estimated 17-million tonnes of coal a year and generate 37-million tonnes of carbon dioxide in the same period, she said.

"There is a disconnect between what South Africa is saying on an international (platform) and what it is doing domestically," Ms Steele said

The government has received international praise for promising, at the 2009 United Nations climate-change talks, to reduce its domestic greenhouse gas emissions by 34% before 2020 and by 42% before 2025, subject to "adequate financial and technical support".

Hilary Joffe, spokeswoman for Eskom, said the national power utility agreed with Greenpeace Africa that the country had to move towards cleaner energy, but the government also had to balance security of supply and affordability with the need to move towards cleaner energy technologies, including renewable energy sources.

"That means coal will be an important part of South Africa's energy mix for some time," she said.

The World Bank loan includes $350m for renewable energy. South Africa generates less than 1% of its energy from renewable sources.

Ms Steele said if 30% of the money that was to be spent on Kusile were put into renewable energy sources, it would be possible to develop 500% of Kusile's proposed power-generation capacity from these sources.

blaines@bdfm.co.za