Picture: THINKSTOCK
Picture: THINKSTOCK

Future energy planning should provide for decentralised, liberalised energy markets, City of Cape Town director of electricity services Les Rencontre said in a submission on the draft Integrated Resource Plan (IRP) and Integrated Energy Plan.

"Centralised planning has not delivered optimum solutions," Rencontre told participants in the Cape Town consultations about the plan on Tuesday. The third leg of consultations was held in the city following those in Johannesburg and Durban.

He said an institutional regime change was required to allow local governments to plan their own energy futures, and an independent system operator had to be established. It should also provide for small-scale revenue-embedded generation within municipal electricity networks, as well as direct purchases of energy from independent power producers by municipalities, particularly by larger metros.

Rencontre agreed with several presenters that the base case should be built on least-cost energy sources with no artificial constraints on the growth in the share of renewable energy. A different energy mix would reduce projected energy costs by 25% on the same base-case scenarios.

He said that the City of Cape Town was using less energy than about 10 years ago despite its larger economy, which he said proved a far lower growth rate had to be built into the base case of the draft plans.

Rencontre said higher costs would have to be recovered from consumers or distributors and most local governments.

"Not looking at a least-cost scenario is going to have a definite negative social impact across the country."

Department of Energy deputy director-general Ompi Aphane said he would convey the request for more time to make submissions on the draft plans to Minister of Energy Tina Joemat-Pettersson. The deadline is end February, which stakeholders have complained provides little time for submissions.

The Cape Town Chamber of Commerce and Industry’s Heini Nel appealed for an extension to at least the end of March.

Aphane also addressed another criticism, that the department had not produced credible studies to support its claim the grid was too constrained to accommodate many more renewables.

Critics have attacked the draft IRP for placing what they call artificial constraints on renewable energy to give a bigger role to nuclear.

Aphane said the grid had reached full utilisation in the Northern Cape and elsewhere, and independent power producer projects had had to be rejected. Investment would be required in more transmission lines to allow for uptake in renewable connections.

A decision on the expedited bid window was likely in 2017.

Aphane said Eskom had expressed reservations about specific renewable programmes that had been adjudicated, but the expedited bid window was not one of them.

Africa Infrastructure Investment Managers investment principal Francis Jackson stressed the need for the IRP to embody the inevitability of uncertainty in the energy market by providing for shorter lead times and smaller units. This would allow for flexibility and lower the risks.

"Long lead time [and] bulk units are [a] liability," Jackson said. Like other critics of the IRP, he said that its cost of energy assumptions were not reflective of the current market.

Regular updates of the plans would be necessary to adapt to changing market conditions.

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