President Cyril Ramaphosa. Picture: ELMOND JIYANE/ GCIS
President Cyril Ramaphosa. Picture: ELMOND JIYANE/ GCIS

In a win for President Cyril Ramaphosa, SA will steer clear of nuclear in favour of cheaper and cleaner power sources, although coal will remain a key part of electricity generation.

The long-awaited draft Integrated Resource Plan (IRP), released on Monday, was welcomed as a credible energy plan after years of policy uncertainty.

Energy policy was one of the main political battlegrounds during Jacob Zuma’s presidency, whose preference for a costly nuclear strategy was mired in allegations of corruption and state capture. Those struggles led to chronic delays in updating the IRP.

"Once again we are seeing the difference being made by a Ramaphosa administration compared to the corrupt Zuma years when our electricity planning process was paralysed as he tried to force nuclear into the mix," said Anton Eberhard, a professor at the University of Cape Town’s Graduate School of Business. "The absence of nuclear clears the way for more rational discussions around new power investments."

The draft IRP makes few significant deviations from what is already known to be in the energy mix and on the horizon.

Although more costly than other technologies, the plan includes coal-fired power, like that produced by the long-delayed Medupi and Kusile mega-builds, which will account for 46% of installed power in 2030.

This draft suggests that the department of energy is slowly dimming the lights on Eskom

It proposes that renewable energy makes up 26% of the installed power supply and that, by 2030, the largest allocations will be for wind (15%) and photovoltaic (10%) — both of which have experienced large declines in technology costs in recent years. These will be complemented by gas, which will comprise 16%.

Smaller amounts of hydro, pump storage and concentrated solar power are also included in the plan. The only nuclear is that which Koeberg already supplies and will account for 2.5% of capacity in 2030.

"Demand projections up to 2030 are much lower. That means we have to procure much less power," Eberhard said. Considering the Medupi and Kusile coal power units still to come online, and the renewable projects already procured under the government’s green power procurement programme, "we don’t actually need power before 2025, even with the scheduled decommissioning of old, dirty coal power stations", Eberhard said.

"But after 2025, substantial amounts of new power is needed. All the IRP scenarios agree this should be a mix of solar, wind and gas."

The draft plan is, however, not without sticking points.

Ronald Chauke, energy portfolio manager at the Organisation Undoing Tax Abuse, said the proposal for gas to contribute 16% was a "huge assumption" as SA had no local gas production.

"We should do it right, at a smaller scale. Five percent, or even 10%, would be reasonable enough so as to test those waters," he said.

Eberhard said 1,000MW from two independent coal-power projects would probably be opposed by environmental groups, Eberhard said.

The government had forced these into its "policy-adjusted plan" as they did not appear in the lowest-cost IRP scenarios.

The inclusion of 2,500MW of hydro power to facilitate a treaty with the Democratic Republic of Congo on the Inga Hydro Power Project was a bold step, considering the project had failed to get started after 30 years of talking about it, he said.

Chauke said that beyond Medupi and Kusile coming online, the plan inferred a much reduced role for Eskom and forecasts less than 20% of energy would be supplied from coal by 2050.

"This draft suggests that the department of energy is slowly dimming the lights on Eskom and making way for other supply sources."

steynl@businesslive.co.za