Energy plan far too conservative, consultancy says

New solar and wind power capacity provided for in the draft Integrated Resource Plan (IRP) 2023 must be at least doubled to ensure a secure and least-cost energy mix for SA by 2030, the consultancy Meridian Economics says.

In its submission to the department of mineral resources & energy as part of the public participation on the draft plan, the consultancy suggests that the plan is far too conservative in terms of the amount of renewable energy that needs to be added to the grid by 2030.

The draft IRP 2023, which will replace the 2019 version, has been met with much disapproval since it was published for public comment in January.

The plan provides a road map for future energy planning and private and public procurement of new generation capacity. However, the draft 2023 version has been widely criticised for being flawed, lacking ambition (especially for cutting back on renewable energy procurement) and threatening to trap SA in many more years of load-shedding, while procuring too much new capacity from expensive sources of energy such as nuclear and gas.

Meridian Economics also makes the case for rapidly adding more solar power in the next two years if SA is to escape load-shedding, and that the plan’s overreliance on gas in the short term makes SA more vulnerable to additional load-shedding.

“Our analysis has demonstrated that the IRP 2023 is an opaque document which does not achieve its own stated purpose and objectives of ensuring a secure, affordable and clean power system,” Meridian Economics said in its report.

Not only did “methodology problems and inappropriate assumptions” inform the IRP 2023, the plan also contradicted SA’s climate and green industrialisation policy.

Their modelling shows that accelerating solar power rollout, coupled with some increase in the battery storage, could help eliminate load-shedding faster and deliver affordable, reliable, clean power.

Targeted intervention

Meridian Economics suggested new solar capacity should be doubled from 11GW (as suggested by the IRP 2023) to 21GW-24GW by 2030.

“This capacity should be built as soon as possible and is likely to require a targeted intervention to achieve pace and scale.”

The consultancy said doubling new wind power capacity from the plan’s suggested 5GW to 7GW-12GW and increasing battery capacity from the IRP’s suggested 3.5GW to 6GW-7GW.

The draft IRP 2023 uses “unrealistic technology cost assumptions” such as inflated prices for solar and wind power. This, along with too little solar and wind power and other shortcomings, has resulted in an “inadequate planning document that does not provide a sound basis on which to meaningfully consult with stakeholders and subsequently finalise this critical update to SA’s high-level power supply policy”.

Its analysis, says Meridian Economics, supports the IRP 2023’s recommendation to add about 6GW of dispatchable, flexible gas-fired generation by 2030 to an extent, pointing out the risk posed by expensive, long-term gas offtake contracts.

This, the report says, is sensible “as an insurance mechanism against the failure of coal and potential challenges to building renewable energy generation”.

However, it says, the “extreme overreliance” on gas burn in the IRP 2023, especially in the short term, would put the system at high risk of additional load-shedding.

In its post-2030 scenarios, the IRP 2023 considers adding 14.5GW of new nuclear power, but Meridian Economics says its analysis does not support adding any new nuclear power.

Delay likely

“With the currently available commercially proven technology options, new nuclear power is not an economically viable or valuable option for the SA power system and should be avoided,” it says.

The deadline to submit written comments on the draft IRP 2023 was March 23. The department originally set out to finalise the IRP 2023 by end-May, but after extending the period for written comment by one month from February 23 to March 23 there is likely to be a delay in publishing the final plan.

The Organisation Undoing Tax Abuse (Outa) said last week that the draft IRP 2023 was so inadequate it “made a mockery of the public engagement process”.

“It is Outa’s submission that the current draft IRP 2023 contains a number of significant acknowledged errors, omissions and inadequacies and, as such, it should be recalled, reworked and reissued for public comment, with adequate time provided for a meaningful consultation process, including a series of public hearings around SA,” said CEO Wayne Duvenage.

He said though Outa had made a submission to the department, the corrections to the plan would need to be so substantive that it would require another round of public engagements once the assumption data was more accurate and transparent.

Business Day previously reported that the presidential climate commission in its analysis of the draft IRP 2023 found it failed to show how SA could feasibly escape load-shedding in the next few years.

erasmusd@businesslive.co.za