RICHARD WORTHINGTON: Proper integrated energy planning for SA is now urgent

The announced merger of three state-owned enterprises (SOEs) in our oil and gas sector to create a new investment vehicle for “domestic” gas and oil (or derivatives) production, adds renewed urgency to calls to undertake integrated energy planning, as described in the 1998 Energy Policy and legally required in terms of the 2008 Energy Act (Clause 6, which came into effect this month).

The most immediate concerns regarding the “new” SOE (comprising the Central Energy Fund, Strategic Fuel Fund and PetroSA) include how existing debt may be offloaded, and the nature of the financing arrangements already lined up, including with Russia’s Gazprom. However, the bigger picture is the proposition to extend and expand our economic dependence on fossil fuels long term, in the absence of an overall plan for our energy system.

The rationale for integrated energy planning, embraced by the government in 1998, is to give effect to democratic governance of the energy sector, including long-term investment strategy and short-term system development informed by an holistic understanding of all our energy needs, the options available to meet these needs, and the merits of these options from a whole-of-society perspective. Objectives include achieving universal access to modern energy services.

Declining to implement integrated energy planning is a betrayal of a commitment to democratic governance that is potentially more ruinous than governance failures regarding individual SOEs. Compiling a set of supply-side strategies for the various energy resources and carriers on which our economy depends (led by short-term investment prospects) is the antithesis of integrated planning, though even this has not been accomplished.

To realise its potential, integrated energy planning should be approached as a process of social compacting: a participatory engagement that helps all stakeholder understand the energy system we have, the strategic decisions and options available, and to collectively deliberate on where priorities converge and how contending interests might be reconciled, and how compromises should be mediated. This potential has long been articulated in international literature, as well as local civil society advocacy.

The objective of integrated energy planning is not simply to produce credible plans derived from technocratic analysis though the science-based foundations available through modelling and scenarios development provide powerful tools and perspective and as such their assumptions and use must be transparent to all. Seeking common ground among social partners on key inputs to analysis at the outset will support more meaningful and productive engagement on the outputs.

The most recent attempt to develop an integrated energy plan, not to be confused with the electricity supply plan known as the Integrated Resource Plan (IRP) saw the then department of energy publish an IRP 2016 as a draft for public consultation, with provincial workshops. The comments closed on March 31 2017 and nothing further has been seen of the document or process.

Launching IEP 2016, then-minister Tina Joemat-Pettersson stated: “The purpose of the integrated energy plan is to provide a road map of the future energy landscape for SA ... the integrated energy plan is a continuous process and takes into account the changes in the macroeconomic environment, developments in new technologies and changes in national priorities and imperatives, among other factors.”

The “continuous process” and related capacity-building, research and analysis appears to have gone into abeyance when the department of energy was transferred to Gwede Mantashe’s ministry, to be integrated with the department of mineral resources. This may explain why modelling of electricity generation for a draft IRP published this year was done by Eskom and is not clearly explained by officials, as well as the lack of recent official energy data.

The combined department of mineral resources & energy’s IRP 2023 (public comment closed last month) seeks to pre-empt an holistic and participatory integrated energy planning process for the energy sector, a role that should expand rapidly to support sustainable development. It seeks binding decisions to rapidly establish a large natural gas sector with electricity generation as the anchor (using imported gas for at least the short term), to extend the life of various coal-fired power plants (costs yet to be quantified) and commit to a large new nuclear procurement.

In parallel, the government is subsidising rehabilitation and growth in the oil industry and the department is seeking to bed down long-term investments in SOEs that evade democratic governance, with the only semblance of “public ownership” being through pension funds and debt. Whether complacent or horrified at the climate implications of such fossil-heavy commitments, the shifting global energy and investment landscape make them increasingly high risk, not just for investors but also in terms of their eventually delivering energy as envisaged.

The energy investments pushed by Mantashe clearly conflict with the clear and science-based recommendations of the Presidential Climate Commission early last year, aligned with the Framework for a Just Transition previously approved by cabinet. The commission has noted that the IRP does not address the millions of households trapped in energy poverty, while the inadequate provision for free basic electricity is failing, with less than a quarter reaching intended beneficiaries.

Realising the opportunities for directly reducing dire poverty and inequality through the provision of basic energy services will be a core focus for an integrated energy plan process that explores energy development pathways most compatible with a good life for all, by about mid-century. The Southern African Faith Communities Environmental Institute is calling on the government to initiate a proper integrated energy plan without further delay.

• Worthington is a freelance associate of SAFCEI.