After a six-year delay, the government finally released the Integrated Resource Plan (IRP), its long-term energy plan, last week. Given the difficulties, delays and lack of political courage that former ministers have suffered, mineral resources and energy minister Gwede Mantashe deserves some credit.
The plan maps out how SA will meet its energy needs by 2030. Coal is expected to account for 43% of installed capacity, with 33% in wind and solar power. This means the government will seek to procure from the private sector or build the generation capacity through Eskom to meet supply.
This is a substantial change. At present coal generates almost 90% of energy, with only 5% coming from renewable energy and the remainder from Koeberg’s nuclear plant. The proposed energy mix will be cleaner and cheaper than it would have been to continue on such a coal-intensive path, because renewable energy is now the cheapest new form of generation.
The plan moves SA in the right direction and takes account of the rapid technological development in the sector as well as the urgent need to take account of climate change. But even though Mantashe took a giant six-year leap, he didn’t quite manage to leave behind the politics that has dogged energy policy.
The first problem was the inclusion of two big new coal energy procurements, one in 2023 and one in 2027. As the plan seeks to model the best and least-cost way of producing energy, coal emerges in the mix only due to artificial constraints placed on the amount of renewable energy that can be procured. The inclusion of new coal, therefore, looks like a political nod to trade unions.
The second political move was Mantashe’s refusal to do the most obvious thing at the same time as gazetting the IRP: announce the procurement of new generating capacity. The IRP points out that SA faces a four-year power gap in which the country will not be able to meet its energy needs. As this will necessitate the burning of diesel to keep the lights on, electricity prices will rise further. Other options mooted by the department of energy, such as acquiring a power ship, are even more costly.
The quickest way to get more megawatts onto the grid is to free up the environment for private entities — businesses, farmers and industry — to build their own projects. At the moment, projects of between 1MW and 10MW require licensing. To shortcut this process requires an intervention from Mantashe to amend the Electricity Regulation Act and replace licensing with a streamlined registration process.
Second, Mantashe needs to kick-start the procurement of a new round of renewable energy from independent power producers. Renewable energy is the quickest form of capacity to construct. If this were done urgently, the four-year power gap could be shortened by two years.
But Mantashe, on principle, does not want to be rushed. Asked when he planned the next bid window for projects, the minister scolded the journalist for “running ahead” and wanting to force him into a situation where he must pit renewable energy against coal.
So while the minister has moved the country forward by drawing a road map for the future, actual decisions that would have the effect of bringing more private-sector players into the energy market were just a bridge too far.
The government undoubtedly has a difficult path ahead in negotiating our joint future to a world less dependent on carbon. The people who will be most affected by this transition — mineworkers, power-station employees and the communities that have grown up about these nodes of economic activity — are largely black, poor and vulnerable.
The IRP does take note of the need for a “just transition”, and as a cleaner, less carbon-intense future is in all our interests, that is something society, including business, should strongly support. But the need to coax the unions along on the energy transition is not grounds for Mantashe to hang back from making new announcements to procure energy and free up the market.
A secure energy supply by bringing in new capacity as soon as possible is also in everybody’s interests. It should not be a political matter.