SA’s energy future unpacked
SA’s energy blueprint, the draft integrated resource plan, takes nuclear off the table, but opinion is divided over the inclusion of coal in the mix
The deadline to comment on the draft integrated resource plan (IRP), SA’s energy blueprint, has now passed, after extensive input from various interested parties. Yet the only thing that is clear at this stage is that policymakers have their work cut out for them.
The long-awaited redraft of SA’s energy map into 2030 envisages renewable energy making up 26% of the installed power supply; the largest allocations will be 15% for wind and 10% for solar. Gas power will also be in the mix, expected to account for 16% of installed supply.
Smaller amounts of hydro, pump-storage and concentrated solar power are also included in the draft. But the contentious and costly nuclear build that was driven by former president Jacob Zuma is off the table, for now at least.
Though the IRP finds coal-fired power more costly than other technologies, it caters through policy intervention for projects already in the pipeline. This means coal power will still account for a sizeable 45% of the energy mix in 2030. The projects include the long-delayed Medupi and Kusile coal power stations, as well as 1,000MW planned from independent coal power projects Thabametsi and Khanyisa.
Issues around coal power have elicited strong objections from environmental groups. The Centre for Environmental Rights (CER) described the inclusion in the plan of the coal-driven independent power producers (IPPs) as "unnecessary and harmful".
According to the Energy Research Council at the University of Cape Town, the two are not needed to meet power demand, and will only raise costs and increase carbon emissions. Business Unity SA (Busa) noted that their inclusion will increase the total system cost by R20bn.
The CER said the department of energy is within its rights to withdraw or terminate the coal IPP programme at any time. Meanwhile, pending legal challenges — many launched by the CER — have put the projects at risk of never breaking ground. The centre also proposed that the remaining units of the much-delayed and overbudget Medupi and Kusile power stations be abandoned.
But the Energy Intensive Users Group (EIUG) said it is important to note that SA sits on vast coal resources. "The significant move away from coal in the longer term will be disruptive to the coal value chain. Even the planned decommissioning of the old (12GW) coal power stations will negatively affect the primary energy price as well as the electricity price in the next 10 years."
The National Union of Mineworkers in the Western Cape decried a move away from coal, proposing instead that clean coal technologies be explored so that SA can continue to generate power from coal.
Multinational corporation General Electric also submitted that by retrofitting old power plants with clean coal technology, and ensuring it is part of any new plants built, SA can reduce emissions from power generation. This would minimise the socioeconomic effects of retiring existing coal-fired plants, while continuing to leverage coal as an indigenous resource that is not prone to foreign risks and other externalities.
What it means
The redraft of SA’s energy map envisages renewable energy making up 26% of power supply, with coal power still accounting for 46%
However, the CER said there is no such thing as clean coal. The transition away from coal is unavoidable and job losses will be worsened unless the government puts in place credible plans to support workers and diversify the economy towards labour-intensive sectors.
The renewable energy industry welcomed the IRP’s recognition that green power presents the least-cost scenario, but it raised concerns that the plan does not expect new awards of solar and wind to be deployed to the grid until 2025. It also noted "very high" costs assumed for the grid connection of renewables, while the plan’s assumed cost reduction for renewables until 2050 is "very low".
The EIUG, meanwhile, raised concern that the flexibility of the current fleet to balance renewables is already becoming problematic. This draft IRP does not, it said, take grid stability cost into account.
Many submissions noted the IRP’s scarce detail on gas power, despite it being expected to comprise 16% of the energy mix. Busa and the EIUG, among others, submitted that the completion of the gas utilisation master plan is crucial, as it is the only plan that will clearly state where the gas will come from, and at what cost.
A number of submissions noted that 2,500MW from the Democratic Republic of Congo’s Inga hydropower project is likely to require extensive grid infrastructure development, and the project has faced chronic delays. Project 90 by 2030 said Inga’s inclusion appeared politically motivated, and should be removed.
While the exclusion of a nuclear build in the draft IRP has been broadly welcomed by the energy industry, the Nuclear Industry Association of SA criticised the plan for not being "technology neutral". It also challenged various calculations and assumptions, submitting that in a competitive bidding process nuclear power costs would be substantially lower than those of some more favoured technologies.