Picture: ISTOCK
Picture: ISTOCK

There is no single, quick-fix solution to SA’s electricity woes. But SA could have cheaper, cleaner and more reliable electricity (and fulfil its climate-change commitments) if it swaps to renewable energy sooner rather than later.

This is the main finding of a new SA-TIED (Southern Africa — Towards Inclusive Economic Development) study undertaken by the University of Cape Town’s Energy Research Centre (ERC), which provides an alternative assessment of the country’s future energy needs to the government’s draft Integrated Resource Plan (IRP 2019).

The ERC study finds that to fulfil its climate-change commitments, SA will have to phase out coal-fired power by 2040. However, it should be able to do so without a negative impact on the economy. In fact, the researchers believe SA can afford to be more ambitious in its climate-mitigation policy.

One of the study’s key critiques of the draft IRP 2019 is that it doesn’t adequately address the central problem of climate-change mitigation, even though the electricity sector accounts for more than 40% of SA’s emissions.

The study aims to stoke debate on the IRP 2019. "Such debates are critical given the rolling electricity blackouts facing the country," says the ERC in a statement.

"The need for clean energy solutions has also been reinforced by the devastating impact of Cyclone Idai, which struck parts of Southern Africa. This tragedy once again highlights that any future economic and energy-planning scenarios must account for climate-change mitigation efforts."

The draft IRP 2019 places artificial annual constraints on renewable energy of 1,600MW per year for wind power and 1,000MW per year for solar. Energy experts say this will force 1,500MW of new coal power into SA’s energy mix by 2030. Though the IRP also extends the life of the Koeberg nuclear power plant, it doesn’t envisage any new nuclear power plants being built up to 2030.

Picture: 123RF/Vaclav Volrab
Picture: 123RF/Vaclav Volrab

The ERC study argues that no new coal or nuclear power plants should feature in SA’s electricity future, as this would require subsidies from consumers. Rather, it urges SA to adopt a vibrant energy mix, not only to save money, but also to meet the country’s carbon-emission targets.

It finds that SA’s future energy supply should come primarily from wind and solar photovoltaics since renewable energy, combined with flexible generation or storage, will provide the least-cost solution for the electricity sector.

However, this would require that SA pursue a large-scale procurement programme for battery technology to provide storage for variable renewable energy. It also finds that retrofitting Eskom’s coal-fired power stations for compliance with minimum emission standards rather than retiring them is, for the most part, the least-cost option for the electricity sector.

It proposes that the government considers suspending compliance requirements for the least-polluting power stations, providing that Eskom agrees to retire the worst-polluting stations by 2030, at the latest. For the remainder of the fleet, Eskom should commence retrofitting the stations for compliance subject to ongoing cost assessments of each station on a case-by-case basis.

The ERC report coincides with a recent US study which finds that thanks to technological advances, the cost of producing renewable energy has plummeted to the point where the power generated by fossil fuels now costs more than solar or wind-generated power in the US. "We are at the ‘coal crossover’ point in many parts of America," the report’s co-author Mike O’Boyle told UK newspaper The Guardian. "Even without a major policy shift we will continue to see coal retire pretty rapidly."

SA was nudged further towards embracing renewable energy this week by the New Development Bank (NDB, the Brics Bank), which has been holding its fourth annual meeting in Cape Town.

Two of the three new loans the NDB approved for SA are in line with its focus on supporting clean energy. In the larger of the two, R1.1bn will be provided to the Industrial Development Corp (IDC) to provide attractive long-term financing for private renewable energy projects. The IDC will on-lend the money to renewable energy projects that contribute to the reduction in carbon dioxide emissions, improve SA’s energy-sector mix and increase the energy efficiency of the economy.

The bank says the intention is that the project’s implementation will lead to more than 500GWh of electricity being generated annually from renewable sources in SA, leading to savings in CO² emissions by around 480,000t.

The second loan, of R6.8bn, will go to Eskom to finance retrofitting flue-gas desulfurisation equipment to make the Medupi power plant compliant with new environmental standards coming into force.

The NDB will also provide R3.2bn to the Trans-Caledon Tunnel Authority for phase 2 of the Lesotho Highlands Water Project. The project will increase the yield of the Vaal River system by almost 15%, improving the water supply to Gauteng, North West, Mpumalanga and the Free State.

SA-TIED is a collaboration between local and international research institutes and the SA government — but the research produced does not constitute a government policy position.