South Africa’s future energy mix: submit your comments by 31 March 2017

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[av_heading tag=’h3′ padding=’10’ heading=’The Department of Energy is in the process of updating the Integrated Resource Plan (IRP) 2010-30 and the related Integrated Energy Plan (IEP). These plans will provide a roadmap of the future energy landscape for South Africa and guide future energy infrastructure investments and policy development. It is a critical excercise that will determine spending priorities over the next 20 years.’ color=” style=’blockquote modern-quote modern-centered’ custom_font=” size=” subheading_active=” subheading_size=’15’ custom_class=”][/av_heading]

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[av_button label=’SUBMIT YOUR COMMENTS TO DoE BEFORE 31 MARCH 2017!’ link=’manually,[email protected]’ link_target=’_blank’ size=’x-large’ position=’center’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ color=’custom’ custom_bg=’#424242′ custom_font=’#ed9600′]

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The purpose of the Integrated Energy Plan (IEP) is to provide a roadmap of the future energy landscape for South Africa which guides future energy infrastructure investments and policy development. The IEP analyses current energy consumption trends within different sectors of the economy (i.e. agriculture, commerce, industry, residential and transport) and uses this to project future energy requirements, based on different scenarios.

The Integrated Resource Plan (IRP) serves to identify the preferred generation technology required to meet expected demand growth up in South Africa to 2050, and outlines the proposed generation of new build in that period. It is meant to be a “living plan”.
Since the promulgation of the IRP 2010-2030, there have been a number of developments in the energy sector in South Africa, not only from the supply side but also in terms of the electricity demand outlook has changed that was forecast in 2010. These changes motivate the need for a long overdue update of the IRP.

This roadmap is critical because, in planning the country’s energy path, the IRP ought to ensure energy affordability to its citizens, many of whom still do not have access to what many of us take for granted. Affordable electricity is a critical lever for economic progression. New electricity generation capacity must be planned and provided at least cost, while meeting existing ministerial determinations and contractual commitments for any existing new-build, as well as government’s policy objectives – including universal access to electricity, economic growth and jobs, environmental compliance and sustainability, and increasing the diversity of both primary energy sources and generators within the electricity supply industry in order to manage risk.
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The Department of Energy (DoE) has published an IEP draft report as well as IRP Assumptions and Base Case for the public to consider and comment on by 31st March 2017.

Comments received will be considered in preparing a draft final IRP update which will be submitted to Cabinet for approval.
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[av_button label=’READ THE ACRP COMMENTS’ link=’manually,http://climatereality.co.za/wp-content/uploads/2017/03/IEP-IRP_Main_comments_demands_ACRP.pdf’ link_target=’_blank’ size=’x-large’ position=’center’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ color=’custom’ custom_bg=’#424242′ custom_font=’#ed9600′]

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Considering the numerous flaws in both the content and the public consultation process tThe African Climate Reality Project fears that DoE might just be window dressing a planning process that leaves a lot to be desired in terms of rationality and transparency, and that these comments may very well not be taken into account.

Nonetheless, we feel it remains crucial to engage actively and massively in the shaping of South Africa’s future energy strategy, as it will have irreversible economic, social and environmental effects. It shouldn’t be taken lightly, especially as recent events – cf. the Public Protector’s State Capture report – confirm that we cannot blindly trust the current government to always have the country’s best social, economic and environmental interests at heart. Meaningful public participation would contribute to more accountability on the part of government.

The document presented by DoE is not the final IRP, and it is only through meaningful public participation, as part of the democratic process, that citizens’ needs can be taken into account. South Africans are encouraged to send a clear message to government that trying to tie the country to expensive nuclear for the foreseeable future, when there are other, safer and more inclusive solutions available is breach of their constitutional rights.

If things come to worse, we need to have a clear articulation of requests for remedial action.
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We invite you to comment on the Draft IEP Report (download here) and the IRP Assumptions and the Base Case (download here) by submitting your inputs in writing to the Department of Energy by addressing them to [email protected].

These documents are quite long and complex. Feel free to us the comments and recommendations that we’ve compiled!
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[av_heading tag=’h3′ padding=’10’ heading=’Main comments, demands and recommendations of the African Climate Reality Project’ color=” style=’blockquote modern-quote’ custom_font=” size=” subheading_active=” subheading_size=’15’ custom_class=”][/av_heading]

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Open in PDF.
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Comments:

  • In the IEP, the issue of climate change is relegated to one indicator of environmental performance. This is grossly insufficient considering the current and near-future climate change patterns as well as the urgency – which SA recognised by ratifying the Paris Agreement – to radically shift our energy sector to low-carbon, sustainable generation sources.
  • Impacts on communities and livelihoods are very poorly considered in the IEP, especially in relation to the actual job potential of the various generation technologies as well as their contribution improving electricity access to remote / rural / disadvantaged communities.
  • The Ministerial Advisory Committee on Energy appointed by Minister Tina Joemat-Pettersson recommended a general planning methodology in which the base-case scenario for the IRP should be unconstrained, least-cost and use correct and up-to-date technology costs, thus allowing to establish the associated cost of the energy technology mix by 2050. On a number of assumptions and costs, the draft IRP 2016 proposed by DoE doesn’t follow this recommendation.
  • When modelling the energy demand, DoE assumes a growth rate of 2.4% from 2017 and for the next 20 years. Such a growth in industry would indeed mean increased electricity demand. But South Africa’s GDP growth rate was of 0.9% in 2016. There are no reasonable grounds for forecasting a spike at 2.4%.
  • DoE confirmed that CO2 emissions in the transport sector are uncapped in the model. DoE argues that such a constraint would be hard to implement. Yet this could be achieved through voluntary policies on low-carbon transport.
    One consequence of this assumption is that the model used by DoE doesn’t pick up electric cars in the demand projections for the transport sector; only petrol / diesel vehicles appear in the scenario based on “cost-efficiency”. One fails to understand how this is compatible with the urgency to significantly curb carbon emissions, but also how this takes into consideration the rapid development of the electric vehicle market.
  • The solar PV and wind technology costs presented in the Draft IRP2016 are higher than up-to-date, levelised costs of electricity (LCOE) calculations and contracted prices for solar PV and wind power in South Africa.
    The price basis used in the Draft IRP2016 are R0.93/kWh for solar PV and R0.81/kWh for wind. Updated costs presented by CSIR based on the bid Widow 4 Expedited Round for both solar PV and wind are at R0.62/kWh. That price has already been adjusted to April 2016 rands, and includes owner’s development costs and shallow grid connection costs.
  • Unrealistically low prices are being assumed for nuclear. DoE assumes a levelised cost for nuclear at R0,97 per kWh, based on EPRI estimates and outdated exchange rate that date back to January 2015. CSIR estimate is at R1,17/kWh (2016 study) under most optimistic “IPP PPA tariff equivalent” assumption.
  • Nuclear is factored in the model as a given, which DoE denies at times despite evidence, or justifies by the fact that nuclear commitments were made in the IRP 2010 and policy decisions have already been made to that effect that must be followed. We argue that nuclear would lock the country for 60 years and is not the most cost-effective option.
  • In its assumptions, DoE applied constraints on the renewable energy build capacity over the next 30 years. I.e. the amount of wind and solar PV capacity that the model is allowed to build per year is limited. This not technically/economically justified in the plan. This comment was also made by CSIR. The argument that the grid is not adapted and flexible enough to accommodate more than a certain amount of renewable energy doesn’t hold water: upgrading to a smart grid should be considered as a long-term investment.
    It is quite obvious that the artificial constraints on solar PV and wind capacity every year in the Draft IRP2016 base-case is a political decision rather than a rational planning decision, to force 20 GW of nuclear power into the mix, even though only from 2037 onwards.
  • Large-scale nuclear and big coal-fired power generation projects are notorious for very significant cost and time overruns. They would also commit South Africa to the specific technologies and vendor countries for the next 40 to 100 years. RE on the other hand would allow SA to adjust the supply to the evolving demand rapidly and at least cost.
  • Generally, the DoE base case scenario is rooted in the base-load theory which says that without base-load, the electricity system would collapse. DoE gives no consideration whatsoever to variable energy systems implemented successfully elsewhere.

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Main demands & recommendations:

  • Finalise the IEP first and suspend IRP until IEP process is complete
  • Conduct a meaningful public engagement process. Allow the public to engage again after policy adjustments are made, with full disclosure on the results of the other scenarios that will be run.
  • The IEP process must adopt lowest cost scenario as base case. In this uncertain environment, it would be prudent to plan for flexibility, and not commit South Africa to expensive and inflexible energy generation technologies.
  • The IRP should not constrain any technology, particularly not Renewable Energy.
  • Low-carbon transport constraints should be factored in the transport sector demand model. The cap on electric vehicles (20% in proposed base case) should be revised to reflect the projected market growth and local uptake by 2050.
  • The costing assumptions for all generation technologies envisaged in the energy mix should be revised and substantiated in a publicly disclosed report. The base case should be modelised using the latest updated costs for solar PV and wind.
  • The alternative for the electricity supply industry and Eskom should be to focus on more, smaller and flexible generation plants, with well-known and declining deployment costs, that can be constructed faster – like solar PV and wind power in combination with mid-merit CCGT and OCGT gas plant, pumped storage and other emerging energy storage options for peaking capacity.
  • Considering the dissent around the necessity of nuclear in our future energy system, and ongoing court action, DOE must instruct Eskom to put the RFP for nuclear on hold until a final IRP is Even if the current plan is maintained, it foresees nuclear new capacity only from 2037, with a lead time of about 10 years. There is no reason for starting procurement in 2017, especially if future updates of the IRP until 2027 come to reduce the proposed share of nuclear in the energy mix.
  • The IRP should consider investments to unlock the bottlenecks on grid access and to upgrade the grid infrastructure so that it fully accommodates renewable energy. Modern electricity grids are now able to receive, manage and distribute currents from different sources in different geographic locations. It would be cheaper than the additional costs induced by higher-cost generation technologies.
  • Each IEP scenario should also present socio-economic impact on jobs (losses and gains).

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