As the Department of Energy (DoE) moves to revise South Africa’s Integrated Resource Plan (IRP) for electricity and finalise a larger Integrated Energy Plan to 2050, some are calling for South Africa’s electricity planning and investment paradigm to be overhauled, while others are calling for greater urgency to be shown in decision-making processes. Most observers agree that there is a need for a far more responsive process – one that would enable the country to adapt to changing circumstances, including changes to the demand trajectory.

For his part, Eskom CEO Brian Dames has reiterated the need for decisions to be made on the introduction of new capacity after 2020, by which time the Medupi and Kusile coal-fired power stations should be fully integrated into the network. He says it is still far from certain as to which generation projects will be pursued thereafter, and warns that decisions should not again be made too late.

Dames indicates that various options remain open, including a third new coal-fired power station, as well as a smaller nuclear roll-out than the 9 600 MW fleet proposal included in the current version of the current IRP. But he also agrees with those who suggest that the introduction of gas could be a “game changer”.

The South African Independent Power Producers Association’s Doug Kuni has also expressed frustration, stating that, while there is general recognition of the negative economic consequences of South Africa’s current electricity shortages, “it is difficult to see any display of urgency” in dealing with the constraints to new investment.

Kuni describes the progress made by the DoE in the procurement of renewable energy as impressive, but notes that there has been far less progress in the procurement of baseload capacity from independent power producers (IPP).

Former Energy Minister Dipuo Peters promulgated ‘determinations’ in December last year, opening the way for the procurement, by 2020, of a further 3 500 MW of renewables over and above the 3 725 MW currently being procured, as well as 2 500 MW of IPP coal, 2 600 MW of IPP gas and 2 600 MW of imported hydro.

However, Kuni is not optimistic that the request for proposals for the baseload IPPs will be issued during 2013 and says that it could be years before the projects reach financial close, and many more years before construction is completed.

University of Cape Town Graduate School of Business professor Anton Eberhard, who is also a member of the National Planning Commission, is as strident in his appeal for decisions and for reform.

He says it is “potentially disastrous” for the economy to rely on outdated data and on plans that rely heavily on large, capital-intensive multiyear investment programmes, particularly in a context of uncertainty around future demand and costs.

The IRP, he argues, provides a “useful base”, but a more dynamic planning system is required to ensure that the plan is “continually updated”. In future, the IRP should be indicative, rather than the prevailing situation, whereby the regulator could only license a new power generation plant if the Minister has made a ‘determination’ in terms of the IRP.

Besides overhauling the planning mecha- nisms, Eberhard argues that there is a need to “translate planning scenarios, in a less dirigiste manner, into investment decisions”.

He describes the powers currently vested in the Energy Minister as being unrealistically ambitious. “South Africa is an open economy with a diversity of entrepreneurs and investors who no doubt see a myriad of options around new power. The Minister cannot possibly see all of these options and opportunities; space needs to be created around market-generated power options.”