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Electricity-mix model shows South Africa won’t need to trade off clean for low-cost

CSIR Energy Centre head Dr Tobias Bischof-Niemz

Photo by Duane Daws

23rd February 2017

By: Terence Creamer

Creamer Media Editor

     

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CSIR's Energy Mix 2.0: The Potential for a New Paradigm  (7.68 MB)

The steep decline in wind and solar photovoltaic (PV) costs means that South Africa will not need to make the traditional trade-off between investing in either clean or least-cost electricity production, as the “cost-optimal mix” for South Africa is now also the cleanest, research conducted by the Council for Scientific and Industrial Research (CSIR) Energy Centre shows.

The techno-economic model run by the CSIR employs the same assumptions used by the Department of Energy (DoE) to produce the draft Integrated Resource Plan (IRP) Base Case, which was published for public comment in November. However, it lifts the yearly limits placed on the amount of wind (1 600 MW) and solar PV  (1 000 MW) that can be introduced and uses the 62c/kWh prices achieved in the most recent bid-window of South Africa’s renewables procurement programme.

The outcome, CSIR Energy Centre head Dr Tobias Bischof-Niemz reports, is a “least-cost” energy-mix that is not only more than R80-billion-a-year cheaper than the Base Case, but also produces 130-million tons less carbon dioxide emissions and consumes 29-billion litres less water yearly.

Speaking at a South African National Energy Association event in Johannesburg, Bischof-Niemz said the model found the least-cost mix to deliver the 525 TWh-a-year assumed by 2050 comprised more than 70% solar PV and wind, backed by gas, hydro and a small amount of coal-fired capacity. The model, which is generated using the same Plexos software employed by the DoE, has no nuclear, compared with 32%, or the 165 TWh a year, in the draft IRP Base Case.

The model has been developed in response to calls for comment on the draft IRP and will be packaged into a written submission ahead of the DoE’s March 31 deadline for public comment.

The CSIR has refrained from deviating from the other IRP inputs and justifies the deviation from the solar PV and wind restrictions on the basis that no other technologies have been constrained, as well as the fact that the DoE has offered no techno-economic justification for the restriction. In any event, it also argues that the Base Case should, in fact, be the least-cost mix so as to make transparent the economic and social costs and benefits of any policy-driven deviation.

In addition, the CSIR questions the Base Case’s logic for keeping the constraints on solar PV and wind constant until 2050, which will result in the relative contribution of these two renewables sources shrinking as the power system grows.

Such a scenario is at odds with the global trend towards higher total and relative contributions of wind and solar PV in country mixes. In 2016, 124 GW of new wind and solar PV capacity was installed worldwide, as both technologies transitioned from being heavily subsidised to being cost competitive. In South Africa, the cost of wind has fallen by 59% since the first capacity was procured in 2011, while the cost of solar PV has fallen 83% over the same period.

Bischof-Niemz also dismisses the argument that the two variable sources of supply – which only generate either when the wind is blowing or the sun is shining – should be restricted on the basis of their potential to destabilise the grid. “Both leading and follower countries are installing more new solar PV capacity a year than South Africa’s IRP limits for 2030 or 2050. In fact, solar PV penetration in leading countries, such as Germany, Spain and Italy, is today 2.5 times that of South Africa’s Base Case for the year 2050.”

The penetration for wind in leading countries such as Germany, Spain and Ireland meanwhile is more than 1.7 times that of South Africa’s Base Case for the year 2050.

The added benefit for South Africa is the higher capacity factors being achieved on its wind and solar PV plants relative to those in many of these countries. However, the variability of wind and solar PV will not only require flexible back-up, predominantly in the form of gas and pumped storage, but would also require a far larger installed based, when compared with that assumed in the Base Case.

Under the Base Case, which is effectively divided three ways between coal, nuclear and renewables, a total of 135 GW would need to be installed by 2050, whereas the least-cost model assumes that 237 GW would be required to meet assumed yearly demand of around 522 TWh.

Bischof-Niemz dismisses arguments that land would be a constraint to such a renewables-intensive deployment, noting that technically the potential within the designated Renewable Energy Development Zones alone is 1 782 GW of solar PV and 535 GW of wind. The least-cost model calls for 73 GW of solar PV and 93 GW of wind by 2050, compared with 16 GW and 30 GW respectively in the Base Case.

“Our conclusion is that it is cost-optimal to aim for greater than a 70% renewable-energy share by 2050 and that clean and least-cost is not a trade-off anymore – South Africa can de-carbonise its electricity sector at negative carbon-avoidance cost.”

Edited by Creamer Media Reporter

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