Planned nationwide public consultations got under way in Boksburg on Wednesday for the Department of Energy’s (DoE’s) long-awaited draft Integrated Energy Plan (IEP) and updated Integrated Resource Plan (IRP), drawing some industry criticism regarding timelines and an outdated pricing structure.
Industry proponents, which individually unpacked their own contributions to bolster South Africa’s energy plans, seemed to agree that more time was needed to provide sufficient input for the energy development plans moving forward. They also put forward that a realistic demand forecast was required and that the IRP draft’s levelised cost of electricity (LCOE) needed to be based on current trends.
The DoE published the documents for public comment following Cabinet approval in November to allow for public input on the proposed integrated plans. The aim is to ensure that South Africa’s current and future energy needs are met using the “most cost-effective, efficient and socially beneficial” approach, while considering environmental impacts.
The IRP identifies the preferred generation technology and mix required to meet the expected demand growth and the visions of the IEP.
The department highlights the IEP as a guide for future energy infrastructure investments that identifies policy gaps and recommends policy development to shape the future energy landscape of the country.
The IEP includes the stated objectives of ensuring supply security; minimising the cost of energy; promoting job creation and localisation; minimising any potential negative environmental impacts; promoting water conservation; diversifying supply sources and primary sources of energy; promoting energy efficiency in the economy; and increasing access to modern energy.
Meanwhile, the in-force IRP 2010 to 2030 remains the basis for new generation capacity decision until it is replaced by an updated plan. A changed electricity landscape over the past three years dictates further considerations for a policy adjustment, according to the draft IRP update.
Some of these developments include additional capacity that has come online and demand levels that are now lower than previously expected.
Also playing a critical part in the update of the country’s energy plan are new developments in technology and fuel options; the need for carbon mitigation strategies and the impact thereof on electricity supply up to 2050; and the affordability of electricity and its impact on demand and supply.
Presenting its IRP assumptions and base case on Wednesday, the DoE indicated that the considered scenarios included a carbon budget; the primary fuel-price tipping point for coal, gas and nuclear; a lower demand trajectory; State-owned power utility Eskom’s low plant performance; regional hydropower and gas options; embedded generation; enhanced energy efficiency; unconstrained renewable energy; indigenous gas; and new storage technology, among other scenarios.
Stakeholders have until February 15 to provide input on the plan, which forecasts a yearly average energy growth rate of 2.17% and proposes an energy mix allocation of 17 600 MW for solar photovoltaic (PV), 37 300 MW for wind, 20 385 MW for nuclear, 13 332 MW for open-cycle gas turbine (OCGT), 21 960 MW for combined-cycle gas turbine (CCGT) and 15 000 MW for coal between 2020 and 2050.
The DoE’s suggested base case, or starting point, shows the commissioning of new capacity by 2022, with initial capacity emerging from a combination of PV, wind and gas.
New baseload commissioning would be “highly linked” to Eskom’s plant retirement schedule and conventional baseload commissioning is expected by 2028.
By 2037, nuclear infrastructure will be commissioned, with the first units coming on line in the early 2020s, while around 1 000 MW of hydropower will be available by 2030.
DoE deputy director-general Ompi Aphane assured that there was no cemented conclusion on the roles or spread of nuclear or renewable energy, with the department intending to absorb all public comments to develop sustainable energy plans aimed at guiding the country over the next three decades.
The public consultation process will provide a platform for more than 15 stakeholders to raise their preliminary views on the contents of the documents and the proposed energy plans until 2050. However, the common stance among stakeholders is that the February 15 deadline for public submissions is too soon and the pricing structure used to develop the base case is significantly outdated.
Speaking at Wednesday’s public consultation, the Energy Intensive User Group’s Jarredine Morris argued that the draft required more time for “proper” consideration and enhanced public consultation. She suggested a deadline, rather, of March 31, 2017, a view that was shared by the South African Renewable Energy Council and the South African Independent Power Producers Association.
She further noted that the 2.2% growth forecast was “optimistic”, with Eskom’s predictions of between 0.4% and 1.8% a more likely outcome.
“There must be scenarios with updated sensitivities, including a realistic demand forecast and . . . unconstrained renewables,” Morris told stakeholders.
Meanwhile, the draft’s limit on renewable energy also concerned industry participants at the discussion on Wednesday.
Council for Scientific and Industrial Research (CSIR) head of energy research Dr Tobias Bischof-Niemz noted that the limit was drawn with no technical explanation of the constrained build capacity assumptions applied to renewable energy, particular solar PV and wind.
He also pointed out that the updated IRP assumed a similar LCOE for new baseload coal, solar PV and wind, whereas the tariffs of the latter two were, in actuality, some 40% cheaper than that of coal.
This followed on presentations by representatives at Bushveld Energy and Brightsource, who also questioned the 2016 IRP draft’s LCOE.
Bushveld believed the LCOE used within the draft was about 60% of the actual prices, while Brightsource suggested that the input assumptions were dated and the draft did not reflect the latest expedited bid round concentrated solar power (CSP) costs, CSP learning rates and liquefied natural gas prices for CCGT and OCGT.
These stakeholders highlighted that input assumptions for CSP needed to be updated, while the gas assumptions could be underestimating CCGT and OCGT levelised costs.
In addition, Spanish firm Abengoa, also presenting on Wednesday, punted the benefits of CSP and the ease at which it could be dispatched, suggesting a minimum of a 1 000 MW allocation for CSP.
Meanwhile, the Paper Manufacturers Association of South Africa (Pamsa) said it was dismayed at the complete omission of cogeneration, which would have negative unintended consequences, particularly for licensing.
In the absence of an allocation for or “even a mention” of cogeneration, the industry could not comply with the licensing requirements of IRP compliance, said Pamsa.
The association further asserted that cogeneration was energy efficient, produced a reduction in greenhouse-gas emissions, saved fuel and reduced transmission and distribution losses, compared with energy derived from the national grid.
The DoE nationwide IRP assumption and base case public consultations will continue till next week.