Organisations raise objections to the draft IRP

17th October 2018

By: Kim Cloete

Creamer Media Correspondent

     

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Industry bodies and organisations have welcomed aspects of the draft Integrated Resource Plan 2018 but have also raised concerns during public hearings held in Parliament on Wednesday.

They are hoping that their suggestions will be included in a final plan for South Africa’s energy future.

The Nuclear Industry Association of South Africa (Niasa) has disputed the IRP’s method of defining the costs of energy. Speaking on behalf of Niasa, Dr Anthonie Cilliers said nuclear becomes cumulatively cheaper than wind and solar over time, but this is not reflected in the IRP.

Niasa has called on the Department of Energy to issue a request for proposals (RFP) from nuclear vendors to determine the correct costs of nuclear.

Cilliers said this would help to reflect the fully indexed power purchase agreement prices for wind and solar photovoltaic and the calculated costs discounted over time for nuclear and other energy sources.

Niasa said the draft IRP 2018 does not compare costs between various technologies on an even playing field.

“The plan fails to meet the least-cost planning objectives as it ignores all costs associated with the socioeconomics of various options, as well as the transition costs. It does not judge all energy sources on the same merit. It does not even attempt to do that,” said Cilliers in his presentation.

He argued that a nuclear power plant would last for 60 years, while wind and solar plants would have to be recapitalised every 20 years.

“Rather than being technology neutral, it appears the plan has been developed with certain policy outcomes in mind with the least-cost planning method used as a tool to achieve this.”

Leading members of the South African Young Nuclear Professionals Society also made a case for nuclear, saying security of energy supply was essential. They also pointed out that there were many South Africans who had specialised in studies in nuclear energy at Master’s and PhD level in South African universities, as well as at universities in China, South Korea and Russia.

“Where do you expect us to go if you are closing the industry? We need robust development and sustainable jobs. As policymakers, you need to recognise our industry.”

Meanwhile, Business Unity South Africa (Busa) said it was concerned about the delays and cost overruns in the Eskom New Build Projects. It called for contingency scenarios to be modelled if the remaining Medupi and Kusile units are commissioned earlier or later than assumed, or if a decision is made not to complete the remaining units of these stations.

Busa suggested that the IRP be reviewed every two years to accommodate the pace of change in the energy space.  “Planning and building flexibility is required to ensure that we are not left with stranded assets. The pace and scale of all additional megawatts must also be considered carefully in line with potential variation in demand.”

The suggestion for a two-year review was echoed in various presentations.

Busa further said emissions from electricity generation accounted for over 40% of South Africa’s emissions. “It therefore makes sense that emissions from this sector are drastically reduced. The organisation believes the best instrument to reduce emissions in this sector is the IRP.”

It has also called for urgent confirmation on the Gas Utilisation Master Plan. “This is the only plan that will clearly state where the gas will come from as well as [what] the costs [will be].”

The Energy Intensive Users Group of Southern Africa (EIUG), meanwhile, said it supported the need for further studies to improve IRP modelling and assumptions.

“Historic data is not the answer to forecasting in a period of change. Extensive groundwork is required when information from every sector needs to be collected on each sector’s future requirements for electricity.”

The EIUG suggested that it would be useful to provide for known changes in the industrial sector, such as planned investments, the closure of platinum group metals mines, the closure of smelters and the long-term decline in gold mining.

The group said it was committed to working with government and other stakeholders to ensure South Africa has an energy industry that provides a reliable supply of acceptable quality at competitive prices.

“Despite vulnerabilities to electricity pricing, EIUG members are deeply invested in the economic wellbeing of this country.”

Members of the EIUG include energy intensive consumers from the mining, minerals beneficiation, materials manufacturing, logistics and water industries.

Edited by Creamer Media Reporter

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