The publication in November last year by the Department of Energy of a draft revision to the Integrated Resource Plan (IRP) for electricity was very welcome, if overdue. The electricity crisis has, to some extent, woken the country up to the reality that economies cannot function without adequate amounts of affordable energy, and the concomitant need to plan our energy future. Also welcome is the active debate taking place over the revised IRP, involving independent analysts, industry players, government officials and other stakeholders.
The main themes that are receiving considerable attention are the revised (lower) demand projections (which are more realistic than before), the uncertain future roles of nuclear power and gas, and changes in the relative mix of renewable-energy technologies. These are all important issues, and the debate is a necessary and useful part of crafting a sensible energy investment programme for our country. Nevertheless, there are several glaring omissions from these discussions.
First of all, the revised IRP and much of the surrounding discussion make little or no mention of a fundamental physical variable that underpins the economic viability of different energy sources, at least in the long run. This is the energy return on (energy) investment (EROI) ratio – that is, the amount of energy delivered by a process relative to the amount of energy used to capture or produce the energy source. Clearly, we want to base our economy on sources of energy with high EROI ratios, otherwise too large a portion of the energy supply will have to be used merely to produce and deliver energy to other sectors of the economy.
International EROI estimates are available for most energy carriers, but some of these vary greatly, depending on local conditions. Without reliable local EROI estimates for the various energy sources and technologies, our country is driving blindly into an uncertain future.
Secondly, insufficient attention is being paid to improving energy efficiency, which should be a cornerstone of the IRP. International research clearly shows that it is usually cheaper – and better for the environment – to conserve power through improving efficiency than to build new generation capacity. South African businesses and consumers have made good strides in reducing waste, but there remains enormous potential for energy savings.
The third issue is the type of energy system that is assumed to be most desirable for the long term. Most commentators are still focused on conventional, large-scale grid-connected power stations – the main difference of opinion being the favoured source or sources of energy, such as coal, gas, uranium, solar and wind. There is very little discussion about the potential for an ‘energy revolution’ that sees a fundamental shift in favour of small-scale, decentralised energy production that is networked in smart grids – as described, for instance by, Jeremy Rifkin in his book, The Third Industrial Revolution.
As a corollary to the above, the IRP makes no explicit provision for a possible revolution in transport that sees electric drivetrains progressively replace internal-combustion engines. A wholesale shift over the next few decades to private electric (and plug-in hybrid) vehicles, electrified mass transit and electrified freight rail would have significant implications for power demand. Battery electric cars could also provide storage capacity for renewable electricity.
This, in turn, leads to another omission from the IRP debate, which is the integration of electricity planning with planning for other energy carriers – particularly liquid fuels. With petrol and diesel prices on a seemingly relentless upward trend, and with global peak oil lurking on the horizon, there is a danger of a liquid fuels crisis arising at some point and impacting on the electricitytrajectory. The IRP should live up to its name in terms of integrating planning for the use and provision of various energy resources.
Yet another aspect of energy transitions which deserves a more central role in discussions around the IRP is the potential for job creation in the energy sector and downstream industries. With stubbornly high unemployment levels, our country desperately needs to use the massive pipeline of energy investments to catalyse local, labour-intensive industries – not to import hugely expensive foreign plant and equipment.
Beyond these issues, there are several possible ‘wild card’ factors that could bring about sea changes in the global energy landscape, with major implications for our own energy situation. These possibilities include a turn of the tide against fracking owing to high costs and unacceptable health and environmental risks, marked acceleration of climate change and the commercialisation of a disruptive technology, say, perhaps, low-energy nuclear reactors.
The possibility of one or more of these major disturbances occurring within the next couple of decades underscores the importance of regular revisions to the IRP. As in the present case, input and deliberation from all sectors of society is a necessary part of that process, as is breadth of vision.