Energy Minister Jeff Radebe listed the finalisation of the Integrated Resource Plan (IRP) for electricity as South Africa’s main energy priority and indicated on Tuesday that the policy should be approved in March.
Speaking on the sidelines of the 2019 edition of Africa Energy Indaba he said he would be meeting the business and labour constituencies at the National Economic Development and Labour Council on March 5 and expected the IRP to be finalised soon thereafter.
During an earlier panel discussion, Radebe also made reference to the high cost of the renewable-energy projects procured during the first two bid windows of the Renewable Energy Independent Power Producer Procurement Programme.
However, he refused in an interview to be drawn on whether Public Enterprises Minister Pravin Gordhan’s recent suggestion that the power purchase agreements be renegotiated represented official government policy.
“I will be addressing a media conference . . . about the IPPs as a whole,” he said, indicating that the briefing could take place as early as Thursday.
The Minister's participation at the Indaba took place against the backdrop of a recent return to load-shedding across the country, precipitated by the underperformance of Eskom’s coal fleet and the units in commercial operation at Medupi and Kusile.
NEED FOR NEW INVESTMENT
Radebe said the deterioration in Eskom’s plant performance had confirmed that South Africa was in need of more investment in new generation capacity to replace the old power plants. “This happens at a time when Eskom’s balance sheet is at its weakest in a long time.”
The power sector, Radebe argued, was well positioned to leverage investment in line with President Cyril Ramaphosa’s call for the private sector to collaborate with government to secure $100-billion worth of new investments over the coming four years.
The IRP, which had not been updated since 2011, would provide certainty on the future mix of generation technologies required to ensure security of supply.
Radebe also used the platform to underline the continued role of coal in South Africa’s energy mix and to appeal for the timing of the transition to a low-carbon economy to be sensitive to the potential impacts on jobs and local economies.
Nevertheless, he described the green economy as a “game changer” for South Africa, with renewable-energy investments worth R250-billion having been made since 2011.
Radebe also stressed that renewables costs in South Africa had reduced materially subsequent to the first auctions in 2011 and 2012.
The falling cost of wind and solar photovoltaic (PV) technologies was also highlighted by World Energy Council (WEC) secretary-general Dr Christoph Frei, who released the ‘World Energy Issues Monitor 2019' at the Africa Energy Indaba.
Frei said the cost decreases had continued over the past year, with the tariffs for some solar PV projects falling to below US 2c/kWh.
The changing cost profile of renewables, together with the trends of decentralisation, digitalisation and decarbonisation, had major implications for the way electricity markets were designed and functioned.
Frei said it had also brought to the fore new themes, such as electrification and sector coupling, as countries moved to deploy cleaner electricity to decarbonise other sectors, such as heating and mobility.
Digitalisation was also making it possible to shape and shift power demand, with a WEC study indicating that as much as 5% of peak demand could be shaved by using technology to shifting the load associated with domestic refrigeration during high-demand period.
“If we can, through digitalisation, shift those fridges out of peak demand you would have created a massive battery.”