Business Unity South Africa (Busa) expressed concern on Thursday about a seeming lack of alignment between government and Eskom on the nuclear component of the newly released draft base case of the Integrated Resource Plan (IRP).

In a statement welcoming the Department of Energy’s (DoE’s) announcement of a public consultation process for the IRP, as well as the broader Integrated Energy Plan (IEP), Busa recommended that any procurement of large-scale generation commence only after finalisation of the IRP as the national plan.

Busa also welcomed the delay in the commissioning of additional nuclear power to 2037, suggesting that “this will allow for a more detailed investigation into the feasibility and affordability of nuclear power, before a final decision is made”.

The DoE indicated that the public consultation process would involve provincial road shows in December and January and would include consultations with business and labour at the National Economic Development and Labour Council.

The IRP base case was also described by the DoE as a “starting point”, with the final plan to be promulgated only after public consultations and a policy-adjustment process within government. The department indicated that promulgation would take place after Cabinet approval in around April next year.

Nevertheless, Eskom head of generation Matshela Koko indicated that the State-owned utility planned to issue a nuclear request for proposals (RFP) before the end of 2016.

Koko justified the urgency of testing the market through the RFP on the basis of a “sample scenario”, which indicated that the first new nuclear capacity could be required by 2026. He stressed, too, that testing the market did not equate to signing a contract for nuclear.

The scenario selected by Koko is premised on environment whereby the base case is adjusted by replacing the current peak-plateau-decline carbon emission reduction plan with more stringent carbon budgets, while “constraining” the yearly allocation of wind and solar photovoltaic (PV). Under the sample, a total of 25 821 MW of new nuclear is required by 2050, with the first reactors to be introduced in 2026.

By contrast, the draft IRP base case, which also constrains renewables, suggests that the first 1 359 MW of new nuclear would only be required in 2037, rising to 20 385 MW by 2050.

The DoE indicated that it had conducted at least 12 sample scenarios that make adjustments to the base case, including a so-called “unconstrained renewables” scenario, under which wind and solar PV rise in the 2050 mix from 55 000 MW in the base case to 156 160 MW, while nuclear falls to 5 436 MW, with the first reactor required only in 2037.

ARTIFICIAL RENEWABLES CONSTRAINT
Beside its disquiet over this nuclear misalignment, Busa also expressed concerned that challenges facing renewables projects in gaining access to the grid appear to be being used as “an artificial constraint on renewable energy sources”.

“Busa believes that the role of Eskom, particularly in respect of its position as the sole purchaser of electricity, needs to be clearly defined.  Additionally, Eskom’s role as the developer of new generation capacity should not proceed independently of the IRP, which is only expected to be finalised in the third quarter of next year.”

For this reason, Busa recommends any procurement of large-scale generation “commence only after finalisation of the IRP as the national plan”.

However, the business body said it looked forward to the official publication of the IEP and IRP assumptions, as well as the base case scenarios, which would “allow for a more comprehensive review” by stakeholders.

“In association with other business organisations, Busa will be undertaking a comprehensive analysis of the reports once they are released.”

Energy Minister Tina Joemat-Pettersson indicated that they would be published in the November 25 Government Gazette.