A member of the National Planning Commission (NPC) has pointed to serious shortcomings in South Africa’s current energy planning processes and has called for future plans, including the highly contested Integrated Resource Plan (IRP) for electricity, to be compiled by a new independent technical entity with no interests in the future power generation mix.

Speaking at Wits Business School this week, Jarrad Wright reported that an NPC reference group had been established to consult on the future of energy planning in South Africa. Meetings would be held with various stakeholders in the coming months with the intention of arriving at a “more defined position” on the approach the country should adopt.

It was nevertheless already apparent that priority had to be given to the periodic “publishing and promulgation of strategic national energy plans” and that these plans should be consistently updated to take account of changing realities.

South Africa’s existing IRP was written in 2010 and promulgated in 2011. However, it is widely acknowledged as being out of date, having been based on a wildly optimistic demand growth forecast, as well as on technology costs that have since changed.

The Department of Energy (DoE) published a draft IRP ‘Base Case’ in November and held a series of public consultations on the document. The public comment period closed at the end of March and Energy Minister Mmamoloko Kubayi subsequently confirmed that the IRP would be updated in the last quarter of the current fiscal year, which ends on March 31, 2018. However, she provided no clarity on the handling of public submissions, or the whether there would be a further opportunity to comment on the plan before it was promulgated.

Wright, who is also principal engineer at the Council for Scientific and Industrial Research Energy Centre, which submitted a critical submission on the Base Case, argued that the energy planning environment was being “disrupted” as a result of significant changes in the cost of technologies, such as solar photovoltaic and wind. In addition, it was not foreseen in the IRP 2010 that electricity demand would remain relatively flat and actually slightly decline since it was promulgated. It is well known that South Africa's electricity intensity has been declining but it is likely as a developing economy that absolute electricity demand will increase into the future.

“On the demand side, we need to reflect recent realities and on the supply side we really do need to reflect recent realities. Supply technology costs have changed significantly in recent years and we need to make sure that we take this into account, as it is changing energy planning outcomes globally, not just in South Africa.”

Wright also appealed for “complete transparency” so that any deviation from the combined principles of “least-cost and least-risk” were not only quantified, but also subjected to public scrutiny and debate.

He questioned why all the public submissions made had not been released to the public and also challenged the “completeness” of the Base Case. “Whether it was a draft of selected assumptions and scenarios, or a full draft IRP we are not 100% sure. But the reality is that it was not complete, it did not contain a significant amount of quality content.”

The IRP Base Case has been widely criticised for including constraints on the amount of renewable energy that could be included in any one year. This limitation has been described as artificial, while the authors of the draft Base Case provided no technical or economic justification for the decision to impose such restrictions.

Critics of the Base Case have even suggested that the restrictions were imposed purely to ensure that nuclear remained in the plan, despite its costs disadvantages. In the event, the Base Case includes more than 20 000 MW of nuclear capacity for inclusion in the generation mix by 2050, but delays the introduction of the first reactor to 2037.

To improve confidence in future IRPs, Wright suggested that the development and collation of all input assumptions, as well as all technical modelling, should be outsourced to a “purely technical entity that has no financial interest in the future power generation mix”. At present, Eskom performs the technical work on behalf of the DoE.

“Even though it is likely that the modelling is produced in an independent manner [within Eskom], the perception of independence is even more important than whether or not it is independent,” Wright asserted.

Future energy plans should also be subjected to “international peer review” to further bolster their credibility and legitimacy.

Once the energy plans were promulgated, however, there also had to be a commitment to implementation so as to avoid situations whereby stakeholders could prevent projects from proceeding, as was currently the case with 37 legally procured wind and solar PV projects.

Wright argued that improvements to energy planning would help ensure better alignment with chapter four of the National Development Plan, which dealt with economic infrastructure, including energy.

The plan calls for the sector to support economic growth and development through appropriate investments that ensure reliable and efficient energy services at competitive rates.

It also calls for expanded energy access, through affordable tariffs and targeted subsidies and stipulates the need for environmental sustainability, through efforts to reduce pollution and mitigate the effects of climate change.