On the whole, the draft update on South Africa’s Integrated Resource Plan (IRP) for the 20-year period from 2010 through to 2030 appears to be a most sensible document. It begins by taking account of the fact that electricity demand has not grown anywhere near the pace envisaged when the plan was finally promulgated in 2011. As a result, the IRP’s core assumption (the outlook for demand) is adjusted lower from the initial expectation of 454 TWh by 2030 to between 345 TWh and 416 TWh.

The update’s demand-growth assumption is, in turn, based on two other key assumptions: firstly, that the economy will grow in line with the 5.4% a year presumed in the National Development Plan (NDP) and, secondly, an expectation that the economy will become materially less energy intensive over the period.

Given that South Africa is underperforming against the NDP’s growth target by some margin, it is reasonable to suggest that even the new demand outlook is weighted towards the upside. On the other hand, it is unclear whether government’s stated aspiration for far higher levels of mineral beneficiation (which could possibly even be introduced as a mine-licence condition) has been fully factored into the energy-intensity assumption.

Be that as it may, the overall view that South Africa is going to require less installed electricity capacity by 2020 than had been envisaged in 2011 is difficult to dispute. The update calculates that 6 600 MW less capacity will be required by 2030 and, therefore, adjusts the IRP accordingly.

In sum, it suggests that the nuclear build decision be scaled back and delayed; that there be less coal introduced than envisaged initially and that new coal be pursued in the form of a set of fluidised-bed combustion plants based on discard coal instead of a megascale Medupi-style plant; that regional gas and hydropower prospects are tapped to fill gaps that could arise; that shale gas exploration and energy efficiency programmes be stepped up; that solar resources receive a bigger renewables allocation and wind a smaller one; and that work be done to extend Eskom’s existing coal-fired fleet.

Undoubtedly, there is likely to be much contestation during the comment period, which runs to February 7, around issues such as the nuclear delay, whether or not Coal 3 should be pursued by Eskom and whether wind’s allocation should be slashed from 9 200 MW in the current IRP to only 4 360 MW. But the general thrust appears mostly sensible, especially in light of Eskom’s balance-sheet constraints.

However, there are one or two philosophical strains within the update that need to be tested. One example is contained in the following paragraph, which, at first glance, appears sensible, but raises several questions once it is more fully digested: “Considering the changes in consumption patterns and technology costs over the past three years, it is imperative that the IRP . . . be updated on a regular basis (possibly even annually), while flexibility in decisions should be the priority to favour decisions of least regret. This would suggest that commitments to long-range, large-scale investment decisions should be avoided.”

I concur wholeheartedly with the first sentence, but believe that a far more efficient way should be found to enable regular IRP updates.

However, the proposal to eschew “long-range, large-scale” projects is not only too imprecise to be used as serious advice, it could also have serious unintended consequences. Indeed, it could result in the exclusion of all manner of potentially advantageous, large-scale projects – not only coal and nuclear, for which the sentence appears specifically tailored.