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Cabinet to finally review SA energy plan this week

Oct 11 2016 07:30
Liesl Peyper

Cape Town – South Africa’s long-awaited Integrated Resources and Energy Plans – the so-called blueprints for the country’s energy needs and generation capacity – will serve before Cabinet on Wednesday, said Energy Minister Tina Joemat-Pettersson on Monday. 

She was briefing the media on details regarding the awarding of contracts to South Africa’s first independent coal power producers – Thabametsi and Khaynyisa – which will collectively supply more than 860MW of power to the grid within the next five years. 

At the media briefing, Joemat-Pettersson reiterated that independent power producers (IPPs) – whether they produce renewable energy, gas or coal – remain government policy and are therefore supported by Cabinet, the Presidency and the ANC. 

Her reassurance comes after Eskom CEO Brian Molefe said Eskom would for the foreseeable future not sign any renewable energy agreements with IPPs. His utterances created much confusion and unhappiness, which has led to government stating repeatedly that renewable energy remains government policy. 

READ: Eskom backtracks, wants review of green energy project 

“Recent public statements may have caused doubt about the IPPs and I suppose has created uncertainties. But we are fully behind the IPP programme and committed to honouring its obligations.” 

She pointed out though that “certain deadlines” will change due to the changing economic situation, the rand/dollar values and the “changing situation at Eskom”. 

That means government’s approach to the energy mix would be different, due to the fact that the Eskom has stabilised its balance sheet and its generational capacity. “So the approach of Eskom towards all our (energy) programmes would be different.” 

The Department of Energy and Eskom had long deliberations about the Integrated Energy Plan (IEP) and the Integrated Resource Plan (IRP) – both which are in dire need of updating. “You’ll notice that I didn’t issue the Request for Proposals (RFP) for nuclear – precisely because I was listening to Eskom,” Joemat-Pettersson said. 

The energy minister previously indicated in the National Assembly that her department would issue the RFP for South Africa’s nuclear build programme on 30 September, but the announcement was later refuted by two of her cabinet colleagues at different occasions – first Naledi Pandor, Minister of Science and Technology and then Minister in the Presidency responsible for Planning and Monitoring Jeff Radebe. 

Pandor and Radebe said at the time a RFP could not be issued while South Africa’s two energy blueprints have still not been updated. 

The IRP is also an important link towards the country's nuclear new build programme, with the request for proposals waiting on this puzzle piece (and one final piece regarding Eskom) to fall into place. Importantly, Joemat-Pettersson will brief Parliament on Tuesday regarding the nuclear programme.

READ: Confusion over request for proposals on nuclear

Chris Yelland, managing director of EE Publishers and an energy expert, told Fin24 by phone that the absence of updated integrated energy and energy generation plans is holding back proper planning for South Africa’s energy needs. 

“Without an updated IRP and IEP I can’t see how we can proceed with proper planning in this country.” 

According to Yelland, the fact that government granted bids for independent coal producers raises serious questions. “Do we need coal, while renewables, such as PV solar and wind come in significantly lower than coal – both in terms of emissions and price?” 

The latest contracted price for solar PV, he said, was recently set at 35c per kw/h in Abu Dhabi in the Middle East, said Yelland. “That’s dramatically lower than the prices announced”.

Joemat-Pettersson said both independent coal producers have submitted prices below the stipulated 82c, but it was still significantly higher than the price obtained for solar and wind in Abu Dhabi. 

“PV solar and wind are also significantly more affordable and lower than Medupi which comes in at R1.05 and Kusile at R1.16 kw/h, respectively,” Yelland said.

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