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Is the energy plan rigged?

Nov 27 2016 07:09
Dewald Van Rensburg

Johannesburg - The new updated Integrated Resource Plan (IRP) has come under fire for being biased in favour of nuclear and rigged against renewables.

Despite a new “base case” released this week significantly pushing back the need for new nuclear reactors, the plan still relies on an “annual build limit” for, especially, wind power, which government’s own experts have called arbitrary.

Without this limit, the plan would call for almost no nuclear and an enormous amount of renewables.

At the same time, the significant amount of new renewables the plan actually does call for will be largely theoretical if the impasse between Eskom and independent power producers is not resolved.

Amid all this, Eskom has vowed to continue with preparations for new nuclear stations because the same contentious build limits make it possible that the pendulum could swing back towards a rapid nuclear programme in the immediate future.

The long-awaited updated IRP was released in Pretoria this week, but will only result in a formal blueprint for new investments in March after public consultations.

It is apparent that the IRP has ignored objections from the ministerial advisory committee on energy – a team of energy experts reporting to Energy Minister Tina Joemat-Pettersson.

A draft of the report was leaked to Business Day weeks ago, revealing that the experts thought the “build limits” on renewables were arbitrary and, by default, this makes nuclear power necessary.

“The ministerial advisory committee on energy has asked that their report be included in the consultation process,” said ministerial spokesperson Allan Taylor.

“They differ from the base case, but one is going to see experts that differ from it in the other direction too,” he told City Press.

The assumption is that a physical limit of 1 600 megawatts of wind could be built in any given year.

For much of the period to 2050, the model then says that South Africa should build exactly that – 1 600MW every year. Solar is limited to 1 000MW a year.

When the limits gets removed, the IRP model proposes a massive increase in renewables and no nuclear until the late 2040s.

This is not the only problem with the IRP, according to Brenda Martin, chair of the renewables industry’s umbrella body, the SA Renewable Energy Council.

She claims that the IRP is still using outdated and inflated renewable prices for its forecasts.

The IRP document expressly claims that the model used the latest and cheapest prices from window four of the renewable energy independent power producer programme.

Martin said this couldn’t possibly produce the results that have now been presented.

“They have not used window four prices,” she told City Press.

“Their prices are at least three years old.”

The renewable energy lobby is not entirely unhappy. The IRP encourages “sufficient” renewables no matter what assumptions get made, said Martin.

Whether this leads to new investment is another question.

The way the IRP leads to actual investment is through ministerial determinations, which have to refer to the IRP and call for certain quantities of certain technologies to be built.

Independent power producers say Eskom has already undermined this mechanism.

The SA Wind Energy Association is expecting a regulatory ruling on its recent complaint against Eskom on December 8.

This follows Eskom allegedly stalling all new renewable projects simply by refusing to sign off on the winning projects that have already come out of the renewable energy independent power producer programme.

The old “base case” IRP scenario from 2013 called for 9 600MW of nuclear energy by 2030.

The new one only sees a new nuclear plant up and running by 2037 with new reactors totalling 10 000MW only due in 2045.

But the door is still open for a turn to nuclear.

Matshela Koko, Eskom’s head of generation, pointed out that there was a scenario where the IRP could still call for nuclear as early as 2026 due to the build limits.

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