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Johannesburg – An energy mix with 72% renewables will cost R90bn less than nuclear or coal, says the Council for Scientific and Industrial Research (CSIR).
This is according to research presented by the CSIR's centre manager for energy, Dr Tobias Bischof-Niemz, who was speaking at a public forum on the Department of Energy’s (DoE) Independent Resource Plan (IRP) held in Boksburg on Wednesday.
The public forum allowed different stakeholders in industry to make recommendations to the IRP 2016 proposal.
The proposal sees 20 385 MW of nuclear coming online between 2037 and 2050 in the base case, and 15 000 MW of new coal between 2028 and 2041. The process is to be concluded in February 2017 and the DoE will submit the plan to Cabinet for sign-off by March.
According to the CSIR, the cost of energy generation given the IRP’s two scenarios, carbon (nuclear) and baseload (new coal), could each cost R580bn.
Renewables such as solar PV and wind energy would make up 34% of the carbon mix and 27% of the baseload mix. However, in its own revised scenario with the least cost and least constraints to renewables, the CSIR estimated cost of energy generation would be R490bn.
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In calculating these costs, Bischof-Niemz explained that the Independent Power Pricing (IPP) tariffs were used.
This contrasts with the IRP’s cost assumptions. It assumes a higher cost for solar PV than baseload coal and assumes 7% lower cost of wind compared to baseload coal, he explained.
“From this perspective there is a discrepancy in IPP costs and numbers in the IRP 2016.”
“We know with very high certainty that new solar PV and wind is roughly 40% cheaper than new baseload coal,” said Bischof-Niemz.
Cost assumptions used by the IRP for solar PV and wind were between 55% to 80% more expensive than the actual IPP tariffs.
The IRP placed a “significant limitation” on the amount of solar and wind capacity that the model is allowed to build in any given year, said Bischof-Niemz. The CSIR expert further said the justification for this is not available in the IRP documents.
“This is not a small thing, it has huge consequences for model outcome.”
Outcomes show that CO2 emissions for the baseload amount to 200m tons per year, versus 90m tons per year for either the carbon or optimised scenarios. As for water, 40bn litres of water will be used in the baseload scenario, versus the 16bn litres used in either the carbon and renewables scenario.
Bischof-Niemz explained that in both the carbon and optimised scenarios, more renewables are used, which has a bearing on the CO2 emissions and water requirements.
He added that for a least cost scenario, the IRP should implement a 70% renewable energy mix, which calls for it to lift limits off renewables and the IRP should use updated costs.
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Mike Levington, chairperson of the Ministerial Advisory Council on Energy (Mace) working group, who was also at the forum recommended that the costs be adjusted to reflect actual South African tariffs.
Like the CSIR's reoptimised scenario, the working group recommended that annual new-build limits imposed on solar PV and wind are removed to achieve a cost effective solution.
Levington added that cost differences between alternative scenarios also be transparently reported for stakeholders to make fair assessments when policy decisions are taken.
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