14 February 2017

South Africa Bets On Gas, Renewables for Biggest Chunk of Energy Capacity

South Africa will start commissioning new energy capacity by 2022 at the earliest, the Department of Energy said on Tuesday.

The department briefed Parliament's portfolio committee on energy on the Integrated Energy Plan (IEP) and the Integrated Resource Plan (IRP), which were released last year for public comment.

The department said the initial energy capacity in the base case scenario (the starting point) will come from a combination of photo-voltaic (PV) energy, wind and gas.

Commissioning for the base load power, the department said, would be "highly linked" to Eskom's plant retirement schedule and would include:

- conventional base load, which is coal, by 2028;- nuclear by 2037; and - 1 000MW of hydro power around 2030.

With regard to the energy mix, the department said gas and renewable energy would form the "biggest chunk" of installed energy capacity by 2050 and there would be a significant reduction in the installed capacity from coal.

Nuclear and coal will however contribute the most to the volume of energy mix that will be supplied by 2050.

Energy Minister Tina Joemat-Pettersson in November last year announced details of South Africa's energy master plan - government's plans for electricity provision within the approved energy mix leading up to the year 2050.

The IEP and the IRP were subsequently gazetted for public comment and engagement on November 25 2016.

The IEP is a roadmap of the future energy landscape for South Africa, which should serve as a guideline for future energy infrastructure investments and policy development in South Africa.

The structure of the IEP is based on current energy consumption in different sectors of the economy - from agriculture, commerce and industry to residential and transport - and uses this to project future energy requirements, based on different scenarios.

The scenarios on the other hand are based on various assumptions about economic development and the structure of the economy; they also take into account the impact of environmental, energy efficiency, transport and industrial policies.

The IRP - an updated version of an earlier IRP 2013-30 plan - was also reviewed taking cognisance of the additional generating capacity that has been added to the electricity grid and the lower projected electricity needs.

According to the updated energy plan, the nuclear procurement programme would only need to come on stream by 2037.

Eskom however indicated that it would still issue a tender for the construction of new nuclear power stations by December as it still remains possible under certain scenarios that nuclear power would be required by 2025.

The updated IRP stated that a base case or starting scenario would require an additional 20GW of nuclear power, 5.5GW of wind and solar PV energy, 40GW of gas and 15GW of coal power by 2050.

In the so-called base case scenario the IRP puts limitations on how much solar and wind power can be built.

The imposed limitations elicited fierce criticism from renewable energy experts, who said the constraints placed on renewable energy by the IRP are baseless and that government showed reluctance to embrace renewable energy in South Africa.

President Jacob Zuma In his State of the Nation Address on Thursday surprised when he committed government to South Africa's continued investment in renewable energy as part of its overall energy mix.

Eskom has since the middle of last year stalled the final budget quotes to preferred bidders in Round 4 and the Round 4 extension of the Renewable Energy Independent Power Producer Procurement Programme.

Zuma however said that planned investments in renewable energy would go ahead.

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