The long wait is over – or is it?

The long-awaited revision of the Integrated Resource Plan (IRP) was released in October 2019. But how long will we have to wait before implementation begins?

By Davin Chown*

What the IRP signals is important: over and above outlining what the future energy mix could look like, it also suggests a roll-out plan and its timing. More importantly, the revised version also talks specifically about key actions the Department of Mineral Resources and Energy (DMRE) needs to undertake.

What it is silent on, however, is the fact that this new plan may cost South Africa R100 billion per annum more than the leastcost version of the IRP. What we also know is that Minister Gwede Mantashe of the DMRE has said that the government wants to see a “just transition plan” in a way that benefits all current stakeholders, and not just a few.

There is provision for the retirement of Eskom’s ageing coal fleet, which will be replaced with some new (‘clean’) coal, renewables and gas. Clearly the future mix is oriented towards renewables, storage and gas, and the real step forward is the sizeable allocation to storage in the IRP. What is not clear is why, given the over-reliance on coal and the electricity supply crisis we are in, we are not preparing for a more rapid transition and moving away from this fossil fuel reliance, gas included, when we have storage technologies able to play a significant transition role.

Taking strain

The return of load-shedding demonstrated, yet again, that the electricity system is taking strain and that the DMRE and Eskom can’t really afford to dither. If we look at the assumptions in the IRP about energy availability, it’s obvious that this is already out of kilter. So too are the import scenarios: the gas solutions from Mozambique still seem a way off, yet the rapid decline in storage costs now allows for peak-time consumption to be supplied from renewable energy (RE) sources.

Add to this the assumption made that, with Kusile and the committed renewables projects, the country requires no real new build until 2025, it’s clear that the assumptions must be urgently revisited. Many are asking whether the IRP has perhaps been overtaken by reality. This clearly seems to be the case. And if we are to grow the economy, the IRP seems lost at sea with its assumptions and projections.

The IRP makes provision for 500 MW per year of decentralised generation, probably mostly solar. We know that the renewables industry is capable of much more, but it’s a very good start. What we need now is the regulation to allow this uptake in the market to move forward unhindered. But here too, we must wait. Storage can be procured on a private-sector-funded IPP model, rather than by Eskom taking out more loans, and such storage can be deployed as large stand-alone sites, co-located with RE generation or via a collection of smaller storage units deployed throughout the distribution network (or even behind the meter).

What are we waiting for?

Politics, policy and regulation are the clear reply. Efficiency must be the single-minded focus of all involved; however, not everyone is happy with the proposed future mix. Some interest groups are unhappy with the fact that nuclear is not playing the role it should be, even though the current plan is likely to cost R100 billion

a year more than the least-cost plan would, given the inclusion of nuclear. Some don’t like independent power producers, while others want unfettered access to the grid and no government interference in how they generate their electricity.

Implementing our plans

We have a workable, solid IRP: one that is implementable and fundable; one that spurs investment interest; one that clearly means new skills will be developed, potential new component manufacturing created; and one that creates new jobs especially in technologies like storage and energy component manufacture.

What we need is someone to fire the starter’s gun and enable a new renewables procurement round based on the framework of a just transition plan; open up the municipal regulatory framework to allow for the rapid roll-out of embedded generation; allow a willing buyer, willing seller market to rapidly unfold; and restructure Eskom.

With Eskom as a slimmer, streamlined, highly efficient facilitator, alongside regional distribution operators, South Africa would have a highly efficient, responsive system that would help fuel economic growth. But we need that starter’s gun to be fired. The time for debate is over. Implementation is critical.