/ 6 December 2010

Resource plan gets dim reception

The country’s draft integrated resource plan is a compromised document, it emerged at the public hearings on the IRP2010 in Cape Town.

Presentations on the IRP from members of the public, civil society, business and tertiary institutions have pointed to a number of faults in the assumptions made in the document that will decide South Africa’s electricity mix for the foreseeable future.

  • Lower carbon plan excluded
  • Major problems listed by presenters include the argument that IRP2010 is gearing up to supply the country with too much power, ignoring the impact price increases will have on demand, as well as the potential savings that can be made through energy-efficiency measures and demand-side management.

    The presentations echo the rumblings of concern that have continued to grow over the assumptions made in the IRP2010 and accusation that it has failed to examine properly the contribution that renewable energy can make.

    In addition, it is said that the learning curves associated with renewable technologies, or the rate at which the prices for renewables will decrease as various technologies are refined and production is scaled up, is not properly considered by the document.

    Critics are also deeply sceptical about the emphasis placed on nuclear power as a solution to South Africa’s future power needs.

    Sarah Ward, who heads the City of Cape Town’s energy and climate-change branch, has argued that large metros account for about 50% of all Eskom demand and that there should have been better representation for metros on the IRP2010’s technical task team.

    ‘Business as usual on steroids’
    Demand projections incorporated in the IRP2010 expect demand to double by 2034, but Cape Town’s projections of future demand as a metro, were substantially more conservative, given the inclusion of energy-efficiency measures.

    It’s a case of “business as usual on steroids”, said Ward. The failure to include learning cost curves was a problem, she noted, as renewable energy costs were expected to decrease while conventional energy costs were set to rise.

    Similarly, the Cape Town Chamber of Commerce argued that savings and energy efficiency were ­unaccounted for. Jeremy Wiley, a former president of the chamber, also noted that intensive users of energy, such as those with large ferrochrome smelters, could supply their own power, as mining conglomerate Xstrata has already indicated it is planning to do.

    The price of electricity for consumers of about R1,20/kWh was significantly higher than Eskom’s selling price of 42c/kWh and as it continued to rise it was likely to drive demand down further. The demand curve from metropolitan areas would flatten, said Wiley.

    The South African Photovoltaic Industry Association (Sapvia) was deeply critical of the fact that learning rates for renewable technologies had not been incorporated.

    Without them, the scenarios included in the IRP2010 are “inherently problematic”, said Chris Haw, speaking on behalf of Sapvia.

    In his presentation Haw pointed out that in the case of solar photovoltaics, 43% of cost reduction came from economies of scale, while projected global growth in the industry was 35% a year.

    The projections
    Cost-reduction projections stood at 8% a year. “Not modelling learning rates renders comparison with non-renewable sources of energy largely inaccurate,” said Haw. “Renewables, and in particular PV, have demonstrated significant historical cost reductions and future cost-reduction potential.”

    Sapvia also pointed out that the South African solar photovoltaic industry already employed about 800 people. In addition, it promoted skills development, local ownership and corporate social investment in community projects.

    It also balanced the grid and support grid in outlying areas, was most suited to dispersed distribution and offered predictable performance.

    Ompi Aphane, the acting deputy director general for electricity, nuclear and clean energy at the energy department, told the Mail & Guardian that the department was “alive” to the issues raised, particularly those of “demand elasticity and energy efficiency”.

    He confirmed that a further scenario was being modelled which considered renewables in lieu of nuclear energy and which would be made available in mid-January.

    He argued, however, that should cost curves for renewables be incorporated into the IRP, they would also have to apply to technologies such as clean coal technology and carbon capture and storage, which could reduce the costs of traditional energy sources such as coal.

    Haw told the M&G that all learning curves could be included, including those for technologies, such as clean coal, but that these should be weighted on the certainty of the cost reduction.