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SA energy will still be two-thirds coal in 2030 – Radebe

Energy Minister Jeff Radebe has told Parliament that the new draft Integrated Resource Plan’s (IRP) prominent coal component is in line with the country’s long-term energy policy and its commitments to mitigating environmental impact — although by 2030, it will cost the country an additional R20-billion.

READ MORE: Reason lights up new energy plan

Radebe and his department were briefing the portfolio committee on energy on the latest IRP, released at the end of August, on Tuesday morning.

In addition to environmental and policy concerns, opposition MPs had been also been concerned about the cost implications of the amount of energy the IRP envisioned South Africa procuring from each source.

The least-cost plan of the IRP relates to PV (photovoltaics or solar), wind and gas energy. Government has recommended a least-cost plan which uses wind, PV and gas, meaning some new technologies projected in the IRP 2010 will not be procured.

In his submission to the committee, Radebe said the policy adjusted in the plan included new additional capacity of 1 000MW of coal generation, 2 500MW of hydro, 5 670MW of PV, 8 100MW of wind and 8 100MW of gas by 2030.

“It must be noted that while the coal-installed capacity will be lower than current installed base, it will still contribute more than 65% of the energy volumes, with nuclear contributing about 4%,” said Radebe.

Radebe said the inclusion of 1 000MW of coal-to-power in the 2023-24 period would be based on two already procured and announced projects.

“The inclusion of 2 500MW of hydro power in 2030 aims to facilitate the SA-DRC treaty on the Inga Hydro Power Project. The project is [the] key to energising and unlocking regional industrialisation,” he said.

‘Forcing’ unfamiliar projects

Committee member for the Democratic Alliance, Gavin Davis, asked Radebe why unfamiliar projects seemed to have been “forced into” the IRP, and how much deviations from previous projections would cost.

The department’s chief director for electricity, Jacob Mbele, told MPs that deviations in the department’s least-cost assumptions for the energy industry would increase the costs for energy procured in line with the IRP.

“Any deviation from the plan adds costs. When you smooth out renewables, you are adding costs. In terms of associated costs, overall percentage we see once we have made a policy adjustment is 5% more,” said Mbele.

Mbele added: “The IRP takes into account possible costs associated with transmission. Additional costs associated with coal [appear] by 2030 to be R20-billion or so.

“This must be thought of in the context of closing the gap for renewables in the future.”

Radebe told the committee that imposing annual build limits on renewables did not impact the total installed capacity of renewable energy technology for the period up to 2030.

He said Eskom’s existing generation plant performance was not at levels assumed in the 2010 IRP.

‘Many sources included’

Deputy Minister Thembi Majola said: “In terms of coal factored in, people seem to assume that the IRP office is all about renewables. Many sources of energy are included.”

Radebe said the energy industry had 18 000MW of new generation capacity in the form of coal, pumped storage and renewable energy.

The costs of new generation technologies dropped significantly, and this was apparent in the costs of wind and PV, based on the projects procured to date, he said.

Towards the end of the meeting, Majola sought to calm Davis, asking if he had any further questions.

Davis remarked: “I just wanted him (the minister) to answer my previous questions, but it’s okay. He doesn’t seem to have the answers anyway.” — Fin24

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Khulekani Magubane
Khulekani Magubane

Khulekani Magubane is a senior financial reporter for Fin24. 

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