The latest draft of the Integrated Resource Plan (IRP) has been broadly accepted by many in the energy sector as it provides some clarity regarding the future of South Africa’s energy mix.
International infrastructure developer, Black & Veatch noted in a statement that while the policy is still open for comment, “it provides sector participants with the opportunity to plan asset investments based on some of the key take-outs, particularly the prominence given to renewables and gas.”
Last week, energy minister Jeff Radebe presented a briefing to the Portfolio Committee on Energy the draft IRP. In his presentation, he highlighted the various salient features of the plan. Read more about IRP 2018: 5 things you need to know
He further noted how important the IRP is to the government’s National Development Plan, which highlights the importance of infrastructure in helping the country meet its mid- and long-term economic and social objectives.
Radebe also pointed out that “energy infrastructure is a critical component that underpins economic activity and growth across the country; it needs to be robust and extensive enough to meet industrial, commercial and household needs.”
According to the IRP, wind will make up 15%, solar photovoltaics (PV) 10% and gas 16% of South Africa’s installed capacity by 2030.
While coal will remain the major producer of electricity in the country, making up 46% of the installed capacity and generating about 85% of the country’s electricity, only two new coal-fired power plants will be added to South Africa’s energy fleet between now and 2030, both of which will be developed by independent power producers.
“One of the noticeable aspects of the latest IRP is government’s return to a least-cost plan, which is shown by the greater prominence given to renewables and gas,” notes Webb Meko, business development director at Black & Veatch.
“In recent year’s the cost of these generating technologies has decreased substantially, which, in turn, has dramatically reduced the cost of the builds of these projects. This is a key factor in determining tariff structures and a lower cost of development and will improve the cost of buying electricity for everyone in South Africa,” Meko points out.
New installed capacity to be generated by 2030 will include: 1,000MW coal; 2,500MW hydro (imported); 5,600MW wind; 8,100MW solar PV; and a significant 8,100MW of gas.
“Gas and renewable energy technologies work exceptionally well as complementary generation sources. For example, gas can be used to supplement supply during periods where solar energy is not available, thereby providing a backstop to the inherent intermittency of renewables and ensuring grid reliability. This approach also allows developers to think differently about project delivery and look for innovative ways to deliver electricity but at the same time address environmental concerns,” Meko highlights.
However, he notes that the infrastructure needed to deliver gas resources to power plants is not sufficiently developed in South Africa to meet the generating contingent set aside by the IRP.