municipal tariff hikes

Welcoming the Department of Energy’s Integrated Resource Plan (IRP) was the vocal non-profit group Organisation Undoing Tax Abuse (OUTA) noting that the masterplan is paving the way for renewable energy.

The plan is a 12-year plan to 2030, which envisages additional generation capacity by 2030 of 1,000MW coal, 2,500MW of hydro, 5,670MW of photovoltaic, 8,100MW from wind and 8,100MW from gas.

Although there are some scenarios outlined to 2050, the lack of a clear long-term vision reduces South Africa to “firefighting” solutions, says Ronald Chauke, OUTA’s Portfolio Manager for Energy, who believes a 20-year plan would have been ideal.

“This is a temporary solution, which will leave South Africa lagging behind,” according to Chauke.

OUTA said it welcomes the move as it is aimed at ensuring that cheaper and cleaner renewables as sources of energy will replace coal in line with international developments.

The non-profit organisation also commended government to prepare itself and strengthen the regulatory regime and its policy response to these rapid technological developments.

Decommissioning of Eskom plants

Chauke noted the contents of the draft IRP, which states that the decommissioning of Eskom plants (totalling 28GW by 2040 and 35GW by 2050) will translate into less than 30% of energy supplied from coal by 2040 and less than 20% by 2050.

He said the draft suggests that the department of energy is slowly dimming the lights on Eskom and making way for other supply sources. Read more: Scopa directs Eskom’s board to come back prepared

“It is becoming inevitable that Eskom must revise its business model to diversify its portfolio and be innovative to have new revenue generation streams for it to be resilient.

“This implies that the utility should also consider to partner with IPPs in the planning to build new renewable plants as an investor in these new projects if it wants to survive, hence the utility must adopt a commercial business enterprise culture, not wait for Government to tell it what to do,” he concluded.