HomeFeatures/AnalysisWhile we wait for IRP2

While we wait for IRP2

By Antonio Ruffini, Publishing Editor, ESI Africa

The integrated resource plan (IRP2) process which should provide clarity on the future path of South Africa’s energy sector over the coming decades is due to release its draft in September for public comment. This has to be the process that dominates everyone’s attention at the moment in relation to the electricity sector, not only in South Africa but also in the region.

It should make clear what the role of nuclear power will be in the energy mix. Hopefully IRP2 will provide direction for an enabling environment for IPPs to achieve their power purchase agreements. It should make clear what the role of renewables will be in the country’s future plans, and Eskom has already indicated that it wants to reduce the percentage of coal fired generation in the country’s mix over time.

Coal will remain the dominant option for a long time to come in South Africa, but clarity will be welcomed as to who will be building future projects and to what degree cross border projects from the coal fields of Botswana and Mozambique will be entertained.

Understandably the inputs to the IRP2 process have seen a degree of lobbying, as promoters of different energy alternatives present the benefits of their preferred alternatives. However, I think it is fairly well understood by the majority of stakeholders in the electricity supply sector that the best alternative is a diverse portfolio of energy sources. Every energy form has its advantages and disadvantages, and the best way for a country like South Africa to reduce its energy risks is to diversify as much as it realistically and practically can.

South Africa as a country does have a fairly noticeable carbon footprint and it has made the right noises about including more non-carbon intensive options in the mix. Of the suite of renewable energy options, wind has emerged globally as the most extensive and mature option for grid power. It takes into account that large scale hydro is not recognised by some as a renewable option, though surely pumped storage must be considered a mature renewable technology.

That aside, the government’s IRP1 which covers the period to April 2013 established a renewable feed in tariff (RFIT) for wind of R1.25/kWh and that has been sufficient to draw many of the world’s largest wind energy project developers to South Africa. They are undertaking environmental impact assessments (EIAs) on wind projects for an installed capacity of some 7,000 MW at the moment, which means there is some genuine investment being made in the future of that sector in South Africa. In the vacuum prior to finalisation of IRP2, wind energy developers seem to have been among the most active in preparing their plans, or at least in lobbying for this energy option.

In a country dominated by mining and fossil fuel energy production, the possibility of large scale wind projects capable of meeting both base load and peak smoothing in a reliable way has been greeted with scepticism in some quarters. But if one looks more closely at the technology, which has some 150 MW installed capacity worldwide and has dominated investment in new generation capacity in Europe recently, it provides some convincing responses to such claims. Denmark is probably the most notable wind energy producer, but people say that it can afford to have such a large wind component because it is interconnected with the large fossil fuel and nuclear plants of the European grid. South Africa has no such luxury.

However, evidence shows that wind regimes are sufficiently predictable to manage and can provide up to 20% of the country’s energy mix without having any adverse affect on the reliability of supply. While South Africa has an estimated wind potential of 150,000 MW, land usage limitations limit that to a smaller number ranging between about 56,000 and 70,000 MW. The South African Wind Energy Association has chosen a number of 30,000 MW which it sees as the defensible potential for wind energy in South Africa. Of this it says studies show at least six gigawatts can be seen as potential base load. A mix of east and west coast as well as inland wind options in the Karoo provides a favourable wind regime to enable smoothing of South Africa’s peak load curve.

Taking into account various arguments regarding pricing and lifecycle costs of various energy options, pricewise wind is not massively out of line with other future energy generation capacity options, including coal based on projected Kusile costs. Those who remain sceptical about wind cannot just dismiss it, and should take the time to follow some of the arguments for that energy option. Though South Africa remains an untested market for the technology it does seem like an idea whose time has come, particularly since wind projects can be established relatively quickly, something South Africa may need in the looming crunch years.