HomeIndustry SectorsGenerationNew SA energy plan to become law next month

New SA energy plan to become law next month

SA hopes to have several
independent renewable
energy plants like
this in the near future
Johannesburg, South Africa — ESI-AFRICA.COM — 03 March 2011 – South Africa’s new energy resource plan, which will determine the country’s electricity mix over the next 20 years, is to be passed into law by the start of April, according to a government official.

The draft Integrated Resource Plan (IRP 2) has called for nuclear and renewable energy to play a bigger role in plugging South Africa’s power deficit as it seeks to halve its reliance on coal, which supplies some 95% of the country’s power.

Investors have been watching for moves to boost the country’s power supply after the 2008 crisis forced mines to shut for days, costing the country billions of dollars in lost output.

The plan came under fire late last year and was delayed after industrial leaders, bankers and environmentalists questioned its costs, timelines and feasibility. But Thabang Audat, chief director of electricity in the department of energy, said the process of passing the plan into law was continuing.

“With the expectation that the cabinet process will take up till the end of March, come the 1st of April we should have a promulgated integrated resource plan,” he told Reuters on the sidelines of an energy conference here. After the cabinet has dealt with it the legislation has to be approved by parliament, before the president signs and promulgates it so that the law takes effect.

Private producers have said they could easily supply power to the grid at no cost to Eskom, nor to the National Treasury, if given the chance, but they need a policy framework to do so. They have been frustrated by delays in passing the plan after spending millions in getting projects off the ground.

The South African economy currently relies on coal for almost all of its electricity supply, but the draft of the plan proposes nuclear supplying 14% of the country’s energy mix by 2030 and renewable energy 16%.

The remaining capacity was proposed to come from open cycle gas turbines, pump storage schemes and imported power generated from hydroelectric plants.

Power utility Eskom said it expected South Africa’s power demand to grow 2% this year, but warned that supply would remain tight until its new power plants came on stream.

“The supply-demand margin will remain slim for the next 5 to 6 years, and in particular the next two years,” said Eskom executive Kannan Lakmeeharan at the same conference.

The utility expects to sign deals with independent power producers for 400MW of co-generated power by April, and would like to help procure another 1 500MW of renewable energy in the next three to four years to help ease the supply crunch.