Written by: International Rivers
South Africa’s energy planning has long focused on meeting its future energy needs from coal-fired and nuclear power plants, and hydropower imported from neighbouring countries. However, in the years since the government adopted the Integrated Resource Plan (IRP) in 2010 as its blueprint for energy infrastructure, there has been a fundamental shift in the energy sector both globally and within South Africa.
Of note has been the rapid deployment of new clean energy technologies, particularly solar and wind, which have revolutionised electricity generation and exceeded projections on both output and cost-competitiveness.
Secondly, the Paris Agreement on climate change and its commitment to reduce emissions has rendered coal power plants unacceptable and a technology of the past. South Africa is a signatory and has committed among other strategic actions to enable access to modern energy services.
Thirdly, the major delays and wild cost escalations bedevilling the development of hydropower plants at the Inga Dam in DRC and Mozambique’s Mphanda Nkuwa – both of which feature prominently in South Africa’s long-term power supply projections – have exposed the severe financial risks and uncertainties of delivery associated with these large, expensive dams.
A recent peer-reviewed study found that importing power from Inga 3 would escalate South Africa’s power costs by as much 4 billion rand, and that the country could meet its future electricity needs more cheaply by harnessing its own solar and wind potential.
With these current issues and plans on the table, the timing of the forthcoming IRP is opportune and represents a real opportunity to set South Africa on a sustainable energy pathway.
Demand for electricity
Since 2017 energy issues have loomed large in the political discourse in South Africa, prompting President Cyril Ramaphosa to point out that South Africa has in fact been generating excess power. This was confirmed in a new study from the University of Cape Town.
The trend of middle-income consumers who are gradually reducing their reliance on the grid in favour of rooftop fitted solar PV is increasing. This trend is likely to continue as prices of solar PV continue to fall and Eskom tariffs increase and may likely result in reduced electricity demand from the national grid.
This trend would place Eskom in a Catch 22 as it has a huge overhead to maintain its extensive electricity generation and distribution infrastructure while its income declines as consumers move off the grid.
Eskom planners clearly have a challenge on how to set tariffs that are affordable to the consumer and meet their infrastructure maintenance budget. Eskom should note that even large business campuses are moving to rooftop solar PV supplies for electricity.
Transforming the energy sector
Before he was sworn in as president, Cyril Ramaphosa called for “significantly expand[ing] our renewable energy programme to fully take advantage of its potential to stimulate growth and jobs.” Minister of Energy, Jeff Radebe followed through on this pledge by signing renewable energy contracts that the Zuma government had effectively suspended.
It was therefore surprising when, in early May 2018, the same minister reassured the energy committee that South Africa still intends to help the DRC develop the Inga Dam. This is despite major red flags and corruption concerns caused the World Bank to cancel its support and potential investors to back away. Grand Inga is one deal from the Zuma era that should not be honoured. The Inga 3 or Grand Inga is that child with chicken pox that everyone loves from afar, but no one wants to hold.
The forthcoming Integrated Resource Plan (IRP) will determine how South Africa will meet its long-term electricity demand, and whether it will continue to rely on importing new hydropower, such as from the controversial Inga 3 Dam in the Democratic Republic of Congo. It is our hope that the new IRP will consider the plummeting costs of wind and solar power, introduce a comprehensive energy efficiency programme for the country, and discard the old assumptions about what is possible or not possible.
In the new IRP South Africa has an excellent opportunity to craft an innovative and sustainable energy pathway for the country for years and decades to come; a pathway that responds to the changing environment and takes advantage of new technologies.
With new leadership at the helm, this is an important moment to courageously take stock of those old initiatives and deals that should be discarded.