The CEO of Business Leadership SA (BLSA), Busisiwe Mavuso, says the recently released draft Integrated Resource Plan (IRP) 2023 should be reworked as it is fundamentally flawed, and has expressed concern in the plan’s ability to fix SA’s electricity supply woes.
Mavuso said the draft plan, which will be used by the government and Eskom to make decisions about the procurement of new generation capacity and other energy planning matters, was “out of touch” with the country’s energy needs and demands and should be immediately reworked to reflect SA’s energy market, which is dominated by coal.
The draft IRP 2023, which will replace the 2019 version of the plan, was published for public comment in January with the deadline for comments in March.
BLSA joins multiple stakeholders in the energy sector that have criticised the energy plan for, among others, continuing fossil-fuel-based energy generation, using expensive gas-to-power plants and cutting back on renewable energy procurement
“We need electricity that is affordable, reliable and can come on stream quickly. Anything that goes against that doesn’t make sense and the IRP needs to be reworked to facilitate this — it’s an imperative to enable economic growth and boost employment,” Mavuso said in her weekly newsletter released on Monday.
According to the IRP 2023, due to slow economic growth and the effect of load-shedding, energy demand in 2023 was about 20% lower than was projected five years ago in the IRP 2019.
The revised version of the plan expects energy demand to remain below the previous forecast until the early 2040s — over the next decade it expects energy demand to increase less than 10%.
Mavuso has criticised the draft energy plan to delay the decommissioning of Eskom’s coal plants, saying the move would result in SA paying heavy penalties in the form of carbon taxes “while the country will also be shunned by numerous institutional investors where fund managers are restricted from investing in high-carbon countries”.
“The reality of the market is that funding for new fossil fuel ventures does not exist, a factor entirely ignored in IRP 2023,” Mavuso said.
The plan proposes adding new generation capacity of about 29GW to the grid by 2030. That is low compared with other studies, including from Eskom, which found SA needs to add 50GMW to 60GW of renewable energy, combined with energy storage, by 2030 to ensure energy security
“It [the IRP] underestimates the uptake of rooftop solar, for which it allocates 900MW a year until 2030, despite far more than that already being added. It also underestimates future energy demand, which on its own puts the entire modelling process at risk,” Mavuso said.
“One element of the IRP 2023 is to delay the shutdown plan of 13,000MW being decommissioned by 2034, and then there will be no decommissioning between 2035 and 2045. But Eskom has already calculated the costs for this, concluding that it would cost about R400bn for a five-year extension of just a small set of power stations and the IRP makes no mention of where the funding would come from.”
With Denene Erasmus
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