The draft Integrated Resource Plan (IRP) gets quite a few things right, one of these being the two-horizons approach, which considers energy planning until 2030 and beyond. What this does is allow shorter-term planning to deal with the immediate scourge of load-shedding, and an outlook that focuses on long-term energy planning, security of supply, decarbonisation and sustainable cost pathways.
The review of the IRP is premised on a declining Eskom energy availability factor (EAF), declining electricity demand, the procurement of new generation capacity and the need for transmission expansion. There are also policy decisions that have necessitated an IRP review: the Energy Action Plan, Just Energy Transition Investment Plan and the removal of licensing conditions for embedded generation.
The IRP Horizon One suggests that if variable renewable energy (VRE) comes online as per planned initiatives and Eskom delays its coal plant decommissioning while simultaneously improving EAF, coupled with the introduction of gas, unserved energy could be a thing of the past by 2028, all other things being equal.
However, history has shown us that we can expect delays of up to five years on independent power producer projects for myriad reasons. Transmission is also a huge inhibitor for the rapid uptake of renewables. Between 2013 and 2022 just more than 400km of transmission lines was built per year; the current grid shortfall is 14,000km.
Horizon Two, which looks at the system after 2030, calls for an enormous increase in VRE but notes that this will not meet security of supply requirements. The IRP suggests this horizon be coupled with a large new build programme, which will most likely be nuclear as well as dispatchable technologies.
This is a level-headed IRP. However, the draft is unfortunately mum on the integration of the gas master plan in the planning process. The gas infrastructure challenge is also not mentioned — this portion being largely reliant on Transnet.
The IRP is also not explicit on achieving the goals of the SA Renewable Energy Master Plan. You can’t sustain an industry with 1,500MW of new solar PV and 3,000MW new wind capacity until 2030. Unless the assumption is that the master plan hinges a lot of local manufacturing on private sector solar PV participation. If this is indeed the case, it needs to be explicit to private sector players that this is the expectation.
The IRP does not detail the cost and tariff implications. This will be important in understanding whether levelised or full-service costs were used in the assumptions — the VRE tariff then increases dramatically. VRE has grid integration costs, which are often overlooked.
The IRP is, however, modelling that reality by including almost 9,000MW of dispatchable capacity and over 3,000MW of battery. This is in line with the recommendation made by the National Energy Regulator of SA that considering the solar generation “duck curve”, licensing applications for VRE must be coupled with storage.
Common in the two horizons is how to manage decommissioning and security of supply while meeting minimum emission standards, without plunging SA into untold stages of load-shedding.
SA is not alone in this planning conundrum. The North America Electricity Reliability Corporation revealed in its 2023 long term reliability assessment that the biggest challenge facing US utilities is the premature decommissioning of thermal plants, and the second is the growing need for dispatchability given the increasing penetration of VRE.
Criticism of the IRP has centred on private and not national interests. I hope when IRP deliberations get under way egos, capitalist intentions and exaggerated technology claims are laid at the door. Technologies are neither good nor bad per se, as former Eskom CEO Jacob Maroga always points out, but rather their applications have limits.
The IRP is a national energy plan premised on electricity demand, economic growth, system requirements and decarbonisation — it is not a capitalist playbook. There are real life consequences for inadequate energy planning, as witnessed in Germany, Texas, Australia and the UK.
• Mashele is an independent energy economist.
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