7 takeaways from SA's energy plan - the draft IRP 2018

Energy Minister Jeff Radebe on Monday released for public comment the long-awaited Integrated Resources Plan for 2018.

The plan maps out how government intends to manage electricity demand in industry, households and business up until 2030.

IRP 2010 was first promulgated in 2011 and is a "living plan" intended to be revised by the Department of Energy (DoE) frequently.

The public have 60 days from today to submit their comments.

Here’s what you need to know:

1. Plan for 2050

The IRP 2018 is an electricity plan for the period up until 2030. Detailed studies and engagements will take place to better inform the energy mix after 2030, up until 2050, said Radebe, who spoke at a briefing.

The minister explained that this approach would ensure policy certainty by allowing engagement on the energy transition. "The engagements will ensure that the transition we undertake is a 'just transition' and is inclusive," said Radebe.

2. SA's electricity demand is declining

Some of the assumptions in IRP 2010 about electricity demand have not played out in reality and are outdated, according to Radebe.

Electricity demand on the grid has been declining on an annual basis. Current volumes are similar to those in the year 2007. "For the financial year ending March 2018, the actual total electricity consumed is about 30% less than what was projected in IRP 2010," said Radebe.

Similarly, Eskom’s existing generation plant performance is not at expected levels. "Eskom’s own reports show that plant availability is below the IRP 2010 assumptions of 80% and above."

The new IRP takes into account the declining electricity demand.

3. Four scenarios tested

The DoE considered four scenarios and their impact on the future energy mix. These are an electricity demand scenario, a gas scenario, a renewables scenario and an emissions constrain scenario.

The DoE found that the pace and scale of new capacity developments needed to be curtailed - compared to what was projected in IRP 2010. The least cost plan relates to PV, wind and gas only - which means some new technologies will not be deployed as projected in IRP 2010.

Annual build limits on renewables will not impact the total installed capacity of renewable energy technology leading up to 2030.

The energy mix for 2030 sees the decommissioning of old coal power plants reaching the end of their life.

4. Impact on the coal sector

Minister Radebe said that the DoE had prepared a document for stakeholders in the coal sector, which deals with issues of a "just transition" given that the decommissioning of coal plants would impact jobs.

The DoE has identified a socio-economic impact analysis as one of the studies to be undertaken during the period to determine the impact of the decommissioning of the coal-fired power plants that would have reached the end of their life.

The minister added that Eskom would be better positioned to answer as to how the decommissioning of coal plants will take place.

According to the IRP, coal will account for 46% or 34 000 MW of the installed capacity mix up until the year 2030. Even though coal will be lower than the current installed base, it will still contribute more than 65% of the energy volumes.

5. Least cost plan

The costs of new generation technologies has come down - and has resulted in reduced costs on wind and PV (photovoltaic) projects. Government has recommended the least cost plan which favours wind, PV and gas.

A total of 5 670 MW of energy will be derived from PV, 8 100 MW from wind and 8 100 MW from gas.

Wind will account for 15% of installed capacity, gas 16% and PV 10%.

6. Gas to power projects

Radebe weighed in the prominence of gas in the energy mix – gas accounts for 16% or 11 930 MW of the installed capacity mix in the year 2030. An additional 8 100 MW of capacity by the year 2030 will be sourced from gas.

As to where the gas will come from, Radebe explained that countries in the Southern African Development Community (SADC) has a committee working on a gas master plan for the region, which is dealing with the matter. South Africa also has bilateral agreements with Mozambique – SA will meet with Mozambique to finalise arrangements in this regard.

Radebe added that the Mineral and Petroleum Resources Development Act (MPRDA) bill, which is currently with the National Council of Provinces, will also deal with fracking in the Karoo. Last week, Mineral Resources Minister Gwede Mantashe told the portfolio committee on mineral resources that he was considering withdrawing the bill.

7. No additional nuclear

The plan will see no increase in use of nuclear energy up until the year 2030, Radebe said during a question and answer session in the briefing.

According to the IRP nuclear will contribute 4% to energy volumes for the period.

Radebe explained that there would be detailed technical analysis to see how much nuclear energy may be needed after 2030 up until 2050. "Up until 2030 there is no envisaged increase."

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
I'm not really directly affected
18% - 1968 votes
I am taking a hit, but should be able to recover in the next year
23% - 2579 votes
My finances have been devastated
34% - 3827 votes
It's still too early to know what the full effect will be
25% - 2757 votes