Reproduced with the kind permission of the Parliamentary Monitoring Group (http://www.pmg.org.za) 10 August 2010.
Joint Meeting of Energy Portfolio Committee and Public Enterprises Portfolio Committee
3 August 2010
Integrated Resources Plan (IRP) briefing: Department of Energy
Chairperson: Ms E Thabethe (ANC)
The Department of Energy briefed the Committee on the Integrated Resource Plan 2 (IRP2). The briefing included a summary of the public consultation process that was followed concerning IRP2. The inputs that were received from the public were diverse and addressed issues such as climate change, renewable energy, economic factors and the security of energy supply.
The Department highlighted that it would not focus on affordable electricity at the expense of the climate, and it would not sacrifice employment for commitments that developed nations were loath to make. The Department would use input parameters such as policy, facts and information and develop scenarios that would result in IRP2 outcomes that would address issues such as security of supply, multiplier effects and carbon effects.
The Committee’s questions focused on the lack of consultations with entities such as Eskom, the extent to which the timeframe for electricity supply for the country was influenced by any demographics such as population growth, the difficulty in monitoring externalities, future energy demand, energy efficiency targets and the costs of nuclear energy. Members were concerned that the Department’s Technical Advisory Panel was mostly made up of people from the coal mining industry and the energy intensive user groups. There was no scope for experts on renewable energy. Members also wanted to know if the energy that was sold to alluminium smelters by Eskom at a discounted rate was worked in to the different scenarios for the IRP2. The Committee stated that a degree of transparency was needed with regard to the IRP2 decision-making processes. They asked how far the Department was in terms of the commercialisation of renewable energy, how people that did not have access to the internet would be able to make submissions on the IRP2, how the government’s climate change policy would fit in to the IRP2, how long it would take to close the gap between the demand for and the supply of energy, and how much it would cost to close this gap.
The Committee noted that more focus had to be given to renewable energy. Members and the Department also needed more time to discuss the municipalities’ role in the energy sector. The Committee supported the notion that the IRP would have to be reviewed every year. Their only concern was that the IRP would lead to a set of decisions that would be made by the government, which would lead to a series of contractual obligations. They worried that the government would not be able to get out of these contractual obligations if changes had to be made to the IRP. Members worried that the time in which the IRP had to be promulgated was too short. There was a fine balance between completing the IRP2 process and deterring investment in the plan. The Committee hoped the Department would be able to stick to the IRP timeframe.