IRP Policy & Planning

Electricity plan ‘out of date’

Melanie Gosling | 07 May 2013 | Cape Times

SOUTH Africa’s electricity plan is out of date and could lead to the building of unneeded power stations at great cost – and higher electricity prices.

The proposed expansion of nuclear power stations should be delayed because more nuclear power would not be needed before at least 2029, and perhaps not until 2040.

These are some of the findings of a study, “Towards a New Power Plan”, commissioned by the National Planning Commission and compiled by UCT’s Energy Research Centre.

A key finding is that the 2010 Integrated Resource Plan – the electricity blueprint for the next 20 years – is so out of date it is no longer valid for planning. If the 2010 plan continues to be a basis for investment decisions on electricity it would result in South Africa being left with “surplus, stranded, expensive” power plants. Findings include:

  • Electricity plan ‘out of date’.
  • The growth in electricity demand has been much lower than forecast, and is still below 2007 levels.
  • Future growth in electricity demand is expected to be lower than those forecast in the 2010 plan.
  • Nuclear costs are higher than those quoted in the 2010 plan.
  • Natural gas generation should be commissioned now to add extra power to the grid within three years, allowing Eskom time to catch up with maintenance on existing power stations which are breaking down more frequently.

Because the out-of-date assumptions in the 2010 IRP include those made on costs, electricity demand, technology and availability of fuel, it is critical that a new plan is developed, the report says.

The costs of nuclear in the 2010 IRP are $5 000 (R45 000) a kilowatt, but recent publications put the cost at $7 000 a kW.

The modelling study says very little further investment in power generation would be needed before 2025 because of lower demand and because the government has already invested in Medupi, Kusile, Ingula power stations and in renewable energy.

It says new power generation between 2025 and 2030 would be dominated by gas, with solar thermal, wind and imported electricity meeting the remaining requirements.

In their modelling, “no nuclear comes online before 2040, and it is economical to bring imported hydro online as soon as possible. Even if much lower costs are assumed for nuclear, plus much higher demand growth, the earliest that nuclear might be required is 2029”.

The 2010 plan puts the need for new nuclear to come online in 2023.

The study puts forward a number of modelling scenarios, including those with higher growth in demand.

The IRP is meant to be revised every two years, and is due to be revised this month, but the Department of Energy has said it will not be done until the Integrated Energy Plan has been finalised.

The Department of Energy was asked to comment but had not replied at the time of publication.

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