Integrated Resource Plan IRP

Draft IRP 2019 for Nedlac discussions – 6 March, 2019

DOE 12 March, 2019



This IRP is developed within a particular context, characterized by very fast changes in energy technologies, and uncertainty with regard to the impact of the technological changes on the future energy provision system. As we plan for the next decade, this technological uncertainty is expected to continue and this call for caution as we make assumptions about the future in a rapidly changing environment. Accordingly, long-range assumptions are to be avoided as much as possible, to eliminate the risk that they might prove costly and ill-advised.
At the same time there is recognition that some of the technology options we have to take, require some level of long-range decisions. We try to harmonize this dichotomy, especially with regards to nuclear, gas and energy storage technologies, which technologies require more consideration of future developments.
The South African power system consists of the generation options, which are 38GW, installed capacity from coal, 1.8GW from nuclear, 2.7GW from pumped storage, 1.7GW from hydro, 3.8GW from diesel and 3.7GW from renewable energy. The electricity generated is transmitted to the various load centres in the country with Eskom and municipalities distributing to various end users. Eskom also supply a number of international customers, including electricity utilities, in the SADC region.
South Africa continues to pursue a diversified energy mix that reduces reliance on a single or a few primary energy sources. The extent of decommissioning of the existing coal fleet due to age and commitment to reduced emissions post-2030, could provide space for a completely different energy mix relative to the current mix. In the period prior to 2030, the system preference is for modular and flexible technology, rather than base load.
Coal: Beyond Medupi and Kusile coal will continue to play a significant role in electricity generation in South Africa in the foreseeable future as it is the largest base of the installed generation capacity and it makes up the largest share of energy
generated. Due to the existing coal fleet age and abundance of coal resources, investments will need to be made in new flexible and more efficient technologies (High Efficiency Low Emission coal technology including new supercritical pulverised fuel power plants with flue-gas desulphurisation) to comply with climate and environmental requirements. The stance adopted by the Organization for Economic Cooperation and Development and financial institutions in regard to financing coal power plants, is a consideration upon which the support of High Efficiency, Low Emissions (HELE) technology is predicated. This ensures that South African coal still plays an integral part of the energy mix.
Given the significant investments required for Carbon Capture and Storage (CCS) and Carbon Capture Utilisation and Storage (CCUS)1 technology, South Africa could benefit from establishing strategic partnerships with international organisations and countries that have made advancements in the development of CCS, CCUS and other HELE technologies.
Nuclear: Koeberg Power Station reaches end of life in 2024. In order to avoid the demise of the nuclear power programme, South Africa has to make a decision regarding the extension and possibly the expansion of the nuclear power programme.
Additional capacity from any technology deployed should be done at a scale and pace that will not have a negative impact on the economy especially through high tariffs as the user of electricity ultimately pays.
Small nuclear units (300 MW or less) are generally a much more manageable investment than big ones whose cost often rivals the capitalization of the utilities concerned.
The development of such plants elsewhere in the world is therefore particularly interesting for South Africa, and upfront planning with regard to additional nuclear capacity is requisite, given the >10-year lead time, for timely decision making and implementation.
Natural Gas: Gas to power technologies in the form of Combined Cycle Gas Turbines (CCGT), Closed Cycle Gas Engines (CCGE) or Internal Combustion Engines (ICE) provide the flexibility required to complement renewable energy. While in the short term the opportunity is to pursue gas import options, local and regional gas resources will allow for scaling up within manageable risk levels. Exploration to assess the magnitude of local recoverable shale and coastal gas are being pursued.
With the increasing availability of gas in Southern Africa, we might be able to expand electricity generation through the use of gas. There is enormous potential and opportunity in this respect and the Brulpadda gas resource discovery in the Outeniqua Basin of South Africa, piped natural gas from Mozambique (Rovuma Basin), indigenous gas like coal-bed methane and ultimately shale gas, could form a central part of our strategy for regional economic integration within the Southern African Development Community (SADC).
Co-operation with neighbouring countries is being pursued and partnerships are being developed for joint exploitation and beneficiation of natural gas within the SADC region. The SADC is developing a Gas Master Plan, to identify the short- and long-term infrastructure requirements to enable the uptake of a natural gas market.
South Africa continues to run open-cycle gas turbine plants e.g. Ankerlig (Saldanha Bay), Gourikwa (Mossel Bay), Avon (Outside Durban) and Dedisa (Coega IDZ) on diesel, simply because of the unavailability of natural gas, which is cheaper than diesel. The gas-power nexus has not yet been exploited, to the extent that gas plants at Avon and Dedisa could be converted to combined-cycle, provided that natural gas (either pipeline or LNG infrastructure) is developed.
Renewable Energy: Solar PV and CSP with storage present an opportunity to diversify the electricity mix, to produce distributed generation and to provide off-grid electricity. Solar technologies also present huge potential for job creation and localisation across the value chain.
The Wind Atlas developed for South Africa provides a basis for the quantification of the potential that wind holds for power generation elsewhere in the country, over and above the prevalence of the wind resource around the areas of the coast. Most wind projects have been developed in the Western Cape and Eastern Cape, so far.
Imported hydro: South Africa has entered into a Treaty for the development of the Grad Inga Project in the Democratic Republic of Congo (DRC), with some of the power intended for transmission to South Africa across DRC, Zambia, Zimbabwe and Botswana.
In addition to this generation option providing clean energy, the regional development drivers are compelling, especially given that currently there is very little energy trade between these countries, due to the lack of infrastructure. The potential for intra-SADC trade is huge as it could open up economic trade.
Naturally, concerns have to be addressed about the political risk associated with such a project. South Africa does not intend to import power from one source beyond its reserve margin, as a mechanism to de-risk the dependency on this generation option.
Energy Storage: There is a complementary relationship between Smart Grid systems, energy storage, and non-dispatchable renewable energy technologies based on wind and solar PV. The traditional power delivery model is being disrupted by technological developments related to energy storage, and more renewable energy can be harnessed despite the reality that the timing of its production might be during low-demand periods. Storage technologies including battery systems, compressed air energy storage, flywheel energy storage, hydrogen fuel cells etc. are developments which can address this issue, especially in the South African context where over 6 GW of renewable energy has been introduced, yet the power system does not have the requisite storage capacity.
The energy sector alone, contributes close to 80% towards total emissions of which 50% are from electricity generation and liquid fuel production alone. Our vast coal deposits cannot be sterilized simply because we have not exploited technological innovations to use them. The timing of the transition to a low carbon economy must be in a manner that is just and sensitive to the potential impacts on jobs and local economies. It is in this context that engagements at a global forums such as the G20 refer to “Energy Transitions” and not “Energy Transition” as a recognition that countries are different and their energy transition paths will also be different due to varying local conditions.
Carbon capture and storage, underground coal gasification, and other clean coal technologies are critical considerations that will enable us to continue using our coal resources in an environmentally responsible way.
Air quality regulations under the National Environmental Management Act: Air Quality (Act No. 39 of 2004) provide that coal power plants under Eskom’s fleet, amongst others, have to meet the minimum emission standard (MES) by a certain time, or they would be non-compliant and have to shut down.
The timing of the requirement for existing, non-compliant power stations to be decommissioned, must take into account the need to balance energy security, the adverse health impacts of poor air quality and the economic cost associated with the transition.

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