Integrated Resource Plan Public participation processes and records

Integrated Resource Plan 2018 (IRP): public hearings 24 – 26 October, 2018

Integrated Resource Plan 2018 (IRP): public hearings

Energy

26 October 2018

Chairperson: Mr F Majola (ANC)

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Meeting Summary

The Committee heard the last batch of oral submissions on the Integrated Resource Plan 2018 (IRP). The South African Local Government Association (SALGA), South African Wind Energy Association (SAWEA), National Society of Black Engineers of SA (NSBESA), Black Business Council (BBC) jointly with the SA Energy Forum (SAEF), Organisation Undoing Tax Abuse (OUTA) and the Fossil Fuel Foundation (FFF) made submissions.

SALGA welcomed the major improvements in least cost technology choices in the IRP. This was a significant improvement from previous versions. Municipalities acknowledged the importance of job protection and retention related to coal-fired power. However, higher costs will have serious ramifications for consumers and the country as a whole. SALGA also welcomed the inclusion of Embedded Generation and connecting that supply into the electricity network. However, there was no substantial evidence on how the IRP arrived at the allocation of 200MW. The allocation of 200MW per year, for both private and public installations, is insufficient. Individual municipalities say they can account for from 200-300MW alone. There is currently 1500MW awaiting generation licenses already. SALGA suggested that the outstanding 1500MW awaiting ministerial determination should rather be resolved first. Future studies should investigate if a limit on embedded generation is necessary, if it can provide a benefit to municipalities and in turn their customers. Municipal owned or contracted renewable embedded generation will assist municipalities in reducing debt to Eskom and support achievement of climate change commitments.

SAWEA recommended that the IRP should be adjusted to smooth out and accelerate procurement of wind and photo-voltaic energy allocations of at least a gigawatt per annum between 2021 and 2030. This would minimise market risks. SAWEA further recommended that the IRP1 scenario be rerun to test the following sensitivities: reconsider coal-related investment costs particularly those relevant to climate policy; realistically lower Eskom fleet availability, without the last two units of Kusile; exclude the two new coal IPPs; consider the power system effect of Electric Vehicles, demand-side flexibility, and earlier decommissioning of the existing coal fleet due to environmental constraints, and the effect of carbon tax on the short-run marginal cost. The resulting model findings would be likely to favour new wind capacity allocations of between 1.5 to 2.5 GW per annum.

NSBESA said the IRP must be amended as it will negatively impact NSBESA members and families, will lead to job losses, compromise security of supply, reverse empowerment gains, and compromise sovereignty of the state. Therefore, it was recommended as follows: 75% be base load coal, nuclear and solar, and 25% be wind and solar supported by gas/battery storage; Eskom should maintain a greater than 70% control of the electricity supply industry; 100% job preservation as the old plants are decommissioned, extend life of old plants and alternatives to absorb jobs be established. NSBESA further recommended 51% localization and the creation of export ready black industrialists.

OUTA acknowledged and welcomed the Department of Energy’s (DOE) endeavours to pursue a cleaner and least cost energy mix for the future in line with the reduction in deployment and generation costs of renewable energy technologies and moving towards a more a low carbon energy economy in line with meeting the country’s climate change obligations under the Paris Agreement and a more sustainable energy sector. A balanced approach should be adopted when applying the IRP’s assumptions to ensure that an objective long-term planning and they be reviewed at three year intervals. Government needed to provide clarity on nuclear, the 25000MW from Independent Power Producers. Additional scenarios on growth assumptions must be undertaken to reflect on the current realities of very low economic growth levels to the highest and factor socio-economic implications. There should be clarity about the following: whether the coal determination will be applicable in the foreseeable future or it will be rescinded; Eskom plant decommissioning schedule versus replacement new generation capacity construction lead times (build programme). To ensure alignment between retired capacity and commissioned new capacity [i.e. quantities of renewables procured and to-be constructed (ready for dispatch) equivalent to the existing coal capacity to be decommissioned. Further, additional scenarios on growth assumptions must be undertaken to reflect on the current realities of very low economic growth (GDP) levels to the highest, and detailed studies and analysis of the impact of gas still had to be undertaken. OUTA expressed concern that a huge allocation (16%) had been given for open cycle gas turbine (OCGT) without proper cost benefit analysis and due diligence undertaken.

The BBC, in joint submission with SAEF, said it had been determined that the newly released Draft IRP 2018-2030 has major shortcomings. The extent of the shortcomings were so significant that they could have serious implications for the developmental agenda of the country and efforts to improve socioeconomic conditions. It is also not forward-looking and not aligned to the aspirational aspects of the NDP. Instead it displays lack of ambition by relying on past trends during a period when the country has been in an economic depression. The Draft IRP was lacking in detail for a document of that importance and several conclusions/decisions were made without serious consideration of the context of the country, detailed risk analysis, accurate costing and transparency. The Draft IRP is also meant to be an update of the previous plan; however it appears to be a total overhaul and reflects lack of consultation with stakeholders in the process of compilation. The rationale and assumptions used to arrive at the conclusion and thus an energy mix are also flawed.

The FFF called for an intense review of all energy sources, as the current IRP draft dealt almost solely with solar and wind. The organisation wanted the government to appoint appropriate experts to undertake studies into all energy sources to ensure the most appropriate energy mix. Coal total coal sales, both local and exported, generated R120 billion in 2017 and was the country’s highest foreign exchange earner. It was the largest mining income earner, beating gold, platinum and diamonds. She argued that the coal industry has 225 000 direct employees in coal mining, power generation, Sasol and metallurgical industries. The FFF further advocated for circulating fluidised-bed combustion (CFBC) technology, a clean coal technology with lower emissions to be implemented. Carbon dioxide emissions are significantly reduced when coal is co-fired with biomass. The use of clean coal in Kenya’s Amu ‘Clean Coal’ power station was an example of how things could work in South Africa. The power station significantly reduces nitrogen oxide and sulphur oxide emissions. The cost implications of reducing coal needs to be carefully considered, as this would reduce the foreign exchange earned by coal. Another item to be carefully considered is the need to cost out the implications of adjusting boilers for flexible ramping.

The Committee would hold roundtable discussions on the draft IRP 2018 the following week.

Meeting report

The Chairperson welcomed everyone to the last batch of public hearings on the draft IRP. He invited the presentations from stakeholders.

South African Local Government Association (SALGA) submission

Mr Thami Ngubane, Chairperson: Energy Working Group, SALGA, appreciated and applauded the Minister and the Department for the substantial amount of work done. He stated that the 2018 version of the Integrated Resource Plan was not least-cost based, and that this would have major financial repercussions for municipalities. By introducing self-determined limits to the amount of renewable energy that could be introduced to the energy mix each year, the IRP might worsen existing challenges. These include grid defection (where users are independent of the electricity grid) as well as consumer and municipal debt.

SALGA welcomed the major improvements in least cost technology choices in the IRP for the year 2018. This was a significant improvement from previous versions. Municipalities acknowledged the importance of job protection and retention related to coal-fired power. However, higher costs will have serious ramifications for consumers and the country as a whole. SALGA also welcomed the inclusion of Embedded Generation and connecting that supply into the electricity network. However, there was no substantial evidence on how the IRP arrived at the allocation of 200MW. The allocation of 200MW per year, for both private and public installations, is insufficient. Individual municipalities say they can account for 200-300MW alone. There is currently 1500MW awaiting generation licenses already. SALGA suggested that the outstanding 1500MW awaiting ministerial determination should rather be resolved first. Future studies should investigate if a limit on embedded generation is necessary, if it can provide a benefit to municipalities and in turn their customers. Municipal owned or contracted renewable embedded generation will assist municipalities in reducing debt to Eskom and support achievement of climate change commitments.

South African Wind Energy Association (SAWEA) submission

Ms Brenda Martin, CEO, SAWEA, expressed concern about the effects of stop-start procurement on employment and on local manufacturing sector growth. The procurement gap has a direct and immediate impact on employment as it would result in many manufacturing facilities and support services planning for closure or retrenchments. HR investments made to-date in training and skills development, especially by manufacturing facilities, will be lost. The sudden spike in the commissioning of new wind from 2026 to 2030 would then create an enormous bottleneck for local manufacturing demand. On local manufacturing industry impacts, a three-year procurement gap is not supportive of government’s commitment to creating an employment-intensive local manufacturing sector.

SAWEA recommended that the IRP should be adjusted to smooth out and accelerate procurement of wind and photo-voltaic energy allocations of at least a gigawatt per annum between 2021 and 2030. This would minimise market risks. SAWEA further recommended that the IRP1 scenario be re-run to test the following sensitivities: reconsider coal-related investment costs particularly those relevant to climate policy; realistically lower Eskom fleet availability, without the last two units of Kusile; exclude the two new coal IPPs; consider the power system effect of Electric Vehicles, demand-side flexibility, and earlier decommissioning of the existing coal fleet due to environmental constraints, and the effect of carbon tax on the short-run marginal cost. The resulting model findings would be likely to favour new wind capacity allocations of between 1.5 to 2.5 GW per annum.

National Society of Black Engineers of SA (NSBESA) submission

Ms Seponono Kekana, Professional Engineer, NSBESA, identified a number of shortcomings in the draft IRP. Based on her analysis, these were: loss of context; inadequate risk analysis; unemployment considerations;

Output needs to be sanitized to ensure that context is not lost; and inconsistent costing basis. Context ensures the minimisation of unintended project consequences, and therefore it should not be lost. On costing considerations, the method used for cost comparison to arrive to least cost option was flawed. Accurate costing requires a defined user requirements specifications, and it costs very little to obtain accurate costing. NSBESA therefore questioned why accurate costing was not obtained. More so, risk consideration had been inadequate as the economic contribution of power stations earmarked for decommissioning was vast. The combined impact on GPD, government revenue, employment as well as households ran into billions of rand.

In conclusion, IRP 2018 must be amended as it will negatively impact NSBESA members and families, will lead to job losses, compromise security of supply, reverse empowerment gains, and compromise sovereignty of the state. Therefore, it was recommended as follows: 75% should be base load coal, nuclear and solar, and 25% be wind and solar supported by gas/battery storage; Eskom should maintain a greater than 70% control of the electricity supply industry; 100% job preservation as the old plants are decommissioned, extend life of old plants and alternatives to absorb jobs be established. NSBESA further recommended 51% localization and the creation of export ready black industrialists.

Organisation Undoing Tax Abuse (OUTA) submission

Mr Ronald Chauke, Energy Portfolio Manager, OUTA, acknowledged and welcomed the Department of Energy’s (DOE) endeavours to pursue a cleaner and least cost energy mix for the future in line with the reduction in deployment and generation costs of renewable energy technologies and moving towards a more a low carbon energy economy in line with meeting  the country’s climate change obligations under the Paris Agreement and a more sustainable energy sector. A balanced approach should be adopted when applying the IRP’s assumptions to ensure that an objective long-term planning and they be reviewed at three year intervals. Government needed to provide clarity on nuclear, the 25000MW from Independent Power Producers. Additional scenarios on growth assumptions must be undertaken to reflect on the current realities of very low economic growth levels to the highest and factor socio-economic implications. There should be clarity about the following: whether the coal determination will be applicable in the foreseeable future or it will be rescinded; Eskom plant decommissioning schedule versus replacement new generation capacity construction lead times (build programme). To ensure alignment between retired capacity and commissioned new capacity [i.e. quantities of renewables procured and to-be constructed (ready for dispatch) equivalent to the existing coal capacity to be decommissioned. Further, additional scenarios on growth assumptions must be undertaken to reflect on the current realities of very low economic growth (GDP) levels to the highest, and detailed studies and analysis of the impact of gas still had to be undertaken. OUTA expressed concern that a huge allocation (16%) had been given for open cycle gas turbine (OCGT) without proper cost benefit analysis and due diligence undertaken.

On funding new coal build, the Department and National Treasury must consider formulating a policy position on future construction and financing of new coal-fired power stations (similar to how Standard Bank announced its position of no longer financing coal plants). Eskom must also submit to DoE its abatement retrofit programme/schedule of identified power plants and this should be factored into the IRP planning process.

Black Business Council (BCC) and SA Energy Forum (SAEF) submission

The BBC in joint submission with SAEF said it had been determined that the newly released Draft IRP 2018-2030 has major shortcomings. The extent of the shortcomings were so significant that they could have serious implications for the developmental agenda of the country and efforts to improve socioeconomic conditions. It is also not forward-looking and not aligned to the aspirational aspects of the NDP. Instead it displays a lack of ambition by relying on past trends during a period when the country has been in an economic depression. The Draft IRP 2018-2030 was lacking in detail for a document of that importance and several conclusions/decisions were made without serious consideration of the context of the country, detailed risk analysis, accurate costing and transparency. The Draft IRP is also meant to be an update of IRP 2010; however it appears to be a total overhaul and reflects lack of consultation with stakeholders in the process of compilation. The rationale and assumptions used to arrive at the conclusion and thus an energy mix are also flawed.

Based on the above analysis, BBC and SAEF believed that the current draft IRP 2018 is biased towards imported renewable energy. IRP 2018 is very vague and it was likely to be subjected to continuous manipulation because there are still critical pending studies to be conducted to complete the risk assessment. It is forcing a non-developmental direction of the economy in the long-term. There is misalignment between IRP 2018 with the objectives of the NDP and is likely to escalate the deteriorating socio-economic issues and hamper transformation. IRP 2018 only addresses a few of the key elements of IRP objectives set out in the introduction section of this document above. This in essence will risk investor confidence into South Africa and for them to make necessary preparation plans to invest in the economy. This preparation concerns also affects the education system, local industry and indirect investors like property developers, infrastructure and secondary related industries.

In a nutshell, the revised Draft IRP must be reviewed to incorporate all relevant technologies in the needed energy mix and must present a balance view to secure realistic energy security of supply infused with specific goals of the NDP which includes industrialization, technology transfer, job creation and socio-economic development and others. All the deficiencies as outlined must be adequately addressed in the final IRP 2018-2030.

Fossil Fuel Foundation (FFF) submission

Dr Nandi Malumbazo, Senior Scientist, Council for Geoscience, called for an intense review of all energy sources, as the current IRP draft dealt almost solely with solar and wind. The FFF wanted the government to appoint appropriate experts to undertake studies into all energy sources to ensure the most appropriate energy mix. Coal total coal sales, both local and exported, generated R120 billion in 2017 and was the country’s highest foreign exchange earner. It was the largest mining income earner, beating gold, platinum and diamonds. The coal industry has 225 000 direct employees in coal mining, power generation, Sasol and metallurgical industries. The FFF further advocated for circulating fluidised-bed combustion (CFBC) technology, a clean coal technology with lower emissions to be implemented. Carbon dioxide emissions are significantly reduced when coal is co-fired with biomass. The use of clean coal in Kenya’s Amu ‘Clean Coal’ power station was an example of how things could work in South Africa. The power station significantly reduces nitrogen oxide and sulphur oxide emissions. The cost implications of reducing coal needs to be carefully considered, as this would reduce the foreign exchange earned by coal. Another item to be carefully considered is the need to cost out the implications of adjusting boilers for flexible ramping.

The FFF identified items which needed to be carefully considered in the IRP 2018 as follows: the cost implications of reducing coal –reduces export=reduces foreign exchange and Gross GDP income; need to cost out the implications of adjusting boilers for flexible ramping; need to ensure base-load power for the country on a secure and reliable basis including adding coal-fired (CFBC) IPPs and Eskom retrofits (after closing old inefficient power plants); need to ensure the needs and availability of coal for heat, power and carbon (as a chemical) are met for industrial users of coal; need to re-evaluate the LCOE given the benefits of CFBC (EPRI and CSIR calculations need further scrutiny); need to ensure South Africa joins the rest of the industrially developing world in using best most appropriate mix in technology and “own” primary energy sources (coal) wisely and for the benefit of all. Contrary to popular belief that “coal is dead”, SA’s coal resources are abundant and can provide low-emitting, cost effective, reliable and sustainable power well into the future with the correct technology–and can work in co-firing with renewables.

Notwithstanding the limitations and criticisms of the Draft IRP, the FFF supports it. However, it was strongly recommended that, after promulgation, the following steps be taken:

  • Intense review of all energy sources undertaken (the current draft deals almost solely with solar and wind)
  • Appropriate experts appointed to undertake relevant studies in all energy sources in order to ensure most appropriate energy mix in future
  • The proposed 10-year plan recommended by the NDP be adopted with 2-year reviews in order to enable future energy plans for South Africa to remain appropriate, relevant, suitable and secure.
  • Serious scenario planning undertaken in order to assess and adjudicate the relevant risks in the Draft IRP 2018. It would appear that, at this stage, the economic, practical, technological, socio-economic and long-term financial risks have not been fully evaluated.
  • In-depth calculations (regression, modelling) using broadly agreed assumptions and a wider data base undertaken to achieve a more realistic, balanced and effective IRP as opposed to the high-level, limited assessments undertaken in this Draft IRP to date.

The Chairperson appreciated the submissions and indicated the Committee would hold roundtable discussions on the draft IRP 2018 the following week.

The meeting was adjourned.

Integrated Resource Plan 2018 (IRP): public hearings

Energy

24 October 2018

Chairperson: Mr F Majola (ANC)

Meeting Summary

The Committee continued with public hearings on the draft Integrated Resource Plan 2018 (IRP). COSATU, the Truth in Energy Campaign, the Alternative Information Development Centre (AIDC), Mr Paul Lamberth and community members gave submissions.

COSATU rejected the IRP and identified the need for its overhaul with parliamentary oversight. The labour federation argued that the overhauled IRP needed to: halt looting and recover stolen money; have a clear sustainable business model; reduce Eskom debt levels; and facilitate a just transition to protect jobs and the environment. COSATU proposed that there be a comprehensive forensic audit of all of Eskom’s expenditure and those implicated must be charged, arrested, tried, convicted and sentenced and their assets frozen and confiscated. The IRP must be revised to include a serious business model that will stabilise and save Eskom, and the entity must be instructed by government that it cannot increase its debt levels from R400 to R600 billion. Eskom must also be instructed by government that there will be no retrenchments. If there was a need to reduce the head count, then management vacancies could be frozen. COSATU further proposed a sustainable business model linked to the industrial policy action plan (IPAP) and based upon increasing electricity production, and boosting exports to SADC and Africa. This shift would also include integration of biofuel, cogeneration and methane gas, especially for the agricultural sector. Principally, there has to be clear commitments: not to retrench workers but in fact to increase energy jobs by expanding energy production and exports; to renegotiate IPP contracts to reduce the price at which Eskom must buy and sell electricity; and to amend Eskom’s mandate to allow the entity to own and produce renewable energy.

The Truth in Energy Campaign said the draft IRP envisages economic sabotage as it sought to abandon what South Africa has (coal, uranium, thorium) and import what the country does not (technology, minerals, hydro). This could be called ‘criminal’; certainly unpatriotic. He emphasised the need for a rationally balanced energy mix without pre-conceived biases and identified the need for properly conducted SEIA (Social-Economic Impact Assessment). South Africa has a unique resource endowment such that coal, uranium and thorium reserves could last for centuries. On the other hand, ‘renewables’ tech resources are minimal. Minimal wind, hydro. Global long-term energy realities point to inevitability of nuclear dominance. Nuclear is the cleanest, greenest, safest, most unlimited and reliable, and cheapest energy source. Therefore, it must rationally be substantial in the long-term mix. Government must not believe the fake news generated by anti-nuclear sentiment. Nuclear must be delinked from corruption and South Africans deserve to know the truth. The prevailing anti-nuclear propaganda was being funded by vested interests and contrary to global long-term energy realities. Notably, the renewables integration had not been fully costed (internalised costs versus imposed externalities) and relied on preconceived conclusions. Also, the environmental impacts had not been fully quantified.

AIDC was happy to have an IRP that explains the energy plan for South Africa. However, there were a few things it felt need to be addressed. The IRP by now should be providing an urgent plan of shifting from fossil fuels to renewable energy. This would imply or encompass the following: no new coal power plants as not only is coal harmful to the environment through greenhouse gases, but research had proven that it is now much more expensive to produce energy using coal. While on the other hand South Africa as a country has one of the best solar and wind in the world which makes it easier for the building of renewable energy which is cleaner and cheaper. AIDC believed energy is not an end in itself but it speaks to other societal needs which are costs and provision of energy. Hence, taking the cheapest option in this case Renewable Energy will meet people at their point of need energy wise. Phasing out coal should be among the top priorities of the IRP 2018 especially given the fact that climate change demands the ultimate phasing out of greenhouse gas emitters. Coal is slowly becoming a stranded asset such that investments in coal were decreasing. AIDC identified the need for more clarity on the Just Transition. If the IRP was going to talk about Renewable Energy there is need for more clarity on the Just Transition.

Mr Paul Lamberth, in submission, asked whether the IRP, although affiliating with the Energy Mix, does comply with the Energy Policy gazetted in 1998, the Integrated Energy Plan (IEP) revised in 2016, and if was in-line with the 2030 National Development Plan (NDP). The general approach of policy was to recognise challenges, identify causes, find solutions, and implement them based on a plan. To date, every aspect of social and economic intent was being redressed as government sets out on a path of growth, equality, and prosperity. This requires new and decisive thinking more specifically in the energy sector. With the IRP being a decision-making process concerned with the acquisition of least-cost energy resources, taking into account the need to maintain adequate, reliable, safe, and environmentally sound energy services, coal should continue to play a role in electricity generation. However, investments must be made in new and more efficient technologies. Clean coal options such as underground coal gasification must be promoted. Stranded coal reserves, such as the Springbok Flats and others, could also be included. He added that power generation from nuclear ought to play a role in the provision of new clean base-load generation. However, given the long lead-times associated with planning and construction, the New Nuclear Build Program must start now.

Community members said the true costs of negative externalities for the energy choices were not being considered, and this was a serious concern. The environment is being damaged and communities residing close to mining areas were being afflicted by many health conditions owing to the toxins produced by the coal plants. Water sources were also being depleted and polluted by these operations. They suggested that the IRP give emphasis to renewable energies and do away with coal as it was causing untold damage and suffering within coal mining communities.

Members asked for views on the nuclear build programme given all the confusion in the public domain. The Chairperson wanted to know the costs associated with the various energy alternatives. He pointed out that the nuclear energy debate has been shrouded with speculations and unsubstantiated claims. The discussions had to be frank and objective. He asked for views about the ‘no coal, no nuclear’ proclamation by some stakeholders. The Committee would take positions after hearing all submissions from the public.

Meeting report

The Chairperson welcomed everyone to the public hearings on the draft Integrated Resource Plan 2018 (IRP). He invited the submissions from stakeholders and indicated the Committee would take positions after hearing all submissions from the public.

COSATU submission

Mr Matthew Parks, Parliamentary Coordinator, COSATU, welcomed Members’ interest and intervention in such a critical matter and deplored repeated delays in government consultation with workers on IRP and Integrated Energy Plan (IEP) at Nedlac. COSATU was concerned about a number of structural problems in relation to IRPs, such as: major omissions; lack of bold proposals to put Eskom on sound economic model to ensure its survival; IRP admission that 2030 model needs further studies; and outdated Rand Dollar exchange rates. The silence on governance crises especially with Eskom was also cause for concern. Billions were lost to looting through state capture but there appears to be no clear plans to recover stolen money. Further, the impact of decade-long massive tariff hikes on consumers and economy was worrying. The calls of Eskom Chair and Finance Minister to retrench 17 000 to 30 000 workers despite the Presidential Jobs Summit commitment to no state retrenchments was equally worrying.

COSATU therefore proposed that there be a comprehensive forensic audit of all of Eskom’s expenditure and those implicated must be charged, arrested, tried, convicted and sentenced and their assets frozen and confiscated. The IRP must be revised to include a serious business model that will stabilise and save Eskom, and the entity must be instructed by government that it cannot increase its debt levels from R400 to R600 billion. Eskom must also be instructed by government that there will be no retrenchments. If there was a need to reduce the head count, then management vacancies could be frozen. COSATU further proposed a sustainable business model linked to the industrial policy action plan (IPAP) and based upon increasing electricity production, and boosting exports to SADC and Africa. This shift would also include integration of biofuel, cogeneration and methane gas, especially for the agricultural sector. Principally, there has to be clear commitments: not to retrench workers but in fact to increase energy jobs by expanding energy production and exports; to renegotiate IPP contracts to reduce the price at  which Eskom must buy and sell electricity; and to amend Eskom’s mandate to allow the entity to own and produce renewable energy.

In a nutshell, COSATU rejected the IRP and identified the need for its overhaul with parliamentary oversight. The overhauled IRP needed to: halt looting and recover stolen money; have a clear sustainable business model; reduce Eskom debt levels; and facilitate a just transition to protect jobs and the environment.

Discussion

Mr J Esterhuizen (IFP) noted the COSATU recommendation that there be no retrenchments at Eskom. He agreed that the exorbitant performance bonuses paid to the Eskom board was blatant criminality. However, the reality was that Eskom is completely top heavy and some of the positions had to be scrapped.

Mr Parks said Eskom is a large organisation which could not just be let loose. Workers must not pay for the sins of management and politicians. Retrenchments would not solve the challenges at Eskom. The real solution would be to have a sustainable business model with its core aspects as follows: halting the bleeding and looting; renegotiating IPP tariff levels; and addressing the scourge of corruption. He noted that the Eskom headcount was currently less than what it was in 1994.

Submission by Mr Lamberth

Mr Paul Lamberth, Petroleum Engineer, in submission, asked whether the IRP, although affiliating with the Energy Mix, does comply with the Energy Policy gazetted in 1998, the Integrated Energy Plan (IEP) revised in 2016, and if was in-line with the 2030 National Development Plan (NDP). The general approach of policy was to recognise challenges, identify causes, find solutions, and implement them based on a plan. To date, every aspect of social and economic intent was being redressed as government sets out on a path of growth, equality, and prosperity. This requires new and decisive thinking more specifically in the energy sector.

With the IRP being a decision-making process concerned with the acquisition of least-cost energy resources, taking into account the need to maintain adequate, reliable, safe, and environmentally sound energy services, coal should continue to play a role in electricity generation. However, investments must be made in new and more efficient technologies. Clean coal options such as underground coal gasification must be promoted. Stranded coal reserves, such as the Springbok Flats and others, could also be included. He added that power generation from nuclear ought to play a role in the provision of new clean base-load generation. However, given the long lead-times associated with planning and construction, the New Nuclear Build Program must start now.

Mr Lamberth pointed out that natural gas presents the most significant potential for energy supply being the lowest least-cost resource. The use of natural gas in the electricity sector positions it as a viable option of the energy mix – 2026. Therefore local exploration to assess the magnitude of recoverable Shale Gas must be pursued in line with relevant regulations now. A substantiated fact was that there is Natural Gas in the Karoo Basin and the resource requires exploration and the establishment of usable reserve. Shale Gas could be exploited without harm to the environment. Biomass/gas must also play a role in the provision of electricity close to the source. Renewable Energy (RE) such as Solar PV, CSP with storage, and Wind present excellent opportunities to diversify electricity. However, RE is mostly asynchronous and was the least efficient (excluding hydro). Therefore, base-load support is required so as to ensure grid stability. Until these and other challenges are mitigated, sun and wind will remain “a nice to have”. In a nutshell, the energy security is a pre-requisite for achieving economic growth. The development of South Africa’s electricity infrastructure could contribute towards ensuring economic growth and development as envisaged in the 2030 National Development Plan.

Discussion

Ms T Mahambehlala (ANC) asked for Mr Lamberth’s views on the nuclear build programme; given all the confusion in the public domain. Why did he believe government must speed up its implementation?

Mr Lamberth said there was need to find an alternative energy source after the depletion of fossil fuels. Sadly, windmills and solar panels were not going to be an effective alternative to meet future energy requirements. Nuclear energy was a viable alternative as it could be produced safely and cost effectively. There were many examples globally on how to maintain reactors and manage the risks successfully.

Mr Esterhuizen said nuclear might very well be a reliable and clean source of energy, but it is unaffordable. Costs associated with decommissioning and safe storage were too high. Renewable energy was a more viable alternative for South Africa at this stage.

The Chairperson pointed out that the public must not be intimidated into silence. There had to be rationale and informed discussions and people must not be shot down for their views.

Truth in Energy Campaign submission

Mr Leon Louw, Truth in Energy Campaign, said the draft IRP envisages economic sabotage as it sought to abandon what South Africa has (coal, uranium, thorium) and import what the country does not (technology, minerals, hydro). This could be called ‘criminal’; certainly unpatriotic. He emphasised the need for a rationally balanced energy mix without pre-conceived biases and identified the need for properly conducted SEIA (Social-Economic Impact Assessment). South Africa has a unique resource endowment such that coal, uranium and thorium reserves could last for centuries. On the other hand, ‘renewables’ tech resources are minimal. Minimal wind, hydro. Global long-term energy realities point to inevitability of nuclear dominance. Nuclear is the cleanest, greenest, safest, most unlimited and reliable, and cheapest energy source. Therefore, it must rationally be substantial in the long-term mix. Government must not believe the fake news generated by anti-nuclear sentiment. Nuclear must be delinked from corruption and South Africans deserve to know the truth. The prevailing anti-nuclear propaganda was being funded by vested interests and contrary to global long-term energy realities. Notably, the renewables integration had not been fully costed (internalised costs versus imposed externalities) and relied on preconceived conclusions. Also, the environmental impacts had not been fully quantified.

Discussion

The Chairperson wanted to know the costs associated with the various energy alternatives. He pointed out that the nuclear energy debate has been shrouded with speculations and unsubstantiated claims. The discussions had to be frank and objective. He asked for views about the ‘no coal, no nuclear’ proclamation by some stakeholders.

Mr Louw said the country should not put all its eggs in one basket. If the predominant view that coal energy leads to climate change holds; then nuclear energy is the way to go as it is the best form of energy by a wide margin if one believes in global warming. Also, the myth that renewables do not produce any waste is untrue. Solar and wind energy would be by far the most expensive alternative for South Africa. For those not worried about CO2 emissions, the best alternative would be coal. He pointed out that European countries with nuclear in their energy mix have the lowest energy costs, whilst those shifting to renewable energy were experiencing a rise in energy costs. Nuclear is the most affordable option whereas solar and wind are by far the most expensive. The ‘no coal, no nuclear’ proclamation is completely irrational. There is no basis for arguing that there should be neither of the two energy sources.

Alternative Information Development Centre (AIDC) submission

Ms Shumirai Mudavanhu said AIDC was happy to have an IRP that explains the energy plan for South Africa. However, there were a few things it felt need to be addressed. The IRP by now should be providing an urgent plan of shifting from fossil fuels to renewable energy. This would imply or encompass the following: no new coal power plants as not only is coal harmful to the environment through greenhouse gases, but research had proven that it is now much more expensive to produce energy using coal. While on the other hand South Africa as a country has one of the best solar and wind in the world which makes it easier for the building of renewable energy which is cleaner and cheaper. AIDC believed energy is not an end in itself but it speaks to other societal needs which are costs and provision of energy. Hence, taking the cheapest option in this case Renewable Energy will meet people at their point of need energy wise. Phasing out coal should be among the top priorities of the IRP 2018 especially given the fact that climate change demands the ultimate phasing out of greenhouse gas emitters. Coal is slowly becoming a stranded asset such that investments in coal were decreasing.

AIDC identified the need for more clarity on the Just Transition. If the IRP was going to talk about Renewable Energy there is need for more clarity on the Just Transition as follows: the reaffirmation of the option of suitable alternative employment for all workers whose jobs are threatened by the, initially, low carbon but, ultimately, no carbon economy; reskilling as another explicit option for the same affected workers as aforementioned; specific recognition that a major objective of any just transition includes addressing the triple evils of poverty, inequality and unemployment that disfigures society in general; and a guaranteed grant for all workers who cannot be offered acceptable reemployment.

Discussion

Ms Mahambehlala asked if AIDC was aware that South Africa is an energy mixed country. Coal is part of the energy mix and therefore AIDC could not say it should be phased out. Phasing out coal would imply a full blown industrial revolution.

Ms Mudavanhu, in response, pointed out that coal was destroying the very same environment the country was dependent upon and thriving on. Coal energy should be the last resort and a reserve source of energy.

Submissions from community members

The Chairperson opened up the platform to members of the community.

Mr Steenkamp, welcomed the IRP saying it would largely have a positive impact on livelihoods. He asked why coal was being scaled up while the country has a surplus already. The true costs of negative externalities for the energy choices were not being considered, and this was a serious concern. The environment is being damaged and communities residing close to mining areas were being afflicted by many health conditions owing to the toxins produced by the coal plants. Water sources were also being depleted and polluted by these operations. He added that introducing nuclear energy at this stage when the country is still yet to acquire the intellectual capacity and expertise associated with such technologies would imply the outsourcing and importation of skills in the midst of high levels of unemployment in the country.

A community member spoke in Afrikaans [Refer to the audio].

A community member from the North West called for the exclusion of coal from South Africa’s energy mix. Air pollution from big companies was harmful to the health of communities. People should be put first before profits.

A community member from Lephalale, Limpopo, said retaining coal in the energy mix meant communities would pay with their lives owing to the destructive nature of this energy source. Also, climate change was too high a price to pay.

A community member from Soweto suggested that the IRP give emphasis to renewable energies and do away with coal as it was causing untold damage and suffering within coal mining communities. She made reference to the difficult health conditions and social ills that coal mining communities in Mpumalanga are made to put up with. These mines were not even employing people from those communities. Furthermore, electricity tariffs were too high and unaffordable. She deplored that communities’ views were not being taken into consideration in policymaking.

The Chairperson appreciated the submissions and indicated the hearings would continue on Friday. Members’ views will be heard after all submissions from the public are presented before Committee.

The meeting was adjourned.

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