More power, less politics

After a six-year delay, the government released the Integrated Resource Plan (IRP), its long-term energy plan, last week. Given the difficulties, delays and lack of political courage that former ministers have suffered, mineral resources & energy minister Gwede Mantashe deserves some credit.

The plan maps out how SA will meet its energy needs by 2030. Coal is expected to account for 43% of installed capacity, wind and solar power for 33%. This means the government will seek to procure from the private sector or build the generation capacity through Eskom to meet supply.

This is a substantial change. At present coal generates almost 90% of energy, with only 5% coming from renewable energy and the remainder from Koeberg’s nuclear plant. The proposed energy mix will be cleaner and cheaper than it would have been on such a coal-intensive path, because renewable energy is now the cheapest new form of generation.

The plan moves SA in the right direction and takes account of the rapid technological development in the sector, as well as the urgent need to take climate change into account. But even though Mantashe took a giant six-year leap, he did not quite manage to leave behind the politics that has been dogging energy policy.

The first problem is the inclusion of two big new coal energy procurements, one in 2023 and one in 2027. As the plan seeks to model the best and least-cost way of producing energy, coal emerges in the mix only due to artificial constraints placed on the amount of renewable energy that can be procured. The inclusion of new coal, therefore, looks like a political nod to trade unions.

The second political move was Mantashe’s refusal to do the most obvious thing while gazetting the IRP: announce the procurement of new generating capacity. The IRP points out that SA faces a four-year power gap in which it will be unable to meet its energy needs. As this will necessitate burning diesel to keep the lights on, prices will rise even further. Other options mooted by the department of energy, such as buying a power ship, are even more costly.

The quickest way to get more megawatts onto the grid is to free up the environment for private entities — businesses, farmers and industry — to build their own projects. At the moment, projects of 1MW-10MW require licensing. To shortcut this process requires an intervention from Mantashe to amend the Electricity Regulation Act and replace licensing with a streamlined registration process.

Second, Mantashe needs to kick-start the procurement of a new round of renewable energy from independent power producers. Renewable energy is the quickest form of capacity to construct. If this is done urgently, the four-year power gap could be shortened by two years. But Mantashe, on principle, does not want to be rushed. Asked when he planned the next bid window for projects, the minister scolded the journalist for “running ahead” and wanting to force him into a situation where he must pit renewable energy against coal.

So while the minister has moved SA forward by drawing a road map, actual decisions that would have the effect of bringing more private-sector players in are just a bridge too far.

The government undoubtedly has a difficult path ahead in negotiating our joint future with a world less dependent on carbon. The people to be most affected by this transition — mineworkers, power-station staff and the communities around these nodes of economic activity — are largely black, poor and vulnerable.

The IRP does take note of the need for a “just transition”, and as a cleaner, less carbon-intense future is in all our interests, that is something society including business, should strongly support. But the need to coax the unions along on the energy transition is not grounds for Mantashe to hang back from making new announcements to procure energy and free up the market.

Securing energy supply through new capacity as soon as possible is in everybody’s interest. It should not be a political matter.

THE QUICKEST WAY TO GET MORE MEGAWATTS ONTO THE GRID IS TO FREE UP ... PRIVATE ENTITIES