Mother of energy square-off looming
THE mother of all political battles is about to consume Parliament as Energy Minister Tina Joemat-Pettersson and the portfolio committee on energy square off over the release of “sensitive” documents pertaining to nuclear procurement.
That procurement is set to begin by the end of the month, with the publication of a request for proposals in terms of which prospective nuclear vendors will begin the first phase of the bid process by setting out what they are able to supply and at what price.
But Parliament has yet to see, let alone discuss, numerous documents that for med part of the department’s preparatory work on the nuclearbuild project, including studies it commissioned on financing options, costs of waste disposal and feasibility.
The minister has refused to make these available on the grounds that they are “sensitive” and could jeopardise the procurement process. Yet the constitution demands transparency in public procurement to ensure cost-effectiveness and fairness.
Joemat-Pettersson is also facing a legal challenge by Earthlife Africa and the Southern Africa Faith Communities Environment Institute, which seeks to set aside a 2013 determination in favour of nuclear on the grounds that there was no proper consultation process.
The NGOs are also challenging the tabling in Parliament of intergovernmental agreements on nuclear co-operation with Russia, the US and South Korea on the grounds that the manner in which they were tabled didn’t allow for Parliament to consider them in a formal process.
The deter mination of which electricity-generation technologies are to be built and in what proportion is a power vested in the energy minister and must be made in terms of an Integrated Resource Plan (IRP).
This sets out the desired energy-mix based on considerations of cost and projected demand, among others. But the 2013 determination on nuclear was based on an IRP that has not been updated since 2010, despite a significantly altered economic landscape and huge shifts in the relative costs of various technologies, especially renewables.
The cabinet is committed to finalising the long-delayed revised IRP (it is supposed to be updated every two years) before the end of the year.
But in the meantime, the procurement process is about to begin, before the country, and Parliament, have had sight of the plan and its assumptions about economic growth, relative costs of generation tech- nologies and projected electricity demand.
Parliament got a glimpse of what may be contained in the revised IRP on Tuesday, when Energy Department dep- uty director-general for policy, planning and clean energy Omphi Aphane presented the government’s Integrated Energy Plan.
It is intended to serve as the overarching blueprint for the country’s energy future, incorporating each sector in the field including electricity, liquid fuels and gas.
Each of these sectors has its own plan, which in the case of electricity is the IRP, and they are supposed to inform one another, guided by the Integrated Energy Plan.
Unlike the IRP, however, implementation of the Integrated Energy Plan is not mandatory. But it does provide an insight into the government’s thinking on economic growth and projected electricity demand.
This is in addition to the other policy considerations – such as localisation and job creation – that will inform its choices.
Because the plan is not binding, Aphane enjoyed a relatively easy ride as he explained the various scenarios that had been modelled by the department.
The model could examine, for example, what the impact on job creation would be if, instead of the target of one million household solar-water heaters, the government installed 10 million by 2050, as well as what this would mean for the cost per unit of electricity and overall demand.
Interestingly, the department had modelled an energy-mix free of new nuclear capacity, Aphane said, and, according to the graphs in his presentation, this would increase localisation potential and job creation – both of which are frequently touted as benefits of the proposed nuclear-build programme.
But it was when he got to the economic growth and electricity demand projections that Aphane ran into choppy waters.
Why, MPs wanted to know, did the Integrated Energy Plan make use of 2014 Treasury projections for economic growth, when these had subsequently been proved hopelessly optimistic?
The projection for this year contained in the 2014 Budget was for growth of between 2.3 percent and 3.7 percent and between 2.5 percent with 4 percent next year, compared to the latest International Monetary Fund expectations of 0.1 percent GDP growth this year and 1.1 percent next year.
This would surely result in a very different demand picture and, consequently, the need or otherwise for nuclear, MPs suggested.
Aphane said the model was able to cater for any “sensitivities”, including a different GDP-growth scenario.
In any case “you can’t plan for 0 percent growth”, he said.
The committee chairman Fikile Majola accepted this explanation in the interim, but said Parliament would need to have sight of precise figures when the time came for “decisions”.