Green recovery is SA’S best bet
The government needs to urgently fast-track IRP 2019
ý Despite increased calls that the Covid-19 crisis requires a green economic recovery, and President Cyril Ramaphosa’s commitment to a Just Energy Transition (JET), there remain voices within the government who insist that nuclear be part of SA’S energy mix.
In May this year, the mineral resources & energy department issued a request for information for goods and services involved in a nuclear power programme as part of the government’s plans to expand nuclear capacity within the next five years.
Previous moves to implement additional nuclear plants were considered unaffordable even before the Covid-19 pandemic.
At the same time, the department continues to support coal, despite a global trend of large financial institutions and asset managers globally withdrawing from coal investments. The minister supports what he calls “clean coal”, nuclear and gas.
Many of the country’s coal-fired power stations will need to be decommissioned over the next 20 years. But investment funds for new ones will soon be almost impossible to come by.
Renewable energy, on the other hand, is the fastest-growing energy subsector in the world, a growth which is being fuelled by declining renewable energy costs.
But despite the appetite for renewable investments, renewable developers in SA face policy and regulatory constraints. Industry stakeholders have called for the government to accelerate the implementation of its Integrated Resource Plan 2019 (IRP 2019) as part of the country’s post-covid economic recovery package.
A large renewables-led green stimulus is one of the few substantial recovery opportunities available that doesn’t require any fiscal resources, Meridian Economics MD Grové Steyn said at a recent webinar hosted by the SA Wind Energy Association (Sawea) on the role of wind power in SA’S economic recovery.
Steyn called for political will and policy certainty to push for an accelerated renewables rollout to deliver material economic and social benefits, while bolstering much-needed energy security. Not only will this create immediate economic opportunities, but it will also open up prospects for the domestic manufacturing of renewables components and increase capital expenditure over the period to 2030, which will create thousands of jobs.
The wind sector alone would invest between R300bn and R400bn and create 25,000 construction and operations jobs should the 1,600MW allocation be sustained, said Enertrag SA CEO
Tobias Bischof-niemz, speaking at the same webinar.
But there is an opportunity to increase this green stimulus plan to a yearly allocation of 3,000MW, which would translate the investment value to between R600bn and R800bn, while creating almost 50,000 jobs.
He said jobs would also come from the manufacture of towers, blades, nacelles and gearboxes, in addition to the lion’s share of jobs created by the construction and operation of wind farms.
Despite the mineral resources & energy department’s apparent attachment to clean coal and nuclear, Sawea CEO Ntombifuthi Ntuli says the department needs to implement the IRP in its entirety.
“Wind, solar PV, gas and storage technologies came out in the IRP as the least-cost energy mix. Nuclear and clean coal technologies should not come at the expense of the rest of the IRP. Technically, SA is still in an energy
Ntombifuthi Ntuli: Urging the government to fast-track REIPPP round 5
crisis. Once the economy is back on track, energy demand will once again rise and we’ll be back to the pre-lockdown energy crisis.”
Sawea has been urging the government to fast-track the renewable energy independent power producer procurement (REIPPP) round 5 to close the gaps created by Eskom’s reduced available energy, and the decommissioning plan tabled in the IRP.
“The advantage of rolling out renewables is that it delivers power on time and on budget within 18 to 24 months so it is the most feasible option to close the short-term gap,” says Ntuli.
African Infrastructure Investment Managers (AIIM) CEO Jurie Swart says current and future IRP should focus on providing power at the lowest levelised cost for SA.
“The evidence shows that this solution is likely to be solar and wind, together with a battery solution. We are pragmatic in this regard and believe that it makes sense for gas to be procured as an interim solution, as battery technology and costing improves.
“While we understand that the government is juggling several economic and social demands, we don’t believe that nuclear and coal are technologies that will be competitive in this milieu, and that any research the government pursues will bear this out.”
Like many other investors, AIIM has a policy of not investing in coal or nuclear energy.