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.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.