Task team tells public hearings of artificial constraints on how much renewable energy can be built, leaving lowest-cost option off the table.
A panel of experts appointed by Energy Minister Tina
Joemat-Pettersson told public hearings on the Integrated Resource Plan
(IRP) in Ekurhuleni on Wednesday that their advice had been ignored to
force nuclear energy into the plan.
A task team for the 40-strong panel, which was headed by Mike
Levington, says that the Department of Energy’s decision to impose
artificial constraints on how much renewable energy can be built — as
well as the use of outdated prices — had allowed nuclear energy into the
model.
The result of this distortion was that the IRP, which will determine
SA’s future energy mix, did not recommend the lowest-cost option for the
generation of electricity in the long term. A lowest-cost option, said
Levington, would not include nuclear in the plan, which projects energy
needs until 2050.
Instead, the "base case" of the IRP 2016 suggests that new nuclear
energy will be required by 2037 — 15 years later than was expected under
the 2010 IRP — and that, by 2050, SA will need an additional 20GW of
nuclear power.
But, say the experts, placing artificial constraints on
any of the technologies is an incorrect application of the principles
that should underlie the IRP.
"The least-cost base case, without any constraints, should be the base case. The constraints can then be applied to the base case as a scenario, but these should be costed and made public," said Levington.
Criticism of the pricing used and the rationale behind the constraints placed on renewable energy were a recurring theme throughout the day’s hearings.
The latest bids from the renewable energy independent power producers programme, which are still to be publicly announced, have seen prices drop to R0.62 for wind and R0.82 for solar photovoltaic (PV) while new coal-generation prices are R1.03.
However, IRP 2016 uses R0.81 for wind, R0.86 for solar PV and R0.93 for coal. Costs for concentrated solar power used in the IRP are also significantly more expensive than those achieved in the market.
"The least-cost base case, without any constraints, should be the base case. The constraints can then be applied to the base case as a scenario, but these should be costed and made public," said Levington.
Criticism of the pricing used and the rationale behind the constraints placed on renewable energy were a recurring theme throughout the day’s hearings.
The latest bids from the renewable energy independent power producers programme, which are still to be publicly announced, have seen prices drop to R0.62 for wind and R0.82 for solar photovoltaic (PV) while new coal-generation prices are R1.03.
However, IRP 2016 uses R0.81 for wind, R0.86 for solar PV and R0.93 for coal. Costs for concentrated solar power used in the IRP are also significantly more expensive than those achieved in the market.
Tobias Bischof-Niemz, the head of energy at the Council
for Scientific and Industrial Research (CSIR), said the distortions were
significant.
Bischof-Niemz’s research unit has run the same model used by the Department of Energy, free of constraints, using the latest prices in the market.
"We know with very high certainty that new solar and wind are 40% cheaper than coal. The IRP assumes a very high cost of wind and solar in relation to coal," he said. There was "no technical justification in the IRP documents for such constraints. This has a huge impact on the model’s outcome and there is no explanation of it."
While the price paths of the various technologies in combination are missing from the IRP, Bischof-Niemz said his calculations showed, under the IRP base case, the cost of producing energy in 2050 would be R580bn a year. Under the CSIR model it was R490bn a year.
Bischof-Niemz’s research unit has run the same model used by the Department of Energy, free of constraints, using the latest prices in the market.
"We know with very high certainty that new solar and wind are 40% cheaper than coal. The IRP assumes a very high cost of wind and solar in relation to coal," he said. There was "no technical justification in the IRP documents for such constraints. This has a huge impact on the model’s outcome and there is no explanation of it."
While the price paths of the various technologies in combination are missing from the IRP, Bischof-Niemz said his calculations showed, under the IRP base case, the cost of producing energy in 2050 would be R580bn a year. Under the CSIR model it was R490bn a year.
Tina Joemat-Pettersson supports a third scenario, which brings the need for nuclear energy closer to 2027
While the main debate of the day was between the base
case and an unconstrained model that is favoured by the ministerial
advisory council, Joemat-Pettersson supports a third scenario, which
brings the need for nuclear energy closer to 2027 and necessitates the
start of nuclear procurement.
In an article last week,
Joemat-Pettersson supported the argument of Eskom interim CE Matshela
Koko that the prevailing scenario should include a carbon budget, as
well as constrained renewable energy.
This, she said, was "the most likely scenario" to prevail.
In
response to the criticisms raised, Department of Energy deputy
director-general Ompi Aphane said the department would consider
publishing a least-cost base case on the basis of submissions made. It
would also confer with Joemat-Pettersson over the tight deadlines for
public consultation on the plan, an issue raised in numerous
presentations.
Aphane said the constraints on renewable energy
were imposed due to the difficulty of connecting renewables to the grid —
not to favour one technology or another.
A range of stakeholders appealed to the department to extend the consultation process until the end of March.
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