Load shedding, rising tariffs will push consumers off the grid
This is contained in the long overdue 2019 Integrated Resource Plan for Electricity (IRP2019), which was gazetted on Friday.
The revised plan, which maps out SA’s future energy sources including coal, nuclear and renewable energy for the next decade, acknowledges that as wholesale and retail electricity tariffs rise, more electricity users will ditch Eskom to meet their energy needs.
“We can expect more electricity users to look for alternatives like rooftop PV (photovoltaic) systems (residential) or utility scale PV generation (mines and other big industrial users) and migrate away from the electricity grid,” the IRP2019, which was approved by the cabinet this week, states.
“More fuel switching is to be expected, particularly in regard to the thermal load (water heating, cooking and space heating) as electricity tariffs increase and alternatives like LP gas become available and cost effective.”
Non-technical losses, from electricity theft and “other problems not related to grid technicalities”, are increasing at municipal level.
“At a certain point the willingness-to-pay threshold is breached for more and more municipal customers and they either actively pursue alternative sources to meet their energy demand, or they stop paying for the electricity service. We can expect the electricity disruptions, driven by load shedding or poor quality of supply, and high tariffs to drive the willingness to pay threshold even further.”
The IRP2019 notes how requests by industrial and commercial electricity users to deviate from the IRP and to develop their own generation “exemplify this trend”.
“While at this stage it’s not quantified, most residential estates, commercial parks and shopping centres have installed PV systems to supplement grid supply,” the document states.
On the role of Eskom, the IRP2019 states how Eskom has played a crucial role as the dominant utility at all levels of the electricity value chain until now.
“With the 2019 decision to unbundle Eskom, their role is expected to change once the generation, transmission and distribution functions are separated.”
The IRP2019 is based on the “least-cost electricity supply and demand balance, taking into account security of supply and the environment (minimise negative emissions and water usage)”.
The plan says additional capacity until 2030 will feature 1500megawatts from coal, 2500MW from hydro, 6000MW from photovoltaic, 14400MW from wind, 2800MW from storage and 3000MW from gas.
“By 2030, South Africa’s coal-based generation will have fallen to 33 847MW, while clean energy such as solar, wind and gas will have increased by a total of 330%,” said the African Energy Chamber, in a statement, “saluting” the energy blueprint.
The SA Renewable Energy Council, too, hailed the IRP.
“The IRP is welcomed at a time when SA is once again experiencing load shedding. Renewable energy technologies can provide the solutions to Eskom in avoiding such great challenges facing our economy."
While the plan supports a diversified energy mix, coal will remain the dominant energy supply contributing 59% of the energy volumes to meet demand “as the country has the resource in abundance”.
New investments will need to be made in more efficient coal technologies to “comply with climate and environmental requirements”, according to the IRP2019.
“We are cautioning those who are saying coal is coming to an end. We have 16 power stations that are coal-fired. That is the reality of today,” Minister of Mineral Resources and Energy Gwede Mantashe said yesterday.
There must be a just transition towards less carbon-emitting technologies, he said. But environmental justice organisations slammed the inclusion of new coal in the IRP2019, describing it as a clear violation of the Constitution.
“The Life After Coal Campaign and Greenpeace Africa are appalled to note that the new IRP forces in 1500MW of dangerous, expensive, and unnecessary new coal-based electricity: 750MW in 2023 and another 750MW in 2027. This is an addition of 500MW since the last draft made available to the public in August last year.”
The organisations state how the intensifying climate strikes and UN Secretary General’s Antonio Guterres’ repeated appeal for “no new coal power plants after 2020” serve as a stark warning to SA.
“The reduction of greenhouse gas emissions must be prioritised if we are to have any hope of addressing the existential threat of climate change. The president promised action to address the climate crisis, but this final IRP suggests that this promise was empty.
"The new IRP wilfully ignores all evidence that there is absolutely no need for new coal in the future electricity mix - it does not form part of a least-cost electricity plan for South Africa.”
The wrong version of the IRP2019 was erroneously gazetted. The corrected Cabinet-approved version was due to be re-gazetted on Friday night.