Why should South Africa champion electric vehicles?
South Africa’s industrial, transport, energy, trade and fiscal policies remain heavily geared towards the private automobile and, more specifically, ones powered by the internal combustion engine (ICE).
The Automotive Production and Development Programme, which incentivises the assembly of ICEs locally, remains the centrepiece of government’s industrial policy. The country’s transport strategy is equally supportive of the nation’s 12-million ICE fleet. Fiscally, meanwhile, fuel taxes remain an important revenue stream (over R60-billion in 2017/18) and make up more than 40% of the final pump price. Click to Read Full Article
How should SA approach the procurement of least-cost power?
In the previous Transition Talk column (Engineering News May 17–23, 2019), I explored what it would take to depoliticise the process of drafting a rational Integrated Resource Plan (IRP) for South Africa. Such a plan will outline what investments need to be made in the electricity sector. The next step, which is the topic of this Transition Talk, is to procure the generation assets required in the plan in an efficient manner.
In regulatory terms, where prudence and efficiency are the two key objectives, the IRP stands for prudence (doing the right things), while the implementation of the IRP represents efficiency (doing things right). Click To Read Full Article
As South Africans know all too well, the processes involved in drafting and approving an Integrated Resource Plan (IRP) for electricity are emotive, opaque and highly political. It took nearly ten years to update the initial IRP 2010, despite the fact that the document lost relevance almost from the very day of promulgation, as the country’s electricity reality began diverging materially from the demand and technology-cost assumptions contained in the promulgated document.
Various update attempts fell short, particularly as the technoeconomic outcomes began clashing with the narrow interests of a powerful business and political elite. Even the most recent, comparatively coherent and transparent attempt at finalising an updated IRP (IRP 2018) fell prey to those able to use their political influence to usurp rationality in favour of self-interested lobby groups.
There is a way, however, for South Africa to depoliticise the IRP process and transition to a more transparent, technology-agnostic consultative methodology for determining the best technology mix to procure and, crucially, keep the plan up to date. Click To Read the Full Article.
Previous Transition Talk Columns:
In the previous Transition Talk column, I covered how South Africa’s world-class solar resource, together with falling solar photovoltaic (PV) panel costs, has made rooftop generation an increasingly realistic proposition for factories, shopping malls and high-income households. I also outlined how these small-scale embedded generators (SSEGs) could help with the current supply shortage. In this column, I focus on low-income households and how to make them beneficiaries of the energy transition and of SSEGs.
A portion of the yearly allocation for solar PV in the Integrated Resource Plan (IRP) could be set aside, through a policy adjustment, not only for embedded generation generally, but also for embedded generation from low-income households specifically. Click to Read Full Article
There has been no increase in overall electricity demand since South Africans first began experiencing load-shedding back in 2008. Yet the threat of rotational cuts remains, because of the precipitous decline in the energy availability factor of State-owned power utility Eskom’s coal fleet and the underinvestment in new generation capacity. New generation capacity is required urgently to restore the balance between supply and demand.
Under a steady-state scenario, such new supply would be added in line with Ministerial determinations for the procurement of various generation technologies as directed by an up-to-date Integrated Resources Plan (IRP). South Africa’s electricity supply industry is currently not in a steady state, however. In addition, the immediate supply deficit cannot easily be met through government’s centralised procurement system, as its rigorous processes take several months to complete, during which no construction is possible. Click Here for Full Article
If renewables are so cheap, why are we paying so much for them?
Hardly a week passes without a statement being made about the high costs of renewable energy in South Africa. Typically, the argument is made on social media and is framed to suggest that Eskom is buying electricity at R2.22/kWh from renewable-energy independent power producers (REIPPs) and that this is proof that renewables are much more expensive than other forms of electricity generation.
The proposition is at odds with the alternative narrative of onshore wind and solar photovoltaic (PV) being the cheapest form of new generation. It also conflicts with various analytical reports indicating that a new-build combination of wind, solar and flexible generators represents the least-cost electricity expansion scenario for South Africa.
That such starkly divergent positions are able to coexist is obviously perplexing and is also resulting in a good deal of confusion about what direction South Africa should take with regard to its future electricity investments.
To answer the question about why South Africa is currently paying so much for renewables when they are meant to be cheap, it is important to clear up a few basic facts about domestic renewable-energy costs. Click to Read Full Article
If investment is the goal, what should SA’s electricity game plan be?
South Africa has correctly identified the lack of investment as a serious constraint to economic growth and job creation. President Cyril Ramaphosa has moved to address the problem by reaching out to domestic and foreign investors both informally and through the inaugural Investment Conference, which took place in Johannesburg in October 2018.
Without question, affordable and reliable electricity is a prerequisite for many investors, particularly in areas such as mining and mineral processing, where South Africa has a relative advantage, owing to its natural resources, as well as its well-developed capabilities in extracting, processing and exporting the mineral products. Likewise, the country’s reindustrialisation aspirations, as well as its plans to expand the agricultural and agroprocessing sectors, could well turn not only on security of electricity supply, but also on the pricing of that energy. Read The Full Article
As outlined previously, an electricity system made up of solar photovoltaic (PV) plants, wind farms and flexible generators will employ at least 30% more people than a comparable energy-equivalent coal fleet (see the Transition Talk column in the February 22-28 edition of Engineering News). This net jobs advantage is, however, disguised by the geographically disbursed nature of renewable-energy investments.
When juxtaposed against South Africa’s highly concentrated coal industry, which is located mainly in the northern provinces of Mpumalanga, the Free State and Limpopo, such spatial diffusion presents a serious obstacle in persuading those whose livelihoods are currently inextricably tied to coal to support a clean-energy transition.
The net jobs upside, as well as the health and environmental benefits, of transitioning to a renewables-led system are undoubtedly significant. For the individual coal miner, however, they are not accessible to mitigate the potential loss of income, or the disruption associated with relocating to where the new electricity prospects may be arising. To secure support from such individuals it is, thus, not enough to point only to the positive net employment and environmental effects. They also need to be shown how these positive net effects will directly benefit them, their families and the communities most affected by the changes taking place. Read The Full Article
There is considerable support in South Africa for the notion that a transition in the electricity system from coal to renewable energy will trigger a jobs bloodbath at both Eskom and the Mpumalanga coal mines. The opposition to renewables is underpinned partly by the notion that there are more jobs in coal than in renewables. A detailed analysis of the job numbers, however, suggests quite the opposite. It points to there being at least 30% more jobs in a fleet comprising solar photovoltaic (PV) and wind farms when compared with an energy-equivalent coal fleet. Click to Read Article
That Eskom needs to be restructured is no longer in question. In its current form, the organisation poses a systemic risk to the South African economy and is ‘too big to fail’. The real question is what form this restructuring should take.
Download This Figure: eskom–generation-unbundling-scenario
Govt urged to include IRP adjustment that steers renewables jobs the way of coal regions: http://www.engineeringnews.co.za/article/govt-urged-to-include-irp-adjustment-that-steers-renewables-jobs-the-way-of-coal-regions-2018-10-10/rep_id:4136
Download Presentation: IRP2018 – ENERTRAG – TBN_4Oct2018
LISTEN: Dr Tobias Bischof-Niemz participating in a Classic Business Panel discussion –
Classic Business’ Michael Avery was joined by Dr Tobias Bischof- Niemz, (Director of ENERTRAG SA and the Head of Corporate Business Development at ENERTRAG AG), Chris Yelland, (MD of EE Publishers), Seeralan Chinaboo, (the Deputy Chair of EIUG) & Knox Msebenzi, (MD of NIASA) to Unpack the 2018 IRP.