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No further IRP consultations as Cabinet approves plan and 27 renewables projects

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No further IRP consultations as Cabinet approves plan and 27 renewables projects

Energy Minister David Mahlobo

7th December 2017

By: Terence Creamer
Creamer Media Editor

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Energy Minister David Mahlobo reported on Thursday that Cabinet approved an updated Integrated Resource Plan (IRP) for electricity during a marathon 12-hour meeting on Wednesday and that the new plan would be published without any further public consultation.

Briefing the media at an ‘Energy Indaba’ convened by the Department of Energy (DoE), Mahlobo said the updated plan had retained the relative contributions of each of the generation technologies included in the IRP 2010. However, the mix had been adjusted for a lower demand forecast.

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Therefore, while the proportional contributions of each technology remained in line with the 2010 plan, the capacity allocated to coal, solar, wind, hydro and nuclear had been reduced. “The percentages have not changed . . . the only thing we are changing is the volume,” Mahlobo explained.

“We will no longer have 9.6 GW of new nuclear, it has come down,” Mahlobo said, adding that the full details would be available when the document was published.

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He insisted, too, that the updated IRP had been fully consulted during hearings held in the first quarter of 2017 and through the opportunity created by the DoE to make written submissions on the draft IRP Base Case, which was published in November 2016.

The new IRP would guide investment decisions, but was not government policy and did not stipulate the financial model. Government policy, the Minister insisted, was for an energy mix, while the financial model would be determined through competitive bidding.

The publication of the updated IRP also did not imply that government was ready to pull the trigger on any new procurement programmes. These, Mahlobo said, would be guided by a “mantra of pace, scale, affordability and environmental responsiveness”.

Nevertheless, the publishing of an IRP in the absence of further consultation is likely to be heavily criticised, particularly in light of the suspicions of some civil society groups that Mahlobo was intent on rushing ahead with a nuclear procurement programme. These suspicions were behind heavy criticism of the Energy Indaba, which was seen as a possible way of fast-tracking further consultation on the plan.

Ahead of the indaba, Mahlobo met with several nongovernmental organisations, where he indicated that there was no intention to address the IRP at the gathering.

The Minister also announced that he had signed off on the procurement of 27 outstanding renewable energy projects and had received the concurrence of Public Enterprises Minister Lynne Brown for Eskom's conclusion of power purchase agreements (PPAs).

The projects, which have been stalled since 2015, would facilitate R55-billion-worth of direct investment. It also appears that the price cap of 77c/KWh outlined by Mahlobo’s predecessor, Mmamoloko Kubayi in September, had not been enforced.

“I will not get into the contract matter, the rands and cents, but I can tell you that they have managed to find each other,” Mahlobo said.

He indicated that the PPAs should be signed during the course of next week.

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