As government considers the public comments made on the draft Integrated Resource Plan (IRP) 2023 up to March 23, shareholder activism organisation Just Share has called for a remodel of the policy, with “updated data and correct assumptions”.

The organisation says the draft IRP does not comply with a single one of the aims of an IRP.  

“The draft IRP falls far short of the minimum requirements for a credible and lawful electricity plan. It does not promote energy equity, provide energy security or pay meaningful regard to environmental sustainability,” the organisation highlights.

Just Share climate change engagement director Robyn Hugo elaborates that the draft IRP fails to meet any of the objectives that an IRP in its essence has, owing to its heavy reliance on fossil fuels.

She explains that an IRP specifies the types of energy sources and technologies from which electricity may be generated and indicates the amount of electricity that is to be generated from each source or technology, with the consequences of choices being far-reaching.

“An IRP has a critical bearing on whether South Africa is able to transition justly to a low-carbon, climate-resilient economy and whether the country can attract climate finance and other investment,” Hugo states, adding that an IRP also affects the country’s ability to comply with the National Development Plan 2030 – which seeks to eliminate poverty and reduce inequality by 2030.

The Electricity Regulation Act (ERA) defines the main purpose of an IRP as being to ensure security of electricity supply by balancing supply with demand, while considering the environment and total cost of supply.

Effectively, the IRP should aim to meet three distinct aspirations namely security of supply, affordability and carbon emission reduction.

However, Hugo says the IRP 2023 in its current draft form does not meet any of those objectives, individually or in combination.

For starters, she notes, the IRP does not ensure security of supply for the period 2023 to 2030, since there will be loadshedding until at least 2028. Moreover, the draft IRP relies on “outdated and factually incorrect” cost data and assumptions, and does not present a plan that will result in affordable electricity.

Lastly, the draft IRP will exacerbate climate impacts and severely hinder the country’s ability to achieve its climate commitments, Hugo avers.

“The draft IRP inexplicably reduces the procurement of renewables as compared to the 2019 IRP, and fails to accelerate significant investment in wind and solar photovoltaic technology, as well as battery storage. The draft IRP also intends to ramp up gas procurement and unrealistically counts on improving the performance of Eskom’s ageing and inefficient coal fleet,” she adds.

Just Share argues that the draft IRP fails to recognise that rapid and extensive scaling up of renewable energy generation is the most cost-optimal energy pathway, and affords the best opportunity to provide affordable and reliable energy for all South Africans.

The organisation says the draft IRP also fails to comply with applicable policy or legislation. For example, it does not achieve the aims of the ERA or the National Energy Act, since it does not ensure uninterrupted supply of energy to the country, facilitate universal access to electricity, or facilitate energy access for the improvement of the quality of life.

Just Share states that another significant failing of the draft IRP 2023 is its treatment of legally prescribed minimum emission standards.

Hugo explains that the IRP treats this compliance as an issue to be “balanced” against energy security considerations, when, in fact, compliance with the law is not optional and noncompliant facilities have enormous impacts on human health.

Additionally, none of the draft IRP 2023 scenarios, in terms of greenhouse-gas (GHG) emissions, result in the achievement of net-zero emissions in the electricity sector by 2050, this despite the Low Emission Development Strategy 2050’s economywide goal of net-zero emissions by 2050.

The draft IRP also ignores the country’s Nationally Determined Contribution in terms of the Paris Agreement, which is required to become increasingly ambitious, with an update due in 2025.

CORRECT COURSE

Just Share says the draft IRP should have been developed after, not before, the establishment of the electricity sector’s sectoral emission target (SET).

The SET will be required in terms of the Climate Change Act and must include quantitative and qualitative GHG emission reduction goals for the first five years and the subsequent five to 10 years, as well as for the 10- to 15-year period thereafter.

The draft IRP 2023 assumes that the power sector’s share of the country’s emissions will remain constant at about 44%, or between 160-million and 180-million tonnes, until 2030, which Hugo says is highly unlikely.

It was premature for the draft IRP to have been published without an Integrated Energy Plan (IEP), of which it is a subset.

The National Energy Act provides for an IEP to serve as a guide for energy infrastructure investments.

Hugo explains that the IEP is required to take all viable energy supply options into account and guide the selection of the appropriate technology to meet energy demand.

“The IEP is hugely relevant to the decisions made about South Africa’s electricity future and it should have been published ahead of, and been informed by, the draft IRP,” Hugo emphasises.

SIMILAR SENTIMENT

Just Share’s comments reflect those of other organisations such as the South African Independent Power Producer Association (SAIPPA), the South African Wind Energy Association (SAWEA), Meridian Economics and the Organisation Undoing Tax Abuse (Outa).

SAIPPA has said the IRP 2023 is flawed and inadequate to meet South Africa’s energy challenges, while SAWEA questioned the modelling and assumptions used to determine the lower allocation for wind energy.

Meridian also said there were serious problems with the modelling and cost assumptions used by the Department of Mineral Resources and Energy (DMRE) and said this had resulted in “incorrect and economically damaging conclusions”.

Outa has described the draft IRP as wholly inadequate.

There have been widespread calls for the DMRE to overhaul the draft IRP 2023.