- South Africa needs between 50GW and 60GW of renewable energy by 2030, according to the climate commission.
- Modelling shows that solar PV and wind are the least cost option for the country’s electricity system, as opposed to new coal or nuclear.
- But government plans to issue a request for proposal for 2 500MW of nuclear, according to Minister Gwede Mantashe.
- For climate change news and analysis, go to News24 Climate Future.
A least-cost option for South Africa’s energy mix includes a massive amount of renewables (between 50GW and 60GW) by 2030 and no new coal and nuclear, the Presidential Climate Commission (PCC) has recommended.
The commission on Thursday made public its recommendations for the country’s electricity system. The recommendations are based on extensive stakeholder consultation, reviewing research and modelling. The recommendations report follows a request from Mineral Resources and Energy Minister Gwede Mantashe for input on the Integrated Resources Plan (IRP), which maps out which technologies energy must be sourced from to meet demand. The IRP is currently under review.
The commission’s head of mitigation, Steve Nicholls, explained that models show the least cost option for South Africa is to roll out renewables, such as solar and wind (about 8GW to 9GW per year), that are supported by storage (this is batteries or pumped hydro plants) and peaking power sources like gas (between 3GW and 5GW). These peaking plants would also be operated at a low level and not all the time.
“None of the models build new coal or nuclear or have gas at high utilisations,” the PCC report read.
Even without considering climate commitments to reduce emissions – the least-cost electricity system that models select is renewables, storage and peaking support, Nicholls emphasised.
None of the models, including the IRP2019 least-cost scenario, build new coal or nuclear, even though these are technology options within the models. This is because these technologies are not the least cost options.
– Recommendations from the PCC on South Africa’s Electricity System report
Nicholls added that low-carbon technologies like nuclear and carbon capture storage used in conjunction with coal to reduce emissions, are still not selected by models as a least cost option.
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But this contrasts with the views of Mineral Resources and Energy Minister Gwede Mantashe, who promotes the use of carbon capture and storage technology to continue reliance on coal, as well as nuclear.
Mantashe, at an energy conference in May, said a request for proposal for 2 500MW of nuclear power would be issued. Mantashe said:
We need nuclear. We have Koeberg. We must increase that capacity.
Mantashe also asserted that nuclear was the lowest-cost energy in the country, at 40c a unit.
“We have heard some public statements that nuclear is cheaper than variable renewable energy. We can’t find any reference for that in the international literature,” Nicholls told News24 in response to questions.
Traditional large-scale nuclear plants – like Koeberg – take a long time to build and are capital intensive, despite the cost per kWh or unit of electricity, he added.
Small modular reactors (SMR), or small-scale projects, are also an emerging technology which civil rights organisation AfriForum is looking into addressing load shedding. But questions remain on its commercial viability.
“There we exercise caution because those technologies don’t really exist commercially,” said Nicholls. There are some pilot SMRs in the US and China – but there are no commercially operating entities at the moment, he explained. “That is not a technology available today that you can start to roll out at a reasonable cost,” he added.
Another idea being touted by Rosatom, Russia’s state atomic company, is nuclear barges. These are essentially nuclear reactors on barges or ships. Nicholls also expressed little confidence in this. These can’t be deployed in the short term, and these projects would be less than 100MW – not enough to address our immediate energy challenges, he explained.
Apart from the question of affordability, Nicholls said it is important to ask whether we should include small nuclear reactors in energy planning – when we are not sure of their commercial viability.
“None of those are happening in the next five years,” he said.
As for coal, new coal-fired power is more expensive than renewables, the PCC indicated.
“… If one adds coal to the least cost energy mix, the cost of electricity increases,” the report read. “…New coal-fired power is simply not financeable.”
It also warned that continuing to invest in coal would pose other risks to the economy, such as climate change, air pollution and reduced competitiveness of our exports due to their high carbon content, which will be penalised with border taxes and will negatively impact the country’s ability to raise finance.
“Capital markets are increasingly concerned with climate change and will not provide capital to industries that are not aligned with the climate transition. Many South African lenders and banks have policies that prohibit investment in new coal,” the report read.
Including gas also adds to the cost of electricity – which is why it must be limited purely to meeting energy demand during peak times.
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Load shedding
When it comes to addressing the electricity crisis in the short term, the PCC also holds to its recommendation that the “least cost, no-regret option” is still renewables, batteries, and peaking plants like gas.
“Not only are these the cheapest, secure options, but they are also the only options with build times short enough to make a meaningful impact on load shedding,” the PCC said.
These technologies would also attract the best finance terms.
The PCC also acknowledged that some stakeholders, the Department of Mineral Resources and Energy (DMRE), in particular are concerned that renewables like solar PV and wind will not be reliable or ensure a secure electricity supply.
Stakeholders also raise concerns about whether it will ensure affordable electricity. The PCC said that local and international studies indicate that renewable energy systems, if well managed, are still a secure and least cost option.
Additionally, if we add the 50GW to 60GW of renewables, it would also create space and stability on the system to decommission 12GW of coal power stations as they reach the end of their life, according to the PCC.
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Another concern is the impact of the transition on the coal value chain, which many people and communities depend on. Mantashe has also been vocal about this and has cautioned against a rushed transition.
The PCC acknowledges that the shift to renewables does require protecting workers and communities, which is why a just transition is important.
The PCC’s executive director Crispian Olver said that the commission has an advisory role, which means its recommendations are not prescriptive to government. Olver added that the recommendations have been sent to the president’s office, which has forwarded this on to the National Energy Crisis Committee as well as Cabinet. The PCC also sent the report to Mantashe, who initially requested it.
There has not yet been any formal response from government. Olver noted that in a previous meeting with President Cyril Ramaphosa, he indicated government would take the recommendations seriously and study them.
Olver does not expect there to be complete agreement on the recommendations within government. “But we do think there are areas in which we can converge. Some issues may not reach full agreement. But there are others where it may be relatively easy to get on the same page,” he said.
These areas of agreement include upgrading and expanding the grid, as well as the use of wind, solar, batteries and peaking power to address the energy crisis in the short term.
The DMRE is yet to release the revised IRP for public comment.
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