The suitability of the REIPPPP auction process; where local government fits into the Integrated Resource Plan (IRP); the true impact of SSEG on South Africa’s electricity supply industry; and the need for a technology-agonistic plan. These are some of the issues raised at an AMEU/SALGA workshop on municipalities’ response to the draft IRP2023.

The AMEU/SALGA virtual workshop heard from various metros about the specific issues various local governments see as problematic or useful in the draft IRP2023.

AMEU Strategic Advisor Vally Padayachee moderated the workshop, summarising some of the gaps with regards to the current draft IRP2023 which the Association will raise in comments to the DMRE.

Specifically, he questioned where municipalities fit into the proposed plan, especially considering the envisaged move away from providing electricity to an electricity services model as South Africa’s electricity supply industry modernises.

“We do have a crisis at hand, a loadshedding crisis… but we also have an energy crisis. So, there is a gap. We need to incorporate a productive, cost-effective, fit for purpose, balanced energy transition to stop loadshedding and address energy security.

“They’re linked, but that doesn’t mean if you stop loadshedding you have covered energy security. We have to take a no-risk decision to stop loadshedding and to attain long-term energy security.

“If you flood the grid with renewable energy, you make the grid unstable. So we have to bring in other, balanced energies,” reminded Padayachee.

EAF continues to drop

One issue Padayachee described as a “burning platform” is Eskom’s low Energy Availability Factor (EAF), which was 51.7% for week 5 of 2024, and 53.08% the week before. “The reality is, what happens if the EAF does drop [further]?

“And, if it drops, how far?” questioned Padayachee.

He called the problem both ironic and paradoxical: “We’re bringing in new capacity – we need new capacity – while the existing capacity and grid is severely unstable and knackered,” explained the AMEU Strategic Advisor.

“We need to keep the coal fleet performing and the current IRP says we need the EAF to go beyond 70%.”

He sees a role for battery energy storage to mitigate the risk to the grid. But he did qualify his remarks with a call for the AMEU members to workshop ideas for modelling on how to respond should the EAF decline below 50%.

What do the municipalities think of draft IRP2023

Nelson Mandela Bay, City of Cape Town, Johannesburg’s City Power, Ekurhuleni and City of Tshwane all weighed in on what their researchers and analysts have noticed about the draft IRP2023, specifically pointing at issues that would affect their specific regions.

These include:

• Assumptions around the demand growth curve in the new draft differ vastly from those made in the IRP2019, though all assumptions seem too high. Additional information on how this was worked out is required
• Is the sharp increase in power required because of economy growth between 2030 and 2050 realistic?
• Municipalities are highly dependent on Eskom for generation capacity, so a suggestion to include municipal-specific generation capacity in the IRP came through several times.
• The tariff impact of the various scenarios is not included so the question was asked – is the MYPD model still going to be maintained?
• The draft’s appendices include a lot of information which suggests plenty of generation capacity being added in the possible scenario three, but it isn’t enough to close the supply gap. It looks like for every 4kWh added by solar and wind power only 1kWh would go towards closing the supply gap, given the assumed supply and demand profiles. So, more clarity on that is needed.
• Scenarios 1 to 3 do not in any way solve the loadshedding or energy demand issues and negatively affect municipalities. So what use are these first three scenarios then to municipalities? Scenarios 4 and 5 suggest potential to reduce loadshedding, but the interventions are around issues outside of municipal control, so how could local government weigh in to help on any of these?

On the gas side

• The scenarios address dispatchability by suggesting adding 6.2GW of gas capacity but cost implications are not discussed. It substitutes a price stable indigenous resource of coal, with a price volatile one of imported gas, because indigenous gas can be presumed to lag in availability.
• There is a need to fully understand the cost consequences of becoming a gas energy economy. It’s not enough to qualitatively outline various indigenous options.
• Running the OCGTs at high capacity factor is not sensible. But converting these from gas to diesel is not thoroughly explored in the plan either. A key question not even considered is whether the OCGT would have to be shut down completely for conversion. And more importantly, whether that shutdown is short or long.

As for renewables

• An oft-repeated question: Why is the cost of renewable energy technology so high in the underlying assumptions of the draft? Also, what about the cost of back-up of renewable energy technology?
• Is there any attempt to align the various municipal loadshedding mitigation projects? Is anyone summarising these efforts? And what about their decarbonisation efforts – are these being counted in the IRP?
• The IRP should include regional projects – those renewable energy generation capacity projects being advanced by provincial governments.
• Municipalities could access emerging technology solutions through solar PV and energy storage. Has this ever been considered in a programmatic approach?

And what about?

• The new transmission system operator could incentivise energy storage through time-based market signs in Use of System Charges. Would this work?
• Including the cost of externalities should be applauded but there’s no differentiation and the assumptions look low. Like, did the impact of Carbon Border Adjustment Mechanism get considered?
• Shouldn’t there by an NRA standard for emergency electricity situations to depoliticise responses to risk mitigation during emergencies?
• What is the role demand side management could play? Municipalities are starting to see the potential of distributed generation in this regard. But the IRP doesn’t touch on this aspect.
• Plans to decommission coal-fired power stations have a timeline. But no practical or implementable plan is mentioned in the IRP about how their baseload capacity will be replaced.

What next for comments to the draft IRP2023?

Nhlanhla Ngidi, Head of Electricity and Energy at the South African Local Government Association (SALGA) reminded municipal representatives they could deliver their own comment to the DMRE. Still, SALGA will put together a joint report with the AMEU as well.

“I want to elevate that the Grid Capacity Assessment report from Eskom is only reporting the Eskom capacity. We know that we have municipalities with their own grids and capacity. It is vital that municipalities start doing assessments of capacity of their own grids. It’s a reality that the Eskom grid is constrained,” said Ngidi.

A copy of the draft reviewed Integrated Resource Plan is accessible on the DMRE website. Members of the public have until 23 March 2024 to submit written comments for consideration online.

Queries and submissions can be emailed to: [email protected]