Category Archives: DoE

Mike musings: short term plans and long term consequences

Engineering News, 15 February, 2017.

by Mike Rycoft, features editor, EE Publishers

The great event of the 2016, namely the publication of the IRP 2016, has finally happened, and the plan has received both praise and criticism from many quarters. The media briefing went into some detail of how the plan was constructed and all the factors taken into account. Without discussing the plan itself, I would like to consider the complexity of compiling such a plan, which runs up until 2050, some 33 years in the future. One could ask why it is necessary to look so far into the future, as uncertainty increases with time. In fact one commentator made the statement that the only certainty in long term planning is the laws of science. The construction of such a plan must be a daunting task, as both over- and under-provision are equally critical.

Long term planning for demand and capacity has come under question in the last year, and the current popular opinion is that as we cannot predict demand in the long term and should change our plans to follow short term trends. Thinking seems to favour short term plans that could follow demand more closely, and which would be based on smaller distributed generation plant close to load centres rather than large centralised units. This is probably influenced by the experience of Medupi and other large systems…

Here is the full article

South Africa: Integrated Resource Plan clear for Q3

ESI Africa, 15 February, 2017.

On Tuesday, an official from the department of energy said that the Integrated Resource Plan (IRP) should be confirmed in Q3 2017.

Engineering News reported that the IRP finalisation is dependent on Cabinet’s reception of the energy blueprint.

According to the DoE’s director general, Ompi Aphane: “It will not be before June this year, but it might be by July, August. But then if Cabinet says go back and consult more, then that is in the hands of Cabinet.”

Integrated Resource Plan under review

Addressing parliament’s portfolio committee on energy, Aphane said the department had received 63 presentations in nine public meetings — one in each province — since the draft plan was tabled, along with the draft Integrated Energy Plan, Engineering News reported.

The department of energy’s Jacob Mbele said: “Based on the outputs from these committees they were able to include externalities that were not there in the first drafts.”

Media reported that energy experts, including a ministerial advisory committee, have maintained the cheapest energy mix would not include building more nuclear reactors.

“Once we have taken all inputs from the public participation process into account the base case scenario will look different,” Aphane said.

Outlining the IRP

In November 2016, South African energy minister, Tina Joemat-Pettersson, delivered a speech outlining the Integrated Energy Plan (IEP) and Integrated Resource Plan (IRP) processes, including a reflection on the key aspects of the processes.

Joemat-Pettersson explained: “Since the promulgation of the IRP 2010-30 there has been a number of developments in the energy sector, the country and the region, which necessitate that we review and update the plan.

“Some of the developments or changes includes, additional capacity that has come online, demand lower than envisaged in IRP 2010-30, draught in neighbouring countries experiencing resulting electricity shortage, reduced Eskom plant performance and changes in technology costs.”

She added: “The IRP update process is different from the IRP 2010-30 development processes in a sense that the update process is not zero based but use the from the promulgated policy adjusted IRP 2010-30 as a reference point.

(Ed. note: This is ominous! So if the IRP2010 was flawed, which it patently was – energy demand much too high, unbalanced cost assumptions – then our minister aims to continue with the flawed basis. )

“The IRP development and update process as in the case of the IEP aims to balance similar objectives which are; security of supply, cost of electricity, job creation and localisation, minimal negative environmental impact, minimal water usage, to diversity of supply sources (energy mix) and promotion of energy access.

“Against these objectives the Department set four key milestones in regard to the development of the IRP, which are (1) settling the key assumptions, (2) developing a Base-Case, (3) modeling and analysing the Scenarios and sensitivities, and finally (4) developing the final plan taking into account the various scenarios and policy positions.”

(Ed. note: Also dangerous. If the base case has 9 600 MW of nuclear forced in, and scenarios and sensitivities don’t include a completely unconstrained case – allowing unlimited nuclear and renewable energy – we might never see the true savings to be made by going the renewable energy route rather than the forced nuclear route.)

The IRP 2016 update was welcomed by industry with comments from the South African Independent Power Producer Association (SAIPPA), the South African Photovoltaic Industry Association (SAPVIA) and the South African Renewable Energy Council (SAREC).

 

Here’s the link to the article

Eskom renewables impasse over

BusinessDay, 13 February, 2017.

Eskom caused alarm in the sector in July 2016 when it said it would not sign on any more IPPs to the grid because of concerns about affordability

The deadlock between Eskom and independent power producers (IPPs) appears to have broken, with several IPPs having received budget quotes from the power utility indicating what the cost will be of connecting them to the grid.

(EG-SA Ed. note: Great news!
Now Eskom must be made to compensate the IPPs who suffered losses because of the unnecessary delays to financial closure.
Also Lynne Brown representing the DPE (sole shareholder of Eskom), must be held responsible for the cost of the delays and the damage to the renewable energy industry, and Koko must go before he does further damage.)

The quotes preceded President Jacob Zuma’s undertaking in his state of the nation address that Eskom would sign the outstanding power purchase agreements for renewable energy in line with the procured rounds. Eskom caused alarm in the sector in July 2016 when it said it would not sign on any more IPPs to the grid because of concerns about affordability.

On Friday, South African Renewable Energy Council (Sarec) chairwoman Brenda Martin said she had been informed about the budget quotes sent out.

She had also learnt that Eskom had approached the IPP office in the Department of Energy to set dates for the signing of power purchase agreements with the producers.

“So it does look as if things are moving,” she said.

Martin said the budget quotes had been sent to IPPs regardless of the agreed tariff at which they would sell electricity to Eskom. This is despite Eskom’s insistence it would sign them up only to a price of 62c/kWh.

A total of 21 of the 37 IPPs with outstanding power purchase agreements received budget quotes. This included the 10 small bid winners announced two weeks ago. Martin said Sarec’s remaining concern was that all the bidders get their budget quotes confirmed.

On Friday, Eskom spokesman Khulu Phasiwe said 2,383MW of renewable power purchase agreements — about 37 — remained to be signed. To date, Eskom had signed 64 agreements for 4,000MW and two for open-cycle turbines for more than 1,000MW.

Phasiwe said the unsigned agreements had been approved by the investment and finance committee of the Eskom board and by Public Enterprises Minister Lynne Brown. The National Energy Regulator of SA had provided the necessary assurances for cost recovery of the power purchase agreements.

Mitochondria Energy chairman Sisa Njikelana was optimistic about the deadlock being broken. Hulisani executive director Marubini Raphulu said Zuma’s comments indicated the impasse had been resolved.

“Eskom’s primary objective has always been to deliver reliable energy supply at the least cost to the consumer,” Phasiwe said. “Eskom’s position is that all energy sources, be they nuclear or renewables, should be pursued at a pace and scale that the country can afford.”

Here is the link to the article

GroundUp: Eskom will not oppose anti-nuke deal litigation

Groundup, Daily Maverick, 6 February, 2017.

Litigants say making Eskom the nuclear procurer raises serious questions about the financial implications and price of electricity, and should have been open to public scrutiny. The court ordered a postponement to February 22 to allow litigants to examine new developments. By Melanie Gosling for GROUNDUP.

First published by GroundUp

Eskom will not oppose court action challenging the legality of government decisions around the procurement process for a fleet of new nuclear reactors. The utility said in papers filed in the Western Cape High Court that it would abide by the court’s decision in this matter.

This is the latest development in court action by NGOs Earthlife Africa and the Southern African Faith Communities’ Environment Institute, which are taking the government to court over what they claim are unlawful decisions around the nuclear procurement process.

Eskom’s decision not to enter the legal fray comes after it was added as a respondent in the court proceedings last week. This was done after Cabinet had decided during court proceedings late last year that Eskom, not the Department of Energy, would now be in charge of procuring new nukes.

Litigants learned about this change at the hearing on December 13 when the government’s legal team told the court that Energy Minister Tina Joemat-Pettersson had made a new determination under the Electricity Regulation Act, designating Eskom as the procurer of the 9600MW of new nuclear plants, “making the utility responsible for the largest procurement in South Africa’s history”, papers said.

Litigants say making Eskom the nuclear procurer raises serious questions about the financial implications and price of electricity, and should have been open to public scrutiny. The court ordered a postponement to February 22 to allow litigants to examine this new development.

Although both NGOs are anti-nuclear, they are not asking the court to decide on the merits of nuclear power, nor whether South Africa needs it, but whether government’s decisions around the nuclear procurement programme are lawful and in keeping with the Constitution, and whether the South African public, part of a participatory democracy, should have been allowed to make representations on the nuclear procurement process.

Here is the full article

Op-Ed: Impasse in renewable energy procurement – a political power play

Greg Austin, Daily Maverick, 7 February, 2017.

While it has been interesting to see the level of debate around the price of electricity, much of this is mere noise and overlooks the fundamental questions of how we supply our future energy needs at the lowest cost, in the cleanest fashion, and with the greatest economic development benefits possible. By GREG AUSTIN.

The current impasse related to renewable energy procurement under the Renewable Energy Independent Power Producer (REIPP) programme, blocked by Eskom since August 2016, is political theatre that is highly detrimental to South Africa’s immediate and future economic health. Immediate, as it relates to foreign direct investment into our economy, and longer term because the country’s flagship programme being stalled at the behest of the mandated buyer of the renewable electricity (Eskom), could put the final nail into our ratings downgrade coffin.

Let alone diversifying our electricity supply mix for the long-term future while keeping abreast with the latest in generation technologies. We certainly started in the right direction: in 2014, investment into renewables in South Africa accounted for 84% of all foreign direct investment; in 2016, this had dwindled to close to zero. It’s a shambles and a disgrace.

The illegality of Eskom’s refusal to sign the Power Purchase Agreements (PPAs) with the renewable generators, while clear to those in the industry, is now laid bare for all to see by the recent legal opinion which states, unequivocally, that Eskom is bound by law to comply with the Department of Energy’s REIPP RFP and the subsequent awarding of projects to so-called preferred bidders from Rounds 4 and 4.5 of the REIPPP with whom it has to sign the agreements.

Were Eskom and their government shareholder to simply obey the law, the REIPP procurement process – together with its associated profound economic and socio-economic impacts – would naturally continue to deliver on its reliability, cost effectiveness and low-risk (to the consumer) investment approach…

Here is the full article