Category Archives: DoE

CSIR responds to Eskom claim of R9bn renewables-related economic loss in 2016

Engineering News, 11 January, 2016.

The Council for Scientific and Industrial Research (CSIR) has responded to Eskom’s claim that buying power from the country’s renewable-energy plants resulted in a net economic loss of R9-billion in 2016 – a trend that could persist for the next five years, owing to the country’s surplus supply position.

To reach its conclusion, the State-owned utility used a CSIR-developed methodology, which offsets the benefits associated with reduced load-shedding and avoided coal and dieselburn, against tariffs paid to the renewable independent power producers (IPPs).

From January to December 2016, the utility purchased 6 TWh from solar photovoltaic (PV) and wind plants, which Eskom said translated into total financial benefits of R3.2-billion. However, this saving was offset against a tariff cost of R12.2-billion, leading to the assessment of a R9-billion net loss to the economy.

Eskom argued that this trend of net losses would persist until 2021, owing to its assessment that South Africa will continue to have surplus capacity until that date.  It, therefore, argues that new renewable IPP plants should only be introduced at a “pace and cost the country can afford”.

The utility has, since mid-2016, steadfastly refused to conclude power purchase agreements with IPPs for the most recent projects selected under the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), leaving 26 projects, with a combined investment value of around R50-billion, in limbo…

In its response to Eskom, CSIR stresses that its methodology, which measures only the immediate fuel-saving effect on the existing fleet and underestimates the value of new investments, had been developed for a constrained powersystem and for when the use of diesel generators was high.

“When the power system is less constrained and dieselturbines are not operational most of the time, the methodology underestimates the diesel-fuel savings. It needs to be adjusted to give the correct fuel-saving value.”…

REAL VALUE

The real value, the CSIR argued, of the projects arising from the first three bid window lies in the cost reductions achieved for solar PV and wind to 62c/kWh, which is 40% cheaper than new coal. These reductions would not have been possible in the absence of the competitive bidding associated with the REIPPPP…

… “While the operational solar PV and wind projects triggered tariff payments of roughly R12-billion in 2016 and produced roughly 6 TWh in the same year, the entire bid window 4 solar PV and wind projects (original, additional and expedited) will trigger tariff payments of merely R6.6-billion a year, while they will produce more than 9 TWh a year. That means 45% less annual payments for 50% more energycompared to the currently operational solar PV and wind projects. These new projects will, therefore, be almost cost neutral from a pure fuel-saving perspective.”

Here is the full article

National Energy Efficiency Strategy – call for comments by 22 Jan 2017

Government Gazette, 23 December, 2016

GOVERNMENT GAZETTE, 23 DECEMBER 2016:

I, Tina Joemat -Pettersson, Minister of Energy, hereby publish the draft post – 2015 National Energy Efficiency Strategy for public comments. Interested persons and organisations are invited to submit, within 30 days, written comments on the draft post -2015 National Energy Efficiency Strategy on any of the following: ….   For Attention: Xolile Mabusela

 

It’s a 4.2MB file (40 pages):   http://www.gov.za/sites/www.gov.za/files/40515_gen948.pdf

 

Study reveals SA’s sentiment towards renewable energy

Energize, EE Publishers, 9 January, 2017.

DoE extends comment period for energy plans to end of March

Engineering News, 9 January, 2017.

The Department of Energy (DoE) has formally extended the period for public comment on the draft Integrated Energy Plan (IEP) and the draft Integrated Resource Plan (IRP) base case until March 31.

The closing date for written comment was initially set as February 15, after the two plans were formally Gazetted on November 25.

The DoE said the decision to extend the comment period followed requests from a number of stakeholders.

To date, the department has hosted hearings on the IEP and the IRP in Gauteng, the Western Cape, the Eastern Cape and KwaZulu-Natal.

A number of participants expressed dismay at the short notice provided for preparing oral submissions and the restricted timeframe for the submission of written comments.

There has also been strong criticism of the plans, particularly of the IRP base case, which, in its assumptions, places constraints on the amount of renewable energy that should be introduced yearly on the basis of possible negative consequences for grid stability.

Several presenters urged the DoE to re-run the base case in order to generate a least-cost outcome, free from the “artificial constraints” imposed on renewable energy in the current draft.

Despite the constraints, the base case still assumes that the first new nuclear reactor would only be required by 2037, rather than the now unobtainable deadline of 2023 in the current IRP, which was published in early 2011 and is considered to be significantly out of date.

Nevertheless, State-owned utility Eskom issued a request for information (RFI) on December 20 for the ‘Nuclear New Build Programme’ in line with an amended section 34(1) determination, published in the Government Gazette of December 14, designating Eskom as the procurer of the nuclear generation plant, which also involves the front-end fuel cycle facilities which will be procured by the South African Nuclear Energy Corporation, or Necsa.

The RFI was issued instead of the request for proposals, previously mooted, and Eskom stressed that the process was not a competitive tender and would, thus, not create any financial commitments or obligations on it or government.

The closing date for responses to the RFI is April 28.

Energy minister still taking secret actions on Nuclear Energy

SAFCEI and EarthLife Africa, 10 January, 2017

In a surprise move late last year, the Minister of Energy’s legal team, revealed the decision to give the procurement of the nuclear new build to Eskom.  They chose to reveal this only at the nuclear energy court hearing on December 13th 2016, preventing the court from reviewing the case.

Today, two NGOs who are taking the government to court over their unlawful nuclear energy decisions, Earthlife Africa, Johannesburg (ELA Jhb), and the Southern African Faith Communities’ Environment Institute (SAFCEI), submitted supplementary affidavits, part of the court case preparation for the nuclear energy court hearing, which has been postponed to February 22nd 2017.

The court papers have revealed that the Minister of Energy took an unlawful decision in secret and without any regard to required input from the public.

Makoma Lekalakala, from ELA Jhb, says that “once again the energy minister is acting in bad faith, taking decisions without any public input, while at the same time, engaging in public hearings about the electricity choices for the country.  What value is given to public input if the decision has already been made before the public process is complete?”

As the SAFCEI and ELA Jhb affidavit states: the manner in which this decision to shift the responsibility for the nuclear build to Eskom has followed the same secretive, unlawful process as the previous nuclear related decision making. According to the NGOs affidavit: “the Minister’s decision was taken because irrelevant considerations were taken into account or relevant considerations were not considered.”

For example the energy minister has based her decision on outdated government plans: her new nuclear section 34 determination was based on an Integrated Resource Plan (IRP) from 2010.  A new IRP is currently going through a process of public participation and both this proposed replacement IRP as well as the submitted public reservations, input, questions, and objections have been completely ignored.

The Minister also ignored the advice of her own advisers which found that a least cost IRP model, free of any artificial constraints and before any policy adjustments does not include any new nuclear power generators. The optimal least cost mix is one of solar PV, wind and flexible power generators (with relatively low utilisation).”  The Ministers’ advisors report (MACE report) was made public at the IRP public hearings which were held in December 2016, at the same time as the court case was heard.

“The secretive manner in which the minister is making nuclear decisions further undermines open government.  South Africa is a democracy until it comes to nuclear energy, and then it becomes an autocracy. It seems the people have no say, and legal requirements are ignored or bent to ensure nuclear gets the go ahead. We are now reliant on expensive complex court processes to force government to consult the people that will be most affected, – especially the poor and vulnerable who will not be able to afford increasing electricity prices” says Liz Mcdaid, spokesperson for SAFCEI.

The new court hearing date for the case has been set down for 22nd to 24th February 2017, in the Western Cape high court.

Ends.

For further information, please contact

Ms Liziwe McDaid (SAFCEI)                         liziwe@mweb.co.za      Cell: 082 731 5643

Ms Dominique Doyle (ELA-Jhb) :               dominique@earthlife.org.za      Cell: 079 331 2028