A realistic look at energy’s ‘new dawn’ Stephen Thomas & Angela Andrews. The adoption of Integrated Resource Planning (IRP) in South Africa in 2010 should have been a major step forward for electricity consumers. In essence, the rationale for an IRP is that provided environmental requirements are met, consumers don’t care how electricity is generated, they just want a reliable service at the lowest sustainable cost. The lowest cost policy is determined by a sophisticated, data-hungry model. However, a combination of unrealistic data, ill-conceived interventions by ministers overruling the model, and poor performance by Eskom – in maintaining existing plants and commissioning new ones – has meant that, far from falling, prices have gone up. Additionally, the service has been unreliable since 2010. The new draft IRP may represent a step forward, not least because it does not include the programme of six to eight new nuclear reactors (9.6GW). Government ministers had forced this programme into all previous versions of the plan via policy adjustments, despite the nuclear option being far more expensive than the alternatives. It is not clear how far the apparent abandonment of the programme is a genuine change of heart, and how far it is bowing to the reality that the programme was unfinanceable. Or the fact in 2017, the Western Cape High Court set aside the determinations under the Electricity Regulation Act with regard to the need for, and procurement of, nuclear new generation capacity.
Fin24 7th Sept 2018 read more »