Energize Inbox, March 2018



Our winning letter

re: Statement by Deputy Minister of Energy

Dear Editor

I wish to respond to a recent statement made by the deputy minister of energy, according to an article in Business Day dated 20 February 2018: www.goo.gl/zgKfRJ

According to the article: “Deputy Energy Minister Thembisile Majola told MPs that the submission by the Council for Scientific and Industrial Research (CSIR) on the Integrated Resource Plan had been overtaken because its projection for energy demand had not materialised. She said that in its engagements with the department the CSIR had had to withdraw its studies because of this.”

As the founding Head of the CSIR’s Energy Centre, I think I am well positioned to elaborate on the Deputy Minister’s statements.

It is correct that the CSIR is one of the entities that provides energy-demand forecasts for the Integrated Resource Plan (IRP). However, the CSIR’s submissions to the Portfolio Committee on Energy and to the IRP2016 public consultation process from early 2017 were not related to the IRP’s demand projections. The two comments provided by the CSIR were: First, solar photovoltaics (PV) and wind cost assumptions in the IRP should be aligned with current realities, and second, the annual deployment rate for solar PV and wind should not be artificially constraint in the IRP.

The demand projection determines when to build new power generators and how many. It does not determine what mix of power generators to build (unless certain technologies are artificially restricted in annual or total build-out). If the demand projections today are lower than they were a year ago, that simply means that less of the least-cost new-build mix should be built. But it does not change the composition of the least-cost new-build mix. The least-cost new-build mix in South Africa neither includes new coal nor new nuclear.

Under my leadership the CSIR Energy Centre did neither withdraw its submission to the Portfolio Committee on Energy (21 February 2017) nor its submission in the context of the IRP to the Department of Energy (31 March 2017). To the best of my knowledge, no such withdrawal of these official CSIR documents has happened since after my departure from the CSIR in August 2017 either.

In fact, since its submissions to the Portfolio Committee and to the Department, the CSIR has continued to analyse the South African power system and to determine the least-cost mix of power generators for new/updated input assumptions, including updated (lowered) demand projections. Those new results have been published in November last year. The key conclusion, no new coal, no new nuclear, has been re-confirmed in that research.

In 2017, numerous additional independent studies from reputable organisations such as the Energy Research Centre at the University of Cape Town, the US Department of Energy’s NREL, Eskom’s own Energy Planning unit, North-West University, Frankfurt University, Rocky Mountain Institute have confirmed the CSIR’s findings: Neither new coal nor new nuclear is part of a least-cost electricity mix for South Africa anymore.

This is a consequence of the significant technology cost reductions in the last decade and the resulting superior economics of solar PV and wind compared to coal and nuclear. This statement factors in already the additional cost to cater those times when the sun does not shine and the wind does not blow. The submission documents by the CSIR and the latest analyses, including all input assumptions and output results are freely accessible here:

Submission to the Portfolio Committee on Energy, 21 February 2017:

https://pmg.org.za/committee-meeting/23979/
www.goo.gl/iWsMFN

CSIR’s official input into the IRP2016 public consultation process, 31 March 2017:

www.goo.gl/hKpPZ
https://www.csir.co.za/csir-energy-centre-documents
https://www.csir.co.za/documents/csirirp2016comments11pdf

CSIR’s additional research on South Africa’s least-cost power system, 9 November 2017: www.goo.gl/J4jCTL

Dr. Tobias Bischof-Niemz

Editor’s note: EE Publishers contacted the acting head of the CSIR’s Energy Centre, Stephen Koopman, who confirmed that the CSIR has no record of having withdrawn its submission on the IRP.


re: Fifty actions to address the Eskom and electricity supply industry mess (published on the Energize website, 9 February 2018)

Dear Editor

A powerful to-do list. What perhaps also needs to be considered is the increasing role of the municipalities in the future energy system given the substantive impact and opportunity that dispersed and embedded generation and storage technologies presents, and how Eskom and municipal business models will need to evolve. This requires relooking at how the entire ESI is structured and regulated, and unlock the opportunities for local economic development. The focus is understandably on Eskom, but the solutions take us into a much broader space. There is huge opportunity, but it requires new thinking that allows SMMEs into the energy space. Much of this will be unlocked if the comprehensive list is actioned…exciting time ahead.

Dr. Clinton Carter-Brown


Re: Fifty actions to address the Eskom and electricity supply industry mess (published on the Energize website, 9 February 2018)

Dear Editor

A comprehensive punch list, and I would like to suggest that you add to the list an assessment of the cross-subsidy issues within electricity distribution – a review of the Electricity Pricing Policy, We all agree that we need to make energy affordable to the poor, however, the degree of cross-subsidization is akin to taxing the inputs to the economy rather than the outputs of the economy. If affordable energy is a social issue, it should be funded from taxes intended for social benefits. We need to keep our commercial and industrial customers internationally competitive.

Paul Vermeulen


re: Salvaging Eskom

Dear Editor

In my opinion, the way to save Eskom is to disconnect all wind and solar electricity farms from the Eskom grid immediately to restore Eskom’s losses of R1-billion a month. This should make it possible to give the PIC back the government pensioners’ money which was about to be put at risk.

Start the biggest possible job creation programme immediately. Fast-track the doubling of Eskom’s existing generation assets by 2030. While starting the nuclear power station procurement process, start also with a coal-power replacement programme to make steam for existing turbo-generators. Use foreign funding by giving these contracts to the tenderers which have the best finance packages from foreign and local banks, and the most credible local industry content, as well as the benefit of recent relevant experience (and design changes already proven in service) of the plant designs they offer.

Rescind all REIPPPP agreements with immediate effect. Eskom, South Africa, and Africa can simply not afford the REIPPPP agreements any longer. Ensure that all wind and solar farms which are no longer economical are restored to their pristine condition. All the steel in those massive propeller towers and their foundations must be worth a fortune. The local communities will benefit from the recycling work opportunities.

Imagine the radical economic restoration Africa might enjoy as its currencies strengthen, and it begins to add value to its mineral wealth before letting other countries do so.

Alan Mitchell

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