South African energy player, Frank Spencer, expresses some personal views around the current activity in the South African renewables market.
In November, South African energy minister, Tina Joemat-Pettersson, outlined 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 have 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.”
In response to the update, Spencer said that “despite what Eskom proclaims, there is no longer any technical reason to limit the amount of renewables in the country’s energy system.”
He added: “Thus the least-cost IRP2016 option should be considered the base-case. Any other option will take funding away from other crucial needs in South Africa.
“The future demand curve projections come with a huge amount of uncertainty, and thus we should build plants that allow us to adapt quickly to changing energy conditions – renewables + gas allow us to meet all of these requirements.”
Read response to IRP update from the South African Photovoltaic Industry Association (SAPVIA).
Eskom and the REIPPP Programme
In July, South African state-owned power utility, Eskom, made a public statement saying that it will not sign any power purchase agreements with private power producers once round 4.5 of government’s renewable power programme draws to a close.
Eskom chairman Ben Ngubane, addressed a letter to energy minister Tina Joemat-Pettersson, stating that the power company will not sign further power purchase agreements without engagement around potential risks concerning the utility’s future revenue.
Since its implementation in 2011, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has generated R195 billion ($13,731,195,700) and added 2,145MW of power onto the network.
With strong views against this decision, Spencer believes: “Eskom’s refusal to sign the Round 4 power purchase agreements is a blatant defiance of government policy and could destroy one of the best new industries South Africa has developed, along with all the jobs created and SED benefits accrued.”
Spencer further states that this also means they can reallocate the money allocated to them in their MYPD budget, approved by NERSA, to other places – “it is a blatant form of monopolistic economic hijacking.”
ERA Draft Amendment
Electricity planning occurs within a regulatory framework established in terms of the Electricity Regulation Act 4 of 2006 (ERA), which empowers the Energy Minister to determine, after consultation with the National Energy Regulator of South Africa (NERSA), the new generation capacity in order to ensure security of supply.
According to Spencer: “there should be no cap on embedded generation, and private projects (either self-consumption, or willing buyer – willing seller) larger than 10MW should be allowed an easy way to be licensed.
“The simplest way to solve this is to have a single cap per technology, and allocate first to embedded generators and then to renewable energy independent power producers.”
He added: “This will allow the private funded – no-risk to the fiscus end-of-line power plants, generating at the point of consumption – to come on-line first.”
New Year Outlook
When asked to forecast the 2017 energy future for South Africa, Spencer said: “Government needs to reign in its ‘wild child’ Eskom, sign off on the Round 4 REIPPP projects, support their existing climate change, IPP and RE policies, and finalise an optimal, least-cost IRP.”
frank-spencerFrank Spencer, South African Photovolatic Industry Association (SAPVIA) board member, has a MSc in Engineering and a BPhil in Sustainable Development, is an engineer by background with 15 years’ experience in the solar industry.