A series of recent events may have determined the future of South African power production for a generation.
Renewables look set for continued rapid expansion, coal is on the back foot and new nuclear plants look as far off as ever. The least spectacular event may have the greatest practical implications.
The government has announced that it has streamlined the procedures for developing large renewable energy projects in renewable energy development zones. Developers hoping to develop projects in the country’s eight renewable energy development zones will only be required to carry out basic environmental impact assessments, with the aim of greatly speeding up the process.
Applicants are to receive a licence tender within 57 days rather than the usual timescale of 300 days. The zones were created in February 2016, with the aim of helping the country achieve its targets on promoting renewable energy and cutting greenhouse gas emissions.
They are Overberg and Kornsberg in the Western Cape; Cookhouse and Stromberg (Eastern Cape); Upington and Springbok (Northern Cape), Kimberley (Free State and Northern Cape) and Vryburg (North West). Grid improvements in five transmission corridors will also benefit from the same easier regulatory framework.
After years of dithering and delay, Pretoria has swung its support behind renewables over the past five years: 2.2 GW of solar and wind power generating capacity on 44 projects has been so far been completed. PPAs are due to be concluded on another 2.3 GW over the next few weeks.
South Africa has by far the most polluting power sector in Sub-Saharan Africa: it has both more generating capacity than any other country and is more heavily dependent on carbon-intensive coal fired plants. However, it can rightly argue that other areas of the economy should do much more to cut their own contribution to greenhouse gas emissions.
The animal agriculture sector, for instance, is a big contributor through methane emissions from livestock but has not been subject to any restrictions by government. However, state owned power utility Eskom is becoming more reluctant to sign long term power purchase agreements (PPAs) from renewable energy independent power producers (IPPs). It claims that it is more expensive than electricity from thermal power plants and not always reliable.
This last criticism has been levelled at renewables by established power utilities over many years but power grids and generation mixes can be developed to cope with fluctuating output from some technologies. Whether Eskom’s doubts are valid depends on whether the government expects the parastatal to buy electricity from renewables at unreasonable rates.
Eskom plans to close five coal-fired plants between 2020 and 2029, with combined generating capacity of 8.3 GW. This is not because of a wholesale move away from coal but because 9.6 GW of new, more efficient coal plants are being developed, giving it the option to close more expensive and polluting plants.
The five had not been scheduled for closure but anaemic economic growth has resulted in much lower than expected demand for electricity. Unlike recently, South Africa had suffered from a lack of power generating capacity.
The closures result in the loss of about 20,000 jobs, although other jobs are being created on other thermal power plants and within the renewables sector. The National Union of Mineworkers is considering strike action, while workers within the coal haulage sector blocked roads around Pretoria in March in protest at the plans.
Renewables are likely to become even more important since the South African courts blocked government deals for new nuclear power plants. Successive ANC governments have published plans to expand the country’s nuclear power sector over many years but all have proved unsuccessful. At present, South Africa has just a single nuclear plant: the Koeberg facility, with 1.9 GW.
Most recently, the government announced plans for eight more plants to be developed at a cost of about R1 trillion ($74.7bn) but this figure seems very much a best guess and such estimates are prone to rise in the nuclear industry. The Western Cape’s High Court has blocked the plans, after two NGOs – Earthlife Africa and the Southern Africa Faith-Communities’ Environmental Institute – challenged them.
The court found that the government had not followed due process on five occasions. Eskom had handled the procurement process, using information that was provided by potential bidders. Although Pretoria can appeal, it seems most likely that the plan has been killed off, particularly because South Africa simply does not need as much electricity as previously expected. At the same time, renewables are becoming steadily cheaper and offer the prospect of greater competition in the sector.
from African Business Magazine http://ift.tt/2oX9DVs