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DA: Statement by Lance Greyling, Democratic Alliance Shadow Minister of Energy, calling on the revision of South Africa's 20-year energy plan (21/05/2012)

21st May 2012

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The Democratic Alliance (DA) is becoming increasingly concerned about the slow decision-making processes of government regarding our 20-year energy plan. The decisions over our energy future will have make-or-break consequences for South Africa's economy and it is therefore vital that these decisions are both informed by the right assumptions and that they are taken timeously to avoid future energy crises. On both these counts the government is falling short.

The national nuclear energy executive committee (NNEECC), mandated to oversee procurement for government’s proposed nuclear build programme, is reportedly yet to have its first meeting since its formation last year. If this is true, it represents a major dereliction of duty on the part of government, as we need to urgently assess and make a decision on the many unanswered questions over our nuclear programme. I will therefore today be submitting parliamentary questions to the Deputy President to establish how many times this committee has met over the past year and what issues have been under discussion.

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The Minister of Energy has also recently admitted that the nuclear build programme will be delayed by over a year and that the first reactors, if they are procured, will only come on stream from 2024 as opposed to the planned date of 2023. This will have dire consequences for our future energy security in much the same way that the delay in Medupi is causing our present energy crisis.

The DA does, however, have serious concerns about the proposed nuclear build programme and we believe that the entire 20-year energy plan needs to be urgently revised to take into account the rapidly changing global and regional energy sector.

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The Integrated Resource Plan (IRP 2010) forecasts that 9.6GW of new nuclear capacity will be available by 2030. In that scenario, nuclear energy would account for 23% of South Africa’s electricity. But the underlying assumptions in this IRP need to be reviewed, as there have been significant changes in the type, distribution and cost efficiency of potential alternative energy sources over the last two years.

I have today written to the Minister of Energy to request a formal review of the IRP 2010. This is a matter of urgency and now is the perfect time to institute a review. The draft National Development Plan emphasises the exploration of all possible alternatives to nuclear energy, given the high financial risks associated with it.

The major problem with the IRP as it stands is that it requires all South Africans to shoulder the high risk of massive investments with little probability of reward. The majority of proposed nuclear power, for instance, will be used to power the expansion plans of a few large energy-intensive companies. If, however, that energy comes on stream for a price that is not globally competitive, these companies could decide to expand their operations elsewhere, leaving us with the problem of untenably expensive stranded assets.

The global energy sector is evolving rapidly, and South Africa needs an energy policy that responds to these changes effectively. Since the IRP was promulgated two years ago, there have been massive shifts in the global energy space, with the price of some technologies like solar PV plummeting and large gas finds in our region making this a possible future energy source. We therefore require a revision of the IRP to ascertain the optimal changes that should be made.

This government seems determined to stifle any debate over the nuclear programme. Despite our persistent requests, no information has been put into the public domain about the economic feasibility of new nuclear power, nor the different financial models that are being considered. Instead, we see nuclear included in the energy plan even though the department’s own modelling shows that it is not the most cost-effective energy source.

The public has a right to be concerned about how the process is managed and whether changing variables are receiving sufficient consideration.

The Minister has to provide clarity.
 

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