Climateproofing the second Integrated Resource Plan

21st May 2010 By: Saliem Fakir

The second Integrated Resource Plan (IRP2) should be due anytime soon. It will be a crucial document that will pretty much define South Africa’s energy mix for the next 20 years. Getting it to speak to the right things will involve intense wrangling between advocates for different energy solutions.

We have to contend with the fact that the IRP2 process is back-to-front because we should have had a national Integrated Energy Plan (IEP) before the IRP2 is developed. But, in this country, things tend to happen in a back-to-front manner – one has to be somewhat philosophical about it and not be too despondent that things will not follow their logical sequence.

Nonetheless, the IRP2 is already clouded in suspicion that high energy users and the coal control industry are undertaking the modelling on behalf of government because government does not have the capacity to undertake the sophisticated modelling that is necessary.

Suspicion is rife that the dirty industries have already positioned their best technocrats to exercise maximum influence on the shape and outcome of the IRP2.

All this points to the fact that the IRP2 is not only a technical but also an intensely political process – the needs of the economy, as opposed to those of the environment, will also come into play in the debate. Hopefully, it will not be a one-versus-the-other scenario.

Despite all this, the inter-Ministerial committee for energy – the intergovernmental process that is chaired by Barbara Hogan and involves other key Ministers and departments – is eager that there is greater public participation in the IRP2, compared with the less-than-satisfactory manner in which the IRP1 was handled. We should welcome this.

Managing the process with dexterity and sensitivity will be important. There will have to be trade-offs and, no doubt, the right energy mix will have to be weighed up in relation to not only future energy demand but also issues of cost and the reduction of externalities. The fights that will emerge will reflect not only interest in what the electricity mix should be but also existing and future value chains for various vested interests and others aspiring to open new doors of business. Principles and national interest may well fly out of the window if things are not dealt with properly.

In addition, getting the energy mix right in terms of the ratio of ‘coal versus nuclear versus renewables’ is as important a matter as is the constant hovering low above our heads – the issue of how to accommodate the proposed emissions reduction of 34% by 2020 and 42% by 2025 that South Africa was willing to commit itself to in Copenhagen, provided somebody paid for it. The IRP2 will have to be like no other IRP because the next round will have to speak to our climate change obligations.

The reason it was essential to undertake an IEP at the beginning is that one cannot log an emissions reduction strategy just on the basis of what is required to meet this country’s future electricity demand. One has to take into account the broader plans for carbon-intensive programmes for the future. Here reference is made to the proposal to build an 80 000-bl/d coal-to-liquid fuel plant in Limpopo province and a 400 000-bl/d petroleum refinery in the Eastern Cape, both of which are aimed at reducing South Africa’s dependence on foreign suppliers of oil and refined fuel.

The point, nonetheless, is that one cannot speak of an IRP2 in the absence of the global picture of the level of intensity of carbon within our economy going into the future. This will render any low-carbon future and trajectory meaningless. This will be setting climate change ambitions in the dark.

Having the full energy picture helps one understand the level of ambition required and the new economic opportunities that can be realised by opening space for a low-carbon trajectory. This will also tell us – on the basis of the carbon intensity of the future energy plan – whether Kusile will be needed or not.

Ensuring the next IRP2 is climateproofed will not be a simple task. We may go into it with a few blind spots, given that we have no IEP. But doing it is just as important as not getting all aspects of it right. It will also be the first time we will have done it through a climateproofing lens. By doing, we will also be learning.