The Presidential Climate Commission (PCC) has over the last few months embarked on a consultative process in response to the call by Department of Mineral Resource and Energy for stakeholders’ inputs and recommendations on the revision of the 2019 Integrated Resource Plan (IRP).
The Commission concluded its yearlong stakeholder consultative process on the options for the future of electricity planning and the evolving energy mix and has submitted recommendations to the President Cyril Ramaphosa on the critical steps needed for justice and boldness in electricity planning for South Africa.
At the core of the PCC recommendations is that our country needs a modernised electricity system that fosters inclusive economic growth, meets minimum emissions standards, and aims for the bottom end of the Nationally Determined Contributions (NDC), enabling cheaper cost of capital and access to trade. We reaffirm through these reports that the Just Transition must be central to our future electricity system.
In outlining key issues from consultations and the recommendations, Ms Lebogang Mulaisi, PCC Commissioner and Chair of its Climate Mitigation Working Group stated that the process came under significant scrutiny from all quarters of society but still considered the views and recommendations as articulated and reflected in the PCC’s recommendations and Stakeholder Perspective Reports.
“All partners agree that electricity is critical for development and therefore it is in the national interest to resolve the energy crisis in a just and transparent manner. A clear plan for electricity in the short and long term can give our people hope, attract investment, bolster trade, support agriculture and industrialisation, and contribute decisively to our sustainability goals” said Lebogang Mulaisi.
Mulaisi further added that government should incentivise green industrial development, economic diversification, and the localisation of key transition value chains, and create additional jobs particularly in regions that are at-risk.
With South Africa in an electricity crisis, the PCC advocates in the short term for selection of technologies that are least cost, widely known and quickest to get onto the grid through renewable energy backed by storage and peaking support. The commissioners call for an IRP that maximises renewable energy available on the grid.
“For this reason, especially in the short-term, the PCC believes that we should be accelerating renewable energy generation construction early. - If we adopt ambitious and clear goals in line with our development and just transition objectives, the PCC expects a policy adjusted IRP to promote approximately 50 to 60 GW of variable renewable energy by 2030, supported by co-located storage, and between 3 and 5 GW of peaking support”, said Dr Crispian Olver, PCC Executive Director.
The PCC supports the Energy Action Plan released by the President last year, and the measures to make the current coal fleet run more efficiently, although we are cautious about the ability to increase coal Electricity Availability Factor (EAF) to the levels targeted.
“As a matter of principle and justice, we cannot support the decommissioning of coal power stations plants into a vacuum- In a least cost system, coal fired power stations are retired at the end of their economic life, but once over the immediate crisis, opportunities will arise to decommission as planned or faster. Failure to roll out renewables will lead to further extending of coal plant with the consequences for cost and reliability. The onus is on us to have built the alternative power and employment opportunities by that time.” said Dr Crispian Olver, PCC Executive Director.
The PCC in its recommendation emphasises that government needs to balance energy security, cost, economics, jobs, environment, and health. In this broad context, what South Africa really needs is united leadership supporting a set of ambitious goals to ensure continuous access to electricity, enable economic growth, reduce impact on human health, enable trade competitiveness and economic diversification and the creation of suitable jobs.
The PCC calls for an ambitious renewable energy-based power system that will restore continuous access to electricity, enable economic growth, reduce impact on human health, enable trade competitiveness, and enable economic diversification and the creation of jobs.
Planning and implementing for the transition and responding to our current crisis needs to support those most impacted, particularly SMMEs and indigent households, as well as enhance social protection measures, particularly for those workers and communities impacted.
The PCC echoes the many calls for the review of and for more transparency in the electricity pricing system and its cost and revenue models at all tiers and across all users.
If we are not able to resolve the inherent sustainability limitations of the current pricing system, we will perpetuate existing challenges and crises. Reviewing electricity pricing is urgent. Current prices are not sustainable for Eskom or for municipalities. Grid investment and costs need to identify separately from generation.
Secondly, stakeholders to the colloquium argued that the free basic electricity (FBE) system should be reformed. It needs to be made more effective and more generous. According to PARI research, only 30% of FBE allocations make it to households and PARI suggest a minimum threshold for FBE should be 350 kWh per household per month, a sevenfold increase on todays 50 kWh.
Local government has a fundamental role to play in electricity distribution, energy efficiency and small-scale generation. A new sustainable financial model that acknowledges the change in municipal roles and future electricity revenue is needed. Significant support is also required in building the capacity of local government to plan and manage electrical systems.
The commissioners therefore recommend a more spatial approach to electricity planning to identify and build capacity to locate early renewable energy construction and streamline bidding and grid access processes.
Spatial planning will also provide medium- and long-term guidance on grid upgrades (at transmission and distribution levels) needed to maximise renewables penetration, while addressing security issues at a much more granular scale and allow planning for associated systems and infrastructure, for example needed road and port upgrades and where to optimally locate skills development efforts.
As the Commission we therefore call for investment prioritisation in the upgrade the transmission and distribution grids. Modernising the electricity supply and getting the most out of renewable energy requires modernising the grid, which has lacked sustained investment and seen poor conditions further exacerbated by the strain imposed by load shedding.
In conclusion, the commission call on all social partners to work together to rebuild our electricity sector and for government to lead the crusade and create conditions conducive for creating additional jobs, incentivise green industrial development, promote and champion economic diversification, and support localisation of key transition value chains, particularly in regions that are at-risk.
Issued by Presidential Climate Commission