Pragmatism and common-sense in energy planning

January 25th, 2017, Published in Articles: Energize, Articles: Vector

 

The Department of Energy released its revised version of the Integrated Resource Plan (IRP) 2030, which has been updated to cater for South Africa’s energy needs up to 2050.

TC Madikane, SAIEE president

Preliminary results shared by the Department of Energy (DoE) show that many stakeholders take strong positions in one direction or the other, most of them very emotional.

This is understandable as energy planning inherently results in the largest capital investment a country can make. Where billions of dollars is involved, there are vested interests. Furthermore, climate issues have come strongly to the fore in recent years, in a way unimaginable a few decades ago. Energy has become more than a matter of science and engineering; it is now a matter of social science.

The SAIEE represents 7000 electrical engineering members directly, many of them working in the fields of energy generation, transmission and distribution. Many more work in these fields but are not members of the institute. It is imperative, therefore, that the we provide guidance to the process of energy planning in an unemotional manner.

The process of long-range energy planning is a complex mathematical exercise involving a variety of variables and scenarios such as demand projections; required reserve margins; imports/exports; energy efficiency; demand response; plant decommissioning; ancillary services and capital and operating cost trajectories. It faces constraints such as coal availability; emissions; water usage; grid stability and daily plant flexibility. All valid permutations are considered. Variables are easy to identify but the subjectivity is in predicting the future. Here stakeholders must table credible views without forcing a consensus views.

A secondary benefit of the least-cost optimisation approach is that it gives indicative future prices for electricity. Effectively, the elusive long-term price-path which we lack is made available in this way.

Energy options available for South Africa are traditional coal, clean coal, nuclear, renewables, hydro and gas, among others. South Africa’s growth comes first. Our commitments to reducing green-house gas emissions must be met. This means that every effort must be made to meet the COP21 targets by transforming the energy sector, the biggest contributor to emissions. Here, hydro, nuclear and renewables become attractive. But again, to avoid a one-dimensional non-optimal approach, the contributions of these technologies will only be determined by the optimisation model.

A key outcome to strive for in this exercise is “market-clearing”, where all the supplied product is used and there is no left-over supply or demand. Energy demand modelling will need to be more reasonable this time round, as opposed to the IRP2010 exercise that took government’s aspirations of 6% GDP growth as a given.

One trap to avoid, into which we have seen many stakeholders fall head-first, is to make rash statements about choices. It is incorrect to say that nuclear or renewables are expensive or that coal must be eliminated altogether.

In fact, saying these things is downright irresponsible. Nuclear is the only credible base load option that is low-carbon. The cost of renewables is reducing steadily and is challenging grid parity, while advances in storage will improve these technologies’ ability to support base load.

Coal is abundant in South Africa. Clean coal technologies are now available, with a potential for low emission solutions in the near future. All options are on the table and only a well-constructed model with the right parameters and reasonable assumptions can provide a credible answer.

The process has been criticised for its lack of transparency. Some interested parties with knowledge of modelling methodologies have requested to see the source code and data set assumptions. This is a reasonable request. Denying these requests erodes trust in the process. Government may be perceived to be pre-judging the outcome of the studies in favour of some biased position.

It is the SAIEE’s view, therefore, that, for this revised IRP to have some credibility, a few factors must be complied with. These issues include:

  • Developing and sharing a credible multi-criteria decision-making model.
  • Publishing the variables used in the model.
  • Sharing and interrogating the range of possibilities of the variables.
  • Sharing and interrogating the constraints placed on the model.
  • Presenting a reasonable number of least-cost options, in a hierarchical fashion.

The SAIEE remains convinced that a credible least-cost energy plan can be produced if these factors are taken into account. We are ready to avail the wealth of knowledge and experience at our disposal.

Government should establish a specialisation centre for energy planning tasked with refining the model annually and publishing the results as required by the National Energy Act of 2008.

Policy announcements must be made every five years for use in revising capacity determinations to be issued by the minister of energy. Open-source platforms have been used successfully in developed countries to enhance transparency and must be the first choice for this centre.

Send your comments to vector@ee.co.za