Smarter electricity planning will save South Africa R162 billion in electricity investment says report

Submitted by: Jonathan Ramayia, Monday, June 3, 2013

<p>A study by the Electricity Governance Initiative shows that South Africa’s current expenditure in electricity infrastructure could be significantly reduced (Image credit: <a href=''>danicek / 123RF Stock Photo</a>)</p>

A study by the Electricity Governance Initiative shows that South Africa’s current expenditure in electricity infrastructure could be significantly reduced (Image credit: danicek / 123RF Stock Photo)

A new report, ‘Smart Electricity Planning’ by the Electricity Governance Initiative of South Africa shows that with ’smarter electricity planning’, South Africa could save in the region of R162 billion if smarter expenditure in energy infrastructure was made. The figure comes from a comparison with the country’s current energy future as outlined in the Integrated Resource Plan2010 (IRP2010), a plan that proposes the country’s energy mix for the next two decades. According to the report, the saving would result from a combination of higher levels of energy efficiency; exclusion of nuclear investment; reduction in fossil fuel-based energy investment and; greater investment in renewable energy than that currently allocated in the IRP2010.

Using the Sustainable National Accessible Power Planning (SNAPP) model developed by the Energy Research Centre (ERC) in Cape Town, the study estimates that the proposed IRP2010 investments in electricity by 2030 would amount to approximately R910 billion at 2010 prices. At R748 billion, the ‘Smart Track Plan’ proposes an electricity mix that results in new capacity equal to 36.6 GW from renewables, removing new nuclear-build completely and reducing the new build capacity of ‘fossil peak’ from 7.3GW to 3.4GW. The plan results in renewables accounting for 71% of all new energy investments, when compared to just 37% in the IRP2010.

Reducing energy demand

The report notes that South Africa’s current electricity plan prioritises old and expensive technology, including the building of coal-fired power stations and nuclear facilities. Explaining that electricity demand growth has been 10% lower than that estimated in the IRP2010 the report predicts that due to global economic volatility electricity demand growth will continue to be lower for many more years into the future. In addition, the report claims that South Africa’s existing electricity plan is built on inflated electricity demand projections calling the build of many large power stations unnecessary. According to the costs modelled in SNAPP, 18% of the overnight capital requirements can be saved with the ‘Smart Track’ new-build generation plan, one of three options detailed in the study.

An integral component of the Smart Plan is energy efficiency and energy conservation. Using the SNAPP model, the report shows that South Africa could effectively reduce its electricity demand by 16% by 2030 without constraining economic growth.  It estimates that the following sectors would achieve reductions in demand by implementing effective energy conservation strategies and the best available efficiency technologies and practices:

  • Residential sector: reduction of electricity demand by 40%
  • Commercial sector: reduction of electricity demand by 25%
  • Mining and industry: reduction of electricity demand by between 15-20%

The smart approach has a strong focus on developing an electricity plan for the country that would support the growth of jobs and result in a more equitable energy distribution. Speaking at a meeting in Durban, co-author Robert Fischer explained the purpose of the report, “the intention is to influence the government to become smarter in their electricity planning approach. It’s not a fully-fledged plan as compared to the IRP but it is a contribution to the planning of our electricity future to become more integrated and more smart“. Later this year, a revision of the IRP2010 will be made, and the report is intended to directly inform some of the key energy planning decisions being made for South Africa. 

Jonathan Ramayia