Opinionista Richard Worthington 13 November 2017

Be alert to the risks of legitimising a hollow process for a new electricity IRP

Imagine that, consistent with recent statements by the new Minister of Energy, an Integrated Resource Plan (IRP) for electricity is released in the next week or two, with a new generation build plan that mandates nuclear procurement. What would our response be?

For argument’s sake, let’s say the plan is scaled back to no more than half the total previously deemed necessary to achieve the benefits of “fleet procurement” (the 9.6 GW contemplated for a Rosatom contract), as a concession to widespread opposition.

Since there is a requirement for consultation, the minister would need to convene some kind of public engagement. There have been calls from various stakeholders for some kind of summit on energy (or the economy more generally), so even a very hastily convened event might be presented as being responsive to stakeholder concerns, as well as fulfilling requirements for the new IRP to be tabled in Parliament subsequently. What would we do?

Unlike the Integrated Energy Plan (IEP) that covers the entire energy system, the requirements for which are explicitly set out in the Energy Act of 2008, the process for seeking common ground on a policy-adjusted plan for the electricity system, before it is tabled for parliamentary approval, is not defined. Determinations by the minister that generation capacity will be procured must, as recently determined by the High Court (Western Cape), be subject to public hearings and Nersa consideration, but the new build plan of the IRP is nevertheless treated as binding.

Various stakeholders have sought legal opinion on just what the minimum requirements for the promulgation of an IRP are, but would prefer to have a proper process of consultation, with some prospect that public deliberation might impact on the substance of the plan, than to make recourse to legal challenges. It would be prudent for all who recognise the folly of committing to buy new nuclear plants to consider what kind of collective action might succeed in convincing government to hold transparent and meaningful consultation on the IRP.

The first step would be for all concerned to agree on some minimum bottom lines, without which they would be willing to boycott any “energy summit” or ministerial initiative to achieve compliance with the requirement for consultation. When the prevailing IRP2010 was promulgated there was urgency due to inadequate capacity to supply, while now Eskom has more electricity than it can sell. What is urgent today is to honour the fiduciary commitments the state has made to the renewable energy industry in the implementation of the IRP2010 – obstruction of which has contributed to “negative sentiment” expressed in ratings downgrades.

There is certainly a long-standing need for a new plan, informed by the latest research and market developments, but the priority here must be the quality of data and analysis, and clarity of the outcomes being prioritised, rather than completing the process in weeks instead of months. There is also a need for the IRP to align with the IEP, which also remains in progress; this could and should provide a mandate to expand the role of electricity in the economy, particularly where it can replace the importation of oil and petroleum products.

In our current context it would be irresponsible not to imagine the worst that could happen, or could be attempted, and to discuss how we would respond, with sufficient coherence and resolve to avert it. A stand-off between the Department of Energy (or government more broadly) and a critical mass of stakeholders is not a desirable situation. While there are widespread appeals for more consultation by government, and fostering co-operation among all elements of society, it is difficult even to contemplate boycotting an offer of “engagement”, much less discussing it openly with those with whom one often disagrees.

However, legitimising a hollow process on an IRP that will set parameters on electricity infrastructure investment for the coming decades carries enormous risk. Like in 2010, we might be assured that it will be regularly updated, but getting this one right – or at the very least ensuring it doesn’t mandate irresponsible procurement and greatly deepen our debt – is imperative for any prospect of reducing poverty and inequality.

The public narrative that we need nuclear power to meet our commitments to climate change mitigation is false, as is clear from work already released in the IRP documentation published for comment a year ago. Robust modelling by several agencies, including the Council for Scientific and Industrial Research, shows that an electricity system without nuclear can meet and exceed our emissions reduction commitment at lower cost and with higher employment than when new nuclear is included. The Energy Research Centre modelled scenarios with a range of cost assumptions and even the most optimistic pricing fails to find nuclear power offering net benefits over renewable energy options.

We need to imagine the worst and also the best possible outcome. Muddling through is no longer an option, as illustrated by the state of Eskom, not to mention the air quality and water pollution in many areas of the Highveld. It may transpire that the Minister of Energy announces an inclusive and transparent process for completing both the IEP and IRP, that any decision on nuclear procurement (or any other mega-projects) is deferred to another decade, and the externalised costs of the coal industry are accounted for in our planning.

With a positive objective in mind – an electricity system contributing to the well-being of all South Africans, with a net value that is positive for society as a whole and over time, when full costs and life cycles are assessed – we must be prepared to reject what might be put forward. To do this, stakeholders not accustomed to parading their interests and positioning in public need to consider how to avoid being complicit in legitimising a plan designed to serve the elite, and to start talking about taking a collective stand on electricity and economic prudence. DM