Idasa Pres_IRP2010_OctNov_HTrollip_latest

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Transcript Idasa Pres_IRP2010_OctNov_HTrollip_latest

Building on the Findings of the Electricity Governance Initiative South Africa
Integrated Resource Plan 2/2010
Cape Town 20 October 2010
Durban 22 October 2010
Polokwane 1 November 2010
Pretoria 2 November 2010
Understanding the
Integrated Resource Plan
(IRP 2010 Rev 2)
Purpose
• Review what is meant by IRP
• Examine some aspects of IRP 2010 Rev 2
• Present key aspects in plain language
• Raise issues of interest or potential concern
Identify issues with biggest relevant impact
and focus on these
There are looooooots of technical details… we will try not to
chase red-herrings
Some basics: electricity demand
and energy supply mix
• Electricity demand and energy mix
• Choosing an energy mix
– Least financial-cost model
– Constraints such as GHG emissions
– Policy adjustment
• Integrated Resource Plan
– The Negawatt: efficiency and DSM as a resource
– Economy, environment, society
World 1
World 2
World 3?
Electricity demand and energy mix
Source: Draft IRP 2010 pg 5
Electricity demand and electricity mix
Source: Draft IRP 2010 pg 8
Electricity demand and electricity mix
Source: Draft IRP 2010 pg 9
What is an IRP ?
…compared with traditional planning
 There is a LARGE BODY of work and experience published on IRP
Steps in the IRP process
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establish objectives [All stakeholders]
survey energy use patterns and develop demand forecasts
investigate electricity supply options
investigate demand-side management measures
prepare and evaluate supply plans
prepare and evaluate demand-side management plans
integrate supply- and demand-side plans into candidate
integrated resource plans
• select the preferred plan [A broad range of stakeholders]
• during implementation of the plan, monitor, evaluate, and
iterate
Integrated resource plan
Environment
• In a nutshell
– Technical
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Society
Economy
Incorporating environment
Incorporating society
Incorporating economy
Treating all energy resources equally
Includes all significant electricity system components
Treating energy efficiency and DSM equally to supply
– Process
• Attaining a balance on technical issues can only be
covered in consistently transparent public process
Making choices
• How much electricity do we need? The
DEMAND
• What do we want this electricity for?
GROWTH sectors
• How can we use electricity more efficiently
and wisely? EE and DSM
• What other national public development
priorities should inform our decision? HEALTH,
POLLUTION, JOBS, CLIMATE CHANGE,
UNIVERSAL ACCESS TO ELECTRICITY
Key Issues
“Revised Balanced Scenario”
IRP 2010 Rev 2
Making choices
• How much electricity do we need? The
DEMAND
• What do we want this electricity for?
GROWTH sectors
• How can we use electricity more efficiently
and wisely? EE and DSM
• What other national public development
priorities should inform our decision? HEALTH,
POLLUTION, JOBS, CLIMATE CHANGE,
UNIVERSAL ACCESS TO ELECTRICITY
Demand forecast
SO estimate
CSIR estimate
Source: Draft IRP 2010 pg 31
Making choices
• How much electricity do we need? The
DEMAND
• What do we want this electricity for?
GROWTH sectors
• How can we use electricity more efficiently
and wisely? EE and DSM
• What other national public development
priorities should inform our decision? HEALTH,
POLLUTION, JOBS, CLIMATE CHANGE,
UNIVERSAL ACCESS TO ELECTRICITY
Electricity demand forecast
Mining
Industry
Big metros
Industrial demand forecast
Allocation of risk for investments
Smelter project
Public
sector
Private
sector
• Risk in a BIG smelter project
• Lead time
• Public sector role
Allocating risk, balancing interests
Xstrata Given 100 Megawatts by S. African
Utility for Smelter
By Carli Lourens - Oct 21, 2010 2:25 PM GMT
“In its court papers, Eskom acknowledges that in 2008 the
country would probably not have been subjected to power
cuts and load-shedding had electricity not been delivered to
the smelters.”
Jun 10 2010 07:37 Jan de Lange
Sake24.com
“Regulatory Capture”
Regulatory capture
• occurs when a state regulatory agency created
to act in the --public interest instead acts in
favor of the commercial or special interests
that dominate in the industry or sector it is
charged with regulating
Metros’s energy demand
• How is Eskom-SO re-distributor demand
forecast done?
Example of Metro electricity planning:
Energy Consumption for Different Scenarios
Cape Town
Optimum Energy Future energy
efficiency measures result in lower
energy demand than Business as
Usual without compromising
energy service delivery.
Making choices
• How much electricity do we need? The DEMAND
• What do we want this electricity for? GROWTH
sectors
• How can we use electricity more efficiently and
wisely? EE and DSM
• Using realistic credible costs
• What other national public development priorities
should inform our decision? HEALTH, POLLUTION,
JOBS, CLIMATE CHANGE, UNIVERSAL ACCESS TO
ELECTRICITY
Energy efficiency in the IRP2010 Rev 2
• Potential vs proposed plan
– 3,420MW vs at least 12,933MW**
** “Research conducted by Eskom indicates that this programme may
only scratch the surface of the potential market for EEDSM (which has
been estimated at 12933 MW of total market potential. ”
(IRP 2010 Rev 2, page 33)
• Impacts
– Costs and electricity price
– Environment
– The ‘needs’ and timing of the build programme
Making choices
• How much electricity do we need? The DEMAND
• What do we want this electricity for? GROWTH
sectors
• How can we use electricity more efficiently and
wisely? EE and DSM
• Using realistic credible costs
• What other national public development priorities
should inform our decision? HEALTH, POLLUTION,
JOBS, CLIMATE CHANGE, UNIVERSAL ACCESS TO
ELECTRICITY
Cost curves without learning
Cost Curves with learning
Transmission and distribution not
modeled
• Important investments
• Effects on EE, DSM and distributed renewable
energy generation
• Assessment of INEP
• Assessment of locational aspects of
generation and demand
The international context not
explicitly addressed
• Globally RE electricity generation investments
overtook investments in conventional (coal,
gas nuclear) in 2008
• Most of South Africa’s major trading partners
have significant energy efficiency and
renewable energy programmes
• Ditto for large renewable energy targets
• EE programmes have been implemented for
decades
Global installed wind power
Source: World Resources Institute / IEA
The nuclear ‘renaissance’ ?
The combined effect of
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Increased energy efficiency and DSM
Lower demand
Learning curves on predicted technology costs
The higher nuclear capital costs than
predicted by EPRI
• More ambitious GHG emissions reduction
targets and lower pollution
• Higher renewable energy levels
• Consideration of industrial development / jobs
Other issues
• The basis for assigning values in the multi
criteria decision framework** is not clear or
defended or the stakeholders listed
– The IRP 2010 Rev document states:
“These preferences are by nature subjective, but by including
numerous stakeholders in the workshops determining these
preferences a broad and inclusive approach to the values can
be determined.”
“This process should include a broad range of stakeholders to
capture all the preferences.”
**see next slide
A Multi-Criteria Decision-Making Framework
Other issues
• Regional hydro options have potential
complex challenges that are not addressed
– Big Dams… Big environmental and social issues for
our partners in the region
– Transmission and distribution investment is a
challenge
• This is noted in the draft but not addressed
The next few years supply vs
demand
IRP 2010 p5
MTRMP p7
Other issues
• There is a need for clarity on next steps in the
IRP
Other issues
• Lack of consistency with what major players
are saying
– Eskom statements about CSP
– DoE statements about solar park
– DoE statements in parliament
• (esp around resources for process = “process issue”)
– Budget expenditure
– Technical capabilities
Alternative scenarios in SNAPP
Elec. system costs irp2 plus
5% ee
Reserve margin 2030 = 20 %
Elec system costs irp2 plus
19% ee
Reserve margin in 2030 = 40%
Electricity system costs
irp2 plus 5% EEDSM
Reserve margin in 2030 = 20%
Electricity system costs irp2 plus 5%
EEDSM plus glimpse of real world
Reserve margin in 2030 = 20%
Electricity system costs irp2
business as usual in real
world
Reserve margin in 2030 = 20%
Electricity system costs
alternative irp2 business unusual in real world
Reserve margin in 2030 = 20%
Overall impressions 1
• Many key issues relate to the modeling and
the assumptions – not the “PLAN”
– The IRP 2010 as it stands is essentially a Capacity
Expansion Plan
• This is (sometimes, but inconsistently) stated
• This is not adequately justified
• “Lack of data” used as explanation for MOST
IMPORTANT omissions – not credible / acceptable
Overall impressions 2
• The “Revised Balanced Scenario” = the “PLAN”
– The scenarios presented do not convince that all
options have been explored
– Shortcomings in modeling and assumptions lead
to some problematic results
• Important options therefore cannot be properly
considered
Issues of interest and potential
concern
(of the PLAN, not the methodology, which is what essentially leads to the deficiencies)
• Alignment with Economic and industrial policies
– The plan appears to pre-empt (some) economic policy
– Does not include information on economic and environmental impacts
• Does not include INEP
– Does not address social policy
– Does not include employment effects
• Does not meet UNFCCC commitments
• Explanation of implementation
– Reasoning behind statements that decisions needed in early 2011
Jobs in South Africa
Employment potential in RE sector in SA
Source: EPRESA report by Agama Energy for Earthlife Africa, 2003
Comparison of all generation technologies:
gross direct jobs/TWh-equivalent
35000
32636
direct jobs
30000
25000
20000
15000
8733
10000
6545
5000
80
130
700
952
1341
nuclear
gas
coal
RETs
Biogas
0
technology
20/06/07
Parliamentary Hearing on Nuclear Energy
Bioethanol
SWH
Biodiesel