The closing date for registering to participate in one of the biggest
energy-related policy processes in South Africa, the national Integrated
Resource Plan (IRP) 2 passed this Monday. The process is to set the
electricity planning agenda for 25 years; determining the role for
renewable energy, nuclear energy, coal-fired power, the independent
power producers and thus the role of Eskom, imports, and the country’s
carbon reduction commitments. The policy will also likely hold
implications for the region, in which South African energy interests are
invested and Eskom’s tentacles gripped. But there are several aspects to
the formation of the IRP2 that already look problematic. Some of these
issues stand aside from it following a highly flawed IRP1 process;
government having already approved the controversial new infrastructure
build programme, initially pegged at R343 million, and publicly
announced intentions to expand nuclear; and the electricity regulator
having approved two tariff hikes.

There is no doubt that South Africa needs to extricate itself from
dependence on cheap, dirty electricity on which it claims to have
achieved global competitiveness for decades. Almost 80% of South
Africa’s greenhouse gas emissions are generated by the energy sector and
the country is ranked amongst the top twenty energy-related emitters in
the world. Government, or at very least the lead department for climate
change, the Department of Water and Environmental Affairs (DWE), that is
drafting a policy later this year, acknowledges this. In particular,
they emphasise that the country must diversify its energy mix, establish
far-reaching energy efficiency measures, invest in the development of
new and cleaner technologies and industries, and begin the journey to a
far lower carbon economy. They also consider the need for carbon
constraints and for substantial emission reductions in the energy sector
to be central to the energy policy processes, of which the IRP2 is key.

But thus far the process has been contentious. The timetable being
pursued is extremely ambitious with just five months until the IRP2
policy is gazetted. This will include an extremely involved drafting and
stakeholder consultation around the parameters, modeling of scenarios
and producing the draft IRP2. The Department of Energy (DoE) has thus
far provided vague dates for these to happen, although they indicate
that a ‘stakeholder pack’ will be sent to all those who have registered
to be involved. This notwithstanding the poor advertising for the
process, which was announced in only a small selection of newspapers.

Then there is the matter of the special task team that has been
appointed by the Department to run the entire process. Representatives
from big industrial companies including Xtrata, AngloAmerican, and BHP
Billiton have been appointed to the team. BHP Billiton is one of the 138
corporations who have benefited from special pricing agreements with
Eskom, having received power at 12c per kwh which is below even the cost
of production. The team is also rumoured to be run by Shaun Nel of
Gobodo Systems Consulting who was contracted to coal industry, and the
role of the team opaque, as they have been asked to sign confidentiality
agreements in which they are not allowed to speak directly with the
public or the media. It is telling that the favourable treatment
industry already received from government is echoed in the running of
the process. More to the point, the process reflects a serious conflict
of interest that pits elite lobbying interests against national public
interests, in a situation where the majority of people suffer the brunt
of punishing electricity price hikes and live in energy poverty. These
issues are particularly stark when considering that community and civil
society representation is glaring by its absence.

The draft parameters of the IRP2 list a set of assumptions with serious
gaps in it. As far as the supply side goes, the key assumptions appear
to include an unquestioning acceptance of a continued reliance upon coal
and nuclear. The assumption that the new build programme is going ahead
as initially envisaged back in 2008 is a source of serious concern.
Kusile, the coal-fired power station that is next in line in the new
build programme after Medupi, is considered a done deal. This despite
the fact that there is no money for such a massive project; Eskom
declared a funding gap of R110 billion in the next three years and R190
billion in the next seven years in a presentation on its funding model
to the Portfolio Committee on Public Enterprises on Tuesday. There will
also be no savings on carbon emissions. In fact, Kusile (like Medupi)
will emit 24 megatons of carbon, equivalent to Norway’s (or a small
Western European country’s) entire emissions. Clearly, the station needs
to be considered a business-as-usual scenario rather than an assumption.

Eskom’s presentation also contained veiled threats about security of
supply, with a firm message that the new build options must continue and
“cannot be deferred” to prevent “negative consequences for the economy”.
In fact, many, if not most of the parameters are about security of
supply to the exclusion of environmental considerations. Nuclear and
renewables (as one unit) are the only carbon-related parameters. If one
reads the Eskom presentation and the DoE presentation together there is
a certain harmony of thinking that ought not to be there if the IRP2
policy is a forward-looking document. Perhaps Eskom’s funding model,
which places its own survival next to security of supply, should be a
critical departure (or fault line) for the DoE. Locking in these
assumptions, or accepting the conventional wisdom, will ultimately mean
that genuinely exploring renewable options to meet carbon emission
targets, and diversifying power supply options including considering
independent power producers, will be effectively taken out of the mix.
Supply options particularly need to consider the kind of technologies
that will appeal to other aspects of democracy, like diversifying and
democratizing ownership, and the role of clean technologies in
contributing to environmental or health improvements. Getting
nuclear-driven, foreign companies like Areva driving solar in the
country sets up other complex questions which IRP2 must grapple with.

The variables should also consider demand side management. This should
not only relate to energy efficiency measures but to changing (or rather
reducing) demand. Considering that up to 75% of electricity is used by
industry, the effort should be on transforming industry itself, changing
prices to make electricity a more valuable resource for them, which is
also an equity issue, and diversifying to smaller industries. These
should be considered amongst other considerations that directly
challenge some of the myths around demand that may be created in order
to justify untenable new build projects.

Clarity and consensus on the concepts is also vitally important if just
and effective outcomes are to be achieved. Yet in the DoE presentation
the goal isn’t clear - “sustainable development” is in fact used
interchangeably with “sustainable economic growth”. Development is not
contingent upon growth, at least not where growth means gross domestic
product, which is the interpretation most consistent with government
thinking.

Then, in the context of the IRP2 planning there is mention of
“externalities” which is an odd and obfuscating construction of
language. Aside from the concept being highly contested, because it
reduces environmental, health and social factors to a narrow
quantification of their economic costs, these factors are actually
excluded from the list of externalities altogether. The limited scope of
the list only includes emissions and then a motley collection of issues,
including financing and policy directions on technology. It is also
questionable that policy directions on coal, nuclear and renewable
energy should be considered an externality. Should the IRP2 not be
determining the policy direction of technology development and
deployment if it is a long-term plan and not the other way around? The
way the process is currently set up creates the impression that once
again elite lobbying interests desire to drive central policy choices by
disaggregating them. This may be part of a tendency within Eskom that
has resulted in the edging out renewables.

The concept of ‘clean’ is also varied and should be clarified. One of
the parameters implies that nuclear power would address climate change
concerns and should thus considered ‘clean’, but this is highly
contested. Clean coal is another fractious issue. Government has
recently boasted that Medupi will be using supercritical coal technology
(‘clean coal’), which emits fewer greenhouse gases, and will thus be
applying for carbon credits. As the difficult days lie ahead, careful
attention must be paid to drafting a final policy whose process has
integrity. The consolidation of a democracy is dependent on it.
 http://www.ukzn.ac.za/ccs/default.asp?2,40,5,2035