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Will SA’s new energy plan shed light on Eskom?
The Integrated Resource Plan (IRP) for short 2019 was finally gazetted today by the Minister of Energy and Mineral Resources, Gwede Mantashe. But the plan comes against the backdrop of power cuts. So how can it help Eskom's current situation? CNBC Africa’s Karabo Letlhatlha spoke to Energy Expert, Chris Yelland for more.
Fri, 18 Oct 2019 15:31:17 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The importance of having an updated IRP to provide policy and planning certainty amidst changing energy landscapes
- The lack of new nuclear projects in the IRP up to 2030 and the potential implications for the nuclear industry
- The role of renewable energy in driving down costs, attracting private investments, and shaping a more sustainable energy future
South Africa's long-awaited Integrated Resource Plan (IRP) for 2019 was finally gazetted by the Minister of Energy and Mineral Resources, Gwede Mantashe. The unveiling of this plan comes amidst a backdrop of power cuts that have plagued the country, raising concerns about the stability of the energy sector. To shed light on how this new IRP could potentially address Eskom's current challenges, CNBC Africa's Karabo Letlhatlha sat down with energy analyst, Chris Yelland, for insights and analysis.
Yelland began the discussion by highlighting the importance of having an up-to-date IRP in place, emphasizing the detrimental impact of the eight-year gap since the last revision. He pointed out that the recent load shedding was a clear indication of the policy, regulatory, and planning failures within South Africa. The release of the new IRP was met with relief by industry experts like Yelland, as it provides a long-overdue roadmap for the country's energy future.
The energy landscape is rapidly evolving with advancements in technology, changing pricing structures, and economic fluctuations. Yelland stressed the necessity of updating the IRP every two years to ensure policy and planning certainty. By creating a conducive environment for investment, South Africa can avert the recurring blackouts and supply shortages that have become all too familiar.
One of the key topics of discussion was the absence of new nuclear projects in the IRP up to 2030. Yelland expressed that the nuclear industry would likely be disappointed by this exclusion, as the plan primarily focuses on extending the lifespan of existing nuclear facilities rather than investing in new capacity. He debunked the notion that nuclear energy is a cost-effective solution by highlighting the significant expenses associated with construction, financing, decommissioning, and waste management.
Renewable energy emerged as a crucial component of South Africa's energy mix in the conversation with Yelland. While acknowledging the initial high costs of renewable energy projects, he emphasized that the prices have plummeted over time. Yelland viewed the first three rounds of the renewable energy Independent Power Producer (IPP) program as necessary steps towards driving down costs and gaining industry experience. With the increased procurement of renewable energy, complemented by gas-to-power and battery storage solutions, Yelland envisioned renewable energy as the most cost-effective option for future energy generation.
The discussion also touched on the government's approach to engaging private sector players in the energy sector. Yelland cautioned against abrupt policy shifts that could undermine investor confidence and called for a stable and conducive environment for private sector participation. By learning from past experiences and leveraging the declining costs of renewables, South Africa has the potential to attract more private investments and drive sustainable energy development.
In conclusion, the new IRP signifies a step in the right direction for South Africa's energy sector, offering a strategic roadmap for addressing current challenges and paving the way for a more sustainable and reliable energy future. While there are areas of concern, such as the absence of new nuclear projects, the emphasis on renewable energy and the need for policy consistency are encouraging signs for the industry and investors alike.
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