SA has a lot of catching up to do in the energy sector

Political, labour and business interference in the energy sector policy-making process has for eight years proven to be a stumbling block in government concluding the much-awaited Integrated Resource Plan (IRP), which could have seen hundreds of billions of rands in new investments being unlocked and electricity prices being lowered in South Africa, energy expert Chris Yelland said yesterday.

So intense has the interference from stakeholders with vested interests on the energy policy direction been during the Jacob Zuma presidency, that years of delay in finalising the IRP have made it difficult for energy ministers to procure new energy generation capacity.

Delivering a keynote address at the Africa Oil and Power event in Cape Town yesterday, Mineral Resources and Energy Minister Gwede Mantashe was bullish that the IRP would be concluded soon.

“By Wednesday, the IRP will be gazetted,” said Mantashe. “The plan will lay the foundation for investment in power generation.”

While cautiously welcoming Mantashe’s remarks, Yelland expressed scepticism on government’s timeline – taking into account that the draft plan would first go to Cabinet on Wednesday and that changes might be proposed before being approved – paving the way for it to be gazetted.

On why the IRP has taken long to be concluded, Yelland said that under the Zuma administration, the country saw frequent Cabinet reshuffles in the energy portfolio. On what was needed to address the current energy crisis, Yelland said: “Getting the IRP finalised soonest is the starting point. You then introduce diversity in the energy sector by moving away from a single generation company called Eskom, which should be unbundled.

“If you have several electricity generation companies, you mitigate the risk of the country being dependent on Eskom alone.

“Coal accounts for 80% of our power generation and you need to move away from heavy reliance on coal by bringing in an energy mix that includes solar, hydro and wind as sources.”

Nuclear energy, said Yelland, was “more long term”.

“It takes 10 years to build a nuclear reactor, which becomes an expensive mega project.

“We need to build smaller and flexible power stations to avoid cost overruns we have seen at Medupi and Kusile.”

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