Davos – Nuclear power is just one part of a much larger, integrated South African strategy focused on a mix of energy sources that seeks to improve local, regional and pan-African stability and economic growth.
Energy Minister Tina Joemat-Pettersson said her short- to medium-term focus would be on renewable energy, reducing South Africa’s emissions and dependency on fossil fuels.
Currently coal accounts for more than 90 percent of the country’s energy output.
Joemat-Pettersson told Independent Media that gas featured strongly in the short term and that it was definitely a “game changer”.
“In the next 18 months we must bring gas on board, with shale gas being a long-term intervention. Negotiations with Mozambique to increase the gas supply to South Africa are at an advanced stage,” she said during an interview at the World Economic Forum in Davos on Friday.
“If we don’t bring gas on board, we will be overtaken by our neighbours.”
Part of the gas plan is to build power hubs under Operation Phakisa, which is a results-driven initiative setting out clear plans and targets driven by the Presidency.
This approach, among other aspects of the energy plan, has been favourably received by financial institutions and potential investors.
“We discussed the energy mix with our banks so they could see that we are not obsessed with nuclear power,” she said, keeping coy about which financial institutions and companies she had held talks with.
Independent Media understands that she held meetings with Ericsson, Siemens and Standard Bank.
She will also be going to the US shortly to meet with large gas players to assess their levels of interest.
So key is gas to the energy mix that it is also expected that President Jacob Zuma could well use the State of the Nation Address to provide more details on the plans.
Joemat-Pettersson said nuclear was cheaper and had the country accepted and implemented a nuclear energy plan earlier, much of the electricity crisis could have been averted.
Gas, she said, was more expensive than nuclear.
Joemat-Pettersson said nuclear energy was projected to generate 9 000 megawatts.
But nuclear was still “a couple of years away”.
She said the main reason for looking at nuclear energy was due to South Africa being a “dry country” and going ahead with the plan would increase the country’s water stability.
She cited the high volumes of clean water used at the Medupi power plant in Limpopo and the current drought as clear examples of how nuclear energy would be a more sustainable proposition in terms of energy generation.
“We are getting water from Lesotho and we are providing them with electricity. Regional stability is vital to the energy plan.”
Joemat-Pettersson said the plan included looking at helping to build energy capacity in neighbouring countries and further across Africa.
In this regard, South Africa will be pursuing interconnection with the Southern African Developmental Community countries including Botswana, Lesotho, Zambia, Mozambique, Namibia and the Democratic Republic of the Congo.
For South Africa, her focus for the short-term would be looking at unlocking the potential of an energy mix that includes coal, nuclear, gas, hydro and other renewable energies such as solar and wind.
“By 2020 we will be decommissioning 12 coal-fired plants and for that we must have something in place.”
The minister said South Africa was committed to honouring the decisions that were made at COP15.
These include that the emission profile of South Africa’s energy mix peaks around 2020 and falls around 2030; and that. energy efficiency improvements in electricity end-usage play a big role in reducing dependency on fossil fuels.
The renewable energy programme was getting an overwhelming response from foreign investors, she said.
“Renewable energy costs are high and the initial investment (around infrastructure) is high, but will greatly assist the economy. We will have to build towns around these plants and would, for example, need cement and steel.”
In terms of the processes involved, particularly with regards to the nuclear plan, the minister said the plan had been agreed on in 2010 as part of the Integrated Resource Plan and approved was by cabinet.
She is also part of a cabinet energy sub-committee which includes Public Enterprises Minister Lynne Brown, Trade and Industry Minister Rob Davies, Economic Development Minister Ebrahim Patel, State Security Minister David Mahlobo, Mineral Resources Minister Mosebenzi Zwane, and Defence Minister Nosiviwe Mapisa-Nqakula.
She said the nuclear plan had been subjected to intergovernmental processes in which other ministries were involved, and for which she was not solely responsible.
The nuclear plan, therefore was underpinned by transparent processes and affordability, Joemat-Pettersson said.
“The first step is intergovernmental agreements. The second is requesting information and the third is request for proposals,” she said.
These proposals are then sent to the Independent Power Purchase office which “has credibility and a requisite range of skills” and which has to “test the proposals”.
These experts are from the Treasury, the Department of Energy and the Development Bank of South Africa.
“Because there is no interference, business interest is oversubscribed. There is nothing shrouded in secrecy. I am not starting the process, I’m implementing what’s already there,” she stressed.
Joemat-Pettersson said the energy plan was crucial for the next 100 years. “If we get this wrong, the country will suffer a legacy of compromise.”
Solar energy received a boost on Monday, when Energy Minister Tina Joemat-Pettersson announced a new power procurement project in the Northern Cape to deliver 1 500 MW of solar energy.
The additional procurement was a Department of Energy legacy project to mark the SA International Renewable Energy Conference taking place in Cape Town this week.
“It is a ministerial legacy project to ensure we remember this conference,” the minister told media after her opening address on Monday.
The announcement is the first step in a process that will seek bids from independent power producers (IPPs) and will likely only feed into the grid between 2019 and 2020.
Renewable energy is gaining steam both in South Africa and globally and SA’s IPP programme has been heralded as a success story.
With a target of 5 000 MW of solar energy and 5 000 MW of wind energy by 2030 in place, the IPP office has successfully attracted much-needed investment in the renewable energy sector.
In April, the minister approved 13 new renewable IPP bids, which means there will now be 79 IPP projects with 5 243 MW being added to a national grid desperately in need of power.
“To date, more than 6 000 MWh of electricity had been procured from 37 renewable-energy IPPs,” said Joemat-Pettersson.
“To date, renewable energy projects in South Africa have resulted in 20 000 jobs for South Africans and attracted R192.6bn in investment,” she said.
IPP office for Africa
Joemat-Pettersson said the IPP office mandate will come to an end in this month and will be reshaped to grow its level of influence in South African and in the broader continent.
“The IPP office is a success story that we would like to duplicate in other countries,” she said. “The reshaping of the office has started in earnest and will have a larger mandate.
“We would like to invite businesses and stakeholders to comment on what it is they appreciated in the office and what we could do better,” she said. “The success story is because we pulled together a sound group of skills, which allowed us to work effectively and efficiently to meet time frames.
“Policy certainty around the programme and integration with other demands has allowed the programme to be sustainable,” she said. “We must build on the success of this innovation, but look at transferring skills and technologies.”