The National Planning Commission s Energy Plan for South Africa

Transcription

1 The National Planning Commission s Energy Plan for South Africa Prof Anton Eberhard Management Program in Infrastructure Reform and Regulation University of Cape Town Member of the National Planning Commission

2 South African Energy Filière ENERGY DEMAND USES ENERGY DEMAND SECTORS DELIVERED ENERGY/FUELS ENERGY CONVERSION SECTORS PRIMARY ENERGY SUPPLY WIND SOLAR CHEMICAL URANIUM HYDRO INDUSTRY ELECTRICITY ELECTRICITY GENERATION HEATING COAL DOMESTIC COAL COAL COKE & COAL GAS COKE & COAL GAS MECHANICAL CTL SYNFUEL LIGHTING TRANSPORT COMMERCE PETROL AUTOMOTIVE DIESEL OTHER PETROLEUM PRODUCTS CHEMICAL GTL SYNFUEL COAL EXPORTS NATURAL GAS AGRICULTURE WASTE EG: BAGASSE REFINED CRUDE IMPORTED CRUDE OIL Source: M Beare 2010, adapted from Eberhard, A & Trollip, H (1994) FUEL WOOD, CHARCOAL ETC MARINE BUNKERS CRUDE EXPORTS BIOMASS

3 DEMAND Private State

4 DEMAND regulated prices market prices

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6 We need an energy sector that promotes economic growth and development Competitive energy prices Security of supply Quality of supply Job creation social equity Expanded access Pro-poor tariffs & complementary strategies environmental sustainability Climate change mitigation Local environmental controls (air & water quality) supported by good governance Policy, institutions, regulation and competitive markets

7 The good and the bad since 1994 Major gains in widening access to electricity from 35% to >80% of households! Reliable and cheap electricity until 2005 but new investment too late and now security of supply under threat (generation and distribution) and prices have trebled between 2007 and 2012 (in nominal terms) or doubled in real terms Petroleum prices closely track international oil prices, some worries on adequacy of supply infrastructure, slow adoption of international environmental standards

8 The good and the bad since 1994 Coal is 4 th largest export earner (R50bn in 2011), but exports are stagnating because of inadequate rail infrastructure Significant BEE gains in coal mining and exports (above 30%) Dependence on coal has increased. 13 th largest CO 2 emitter globally. Energy intensity (kwh/gdp) declining since 1997, but incentives and programmes promoting energy efficiency still modest between times worse than OECD average Renewable energy still minor contributor Energy issues cut across a number of government departments DOE, DMR, DEA, DPE, DED, Treasury, DTI, etc Need for better coordination and more consistent progress

9 Primary challenges Reduction of the carbon of our energy economy intensity Investment for securing supply of electricity, liquid fuels and gas Innovation & job creation in new RE and EE industries Protecting the poor from rapidly increasing energy prices Maximising energy export income

10 South Africa s coal fields Waterberg Witbank - Highveld Ermelo Richard s Bay Coal Terminal Economically recoverable reserves & resources 66 billion tons of which 48 in Waterberg (CGS, 2011)

11 Coal Trade Flows 11

12 Capacity Mt/a Richards Bay Terminal Capacity Expansion Transnet capacity Port capacity Inadequate rail infrastructure is restricting exports

13 South Africa s coal fields Waterberg Witbank - Highveld Ermelo Richard s Bay Coal Terminal Ensure domestic security of coal supply for existing power stations through industry compact and more comprehensive coal field planning Expand capacity of Richard s Bay coal line

14 South Africa s coal fields Waterberg Witbank - Highveld Ermelo Richard s Bay Coal Terminal Heavy haul rail line needed from Waterberg

15 Gas Go ahead for West Coast gas-to-power LNG import infrastructure Explore economics of new Mozambique gas pipeline for power and GTL Shale gas exploration + plus environmental investigations Develop National Gas Infrastructure Strategy

16 Nuclear Independent investigation of cost and financing implications, institutional arrangements and time lines Plan B (with more gas and renewables) should nuclear costs be prohibitive, financing too difficult and time-lines too short

17 Renewable energy Support procurement of 20,000 MW of renewables by 2030 Assess sustainability of REIPPP in terms of prices and financing Build local capacity for competitive procurement Build local industry

18 Restructuring of Electricity Market Eskom Holdings Eskom Gx Imp Exp IPPs Minister of Energy ISMO Buyer Scenarios Planning Allocation Integrated Resource Plan Determinations System Operator Final PPA Procurement Transmission KSACS D (Regions 1-6) Mun Mun KIC C C C C Source: Meridien Economics Economics

19 Restructuring of EDI Focus on 12 largest cities/towns (who supply 80% of municipal electricity) Ring-fence electricity businesses Implement ADAM Eskom or metros to take over non-viable small distributors 7 year fiscal plan to deal with maintenance backlog, disbursed via DoE (cf INEP) NERSA to enforce annual maintenance spend Revise National Electrification Plan

20 Liquid Fuels Upgrade existing refineries to meet new clean fuel standards (with appropriate costrecovery model) Delay investment in new refinery until import deficit warrants efficient scale refinery Explore new GTL possibilities Invest in regional oil fields

21 Transition to low carbon economy Already overshot carbon cap?

22 Carbon intensity of electricity sector will fall by a third Integrated Resource Plan Sources of energy supply Capacity installed EoY in GW PV 80 CSP Wind Hydro 60 Nuclear OCGT Energy mix Electric energy supplied in TWh p.a. PV CSP Wind Hydro Nuclear CCGT/OCGT Renewable TWh's in 2030 (14%) Carbon free TWh's in 2030 (34%) 40 CCGT 200 Coal 20 Coal 100 Source: South African Integrated Resource Plan Note: Pumped storage capacity of 1,4 GW in 2010 and 2,7 GW in 2030 is not included since it is a net energy user CO 2 intensity 912 g/kwh 600 g/kwh -34% 22 Source: Meridien Economics Economics

23 Changing the energy mix Total additional new capacity (without committed) until 2030 in GW Integrated Resource Plan % 23% 6% 6% 9% 42% 17,8 Share of total new GW 15 8,4 Solar PV ,3 9,6 2,6 Impor t 2,4 3,9 1,0 8,4 CSP Wind Committed new builds 0 Coa l Nuclea r Hydr o Gas - CCGT Peak - OCGT Renew -ables 10,1 0,0 0,05 0,0 1,0 1,0 Existing fleet (2010) 35,5 1,8 2,1 0,0 2,4 0,0 Energy share 2010 = 260 TWh 2030 = 454 TWh 90% 5% 5% 0% < 0,1% 0% 65% 20% 5% 1% < 0,1% 9% 23 Source: Meridien Economics Economics

24 SA Electricity Prices ( ) Real (2008 values) Nominal

25 What about implementation of the plan? Plan handed to President Zuma in Parliament in Aug 2012 Plan adopted by Cabinet in September 2012 "If there are inconsistencies, the national plan (NDP) will have an overriding effect. It's a matter which has been accepted. Collins Chabane: Minister in the Presidency The NPC will: Work with DPME and other government departments to mainstream plan Advise government and the broader society on implementation of the plan Help to build constituencies of support for implementation Undertake further research to deepen plan

26 Cycle of development 26

27 NATIONAL DEVELOPMENT PLAN 2030 Our future - make it work 28 September 2012