Mokgadi Mathekgana

Chief Director: Clean Energy

Dept of EnergySouth Africa

MANDATE & MISSION

MANDATE

• Ensure secure and sustainable provision of energy for socio-economic development

MISSION

• To regulate and transform the sector for the provision of secure, sustainable and affordable energy

VISION

VISION 2010

• A transformed and sustainable energy sector with universal access to modern energy carriers for all by 2010

VISION 2025

• Improving our energy mix by having 30% of clean energy by 2025

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STRATEGIC OBJECTIVES OF THE DEPARTMENT

• Diversified energy mix,

• Improved access and connectivity,

• Provision of quality and affordable energy,

• Promote safe use of energy, and

• Transform the energy sector.

Energy Flows Informing the Strategic Objectives

Oil

SUPPLY TRANSFORM TRANSPORT END USE

Natural Gas

Coal

Gas

ElectricityEskom

and Others

Coal

PetroSA

Export

Sasol

Road/Rail

Pipeline

Oil Refineries RailRoad

Pipeline

LiquidFuels

Biomass WoodPerson/Road

HydroNuclear

TransmissionWires

“Washery”

Koeberg

Sasol

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ENERGY FLOWS INFORMING THE STRATEGIC OBJECTIVES

• Electricity supply sector dominated by the national utility, Eskom

• The entire Africa’s energy capacity of about 68 gigawatts

• Eskom is responsible for almost 60% of electricity generation, and 95 percent in South Africa

• About 90 per cent of electricity generation is from coal, remainder shared between nuclear and hydro including pumped storage

• RE generation is miniscule – a total of 24.1 MW recently added from small scale hydro (8.5MW); landfill/biogas to electricity (10.4MW); wind(5.2MW)

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HOW DO WE PLAN TO CHANGE THIS PICTURE?

• Appropriate Regulatory mechanisms required

• Finance – collaboration between governments, international investors and donors is the ONLY way

• Continuous Research and Demonstration to bring currently under utilised sources into full commercialisation

• Full utilisation of available renewable resources to complement fossil fuel use particularly within the region

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COLABORATION BETWEEN GOVERNMENTS, , NATIONAL&INTERNATIONAL INVESTORS AND

DONORS

• Africa is rich in clean energy potential and only a small portion is currently exploited.

• The challenge for us is how we deploy the continent’s sizable pool of this potential for a transformational scale up to significant economic development and climate benefits.

• No country has managed to reduce poverty and achieve economic development without increasing access to modern forms of energy.

• This challenge goes beyond any one country or institution hence we need to forge partnerships.

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FACTORS THAT GUIDES AND DRIVE THE ENERGY SECTOR IN SOUTH

AFRICA

Poor economic regulation

Upward pressure on

cost of energy

Climate change (Clean energy)

Demand management

Skills and capacity

Energy security

Access to energy

Diversity of supply

Safety

International cooperation

Energy sector

SOLAR RESOURCE POTENTIAL

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SOLAR RESOURCE POTENTIAL (1)

SOUTH AFRICA’S SOLAR RESOURCE POTENTIAL

� South Africa’s solar resource is among the best in the world, making it an ideal location for solar power generation.

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REGULATORY INTERVENTIONS: LEGISLATION AND INTEGRATED RESOURCE PLAN

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LEGISLATIVE INTERVENTION Energy Act of 2008 • This is the primary legislative instrument that governs the evolution and transformation of the South African energy economy. It seeks to ensure that diverse energy resources are available in sustainable quantities and at affordable prices to the South African economy in support of economic growth and poverty alleviation.

Electricity Regulation Act as Amended•One of the objectives of this Act is to “promote the use of diverse energy sources and energy efficiency”. •The Act has a provision for new generation capacity. In this provision, “The Minister may, in consultation with the Regulator determine that new generation capacity is needed to ensure the continued uninterrupted supply of electricity and determine the types of energy sources from which electricity must be generated, and the percentages of electricity that must be generated from such sources.”

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INTEGRATED RESOURCE PLANNING

• South Africa promulgated its first Integrated Resource Plan (IRP) in December 2009 which outlined 1025 MW.

• Second IRP “dubbed” Integrated Resource Plan 2010 on 6 May 2011.

• IRP 2010 is a “living” plan, which will be updated on an ongoing basis to reflect the changing needs of South Africa and to learn from the inevitable changes in our economical, social and technological environment.

• It is the first IRP that government directed must seek to find a balance between competing government objectives i.e.:• Affordability, Reducing carbon emissions (Towards a

Green Economy), Water conservation, Localisation, and Regional development.

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� The IRP must balance economic, social and environmental objectives

� It should provide affordable energy,

� while ensuring security of supply,

� providing opportunities for creation of local industry clusters,

� and helping to achieve the emission targets committed to in Copenhagen

Balancing the Tensions Between Objectives

Decreasing costs of renewables allow for a higher renewables share at the same total system costRevised Balanced Scenario and Policy-Adjusted IRP in comparison

Total additional new capacity (without committed) until 2030 in GW

5

20

15

10

0

Wind

CSP

Solar PV

1,0

Peak -�OCG

T

Coal

3,9

8,4

9,6

6,3

3,0

8,4

17,8

Renew-ables

Nuclear Gas -�CCGT

2,42,6

6,6

Hydro

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Total additional new capacity (without committed) until 2030 in GW

1,93,35

Nuclear

9,6

Coal

6,3

Gas -�CCGT

Hydro

20

15

10

0Renew-�ables

11,4

Peak -�OCG

T

5,8

5,0

1,3

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Before consultation process:Revised Balanced Scenario (RBS)

After consultation process:Policy-Adjusted IRP

Own build Binding

Subject to later revision

10,1 0,0 0,05 0,0 1,0 1,0 10,1 0,0 0,05 0,0 1,0 1,0Committednew builds

35,5 1,8 2,1 0,0 2,4 0,0Existing fleet (2010)

35,5 1,8 2,1 0,0 2,4 0,0

Import

Import

65% 20% 5% 1% < 0,1% 9%65,5% 20% 6% 0,8% 0,2% 7,5%

90% 5% 5% 0% < 0,1% 0% 90% 5% 5% 0% < 0,1% 0%Energy share

in 2010

in 2030

16% 25% 9% 5% 15% 30% 15% 23% 6% 6% 9% 42%Share of total new GW

ΣΣΣΣ = 260TWh

ΣΣΣΣ = 454TWh

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INTEGRATED RESOURCE PLAN (1)• Primary objective is to determine long term

electricity demand and detail how this should be met in terms of generation type, timing and cost.

• Accuracy of this plan is improved by regular reviews and updates as and when things change or new information's becomes available.

• A determination regarding the Integrated Resource Plan 1 and New Generation Capacity Regulations (Gazette No. No.32898, 29 January 2010) was promulgated.

• This first short term plan covers the years 2010 –2013 which enabled NERSA’s Multi-Year Price Determination (MYPD).

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INTEGRATED RESOURCE PLAN (2)

• IRP 1 provided for 1 025 MW of renewable-based electricity generation by 2013, broken down as follows: • 700 MW from wind; 200 MW from CSP• 125 MW from other technologies• Beyond IRP1 it was imperative to have a long

term plan, hence the development of IRP 2010

• IRP 2010 allocates 17,800 MW (42%) of renewable energy based electricity generation by 2030

• 8 400 MW Wind• 8 400 MW Solar PV• 1 000 MW CSP• A determination regarding the IRP 2010 for

Electricity over the period 2010-2030 (Gazette No. 34263, 6 May 2011) was promulgated in May 2011.

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Long lead times for power generators & related infrastructure require timely firm commitments

New build optionsCoal

(PF, FBC, imports, own

build)

Nuclear Import hydro Gas – CCGT Peak – OCGT Wind CSP Solar PV

MW MW MW MW MW MW MW MW2010 0 0 0 0 0 0 0 02011 0 0 0 0 0 0 0 02012 0 0 0 0 0 0 0 3002013 0 0 0 0 0 0 0 3002014 5001 0 0 0 0 400 0 3002015 5001 0 0 0 0 400 0 3002016 0 0 0 0 0 400 100 3002017 0 0 0 0 0 400 100 3002018 0 0 0 0 0 4004 1004 3004

2019 250 0 0 2373 0 4004 1004 3004

2020 250 0 0 2373 0 400 100 3002021 250 0 0 2373 0 400 100 3002022 250 0 1 1432 0 805 400 100 3002023 250 1 600 1 1832 0 805 400 100 3002024 250 1 600 2832 0 0 800 100 3002025 250 1 600 0 0 805 1 600 100 1 0002026 1 000 1 600 0 0 0 400 0 5002027 250 0 0 0 0 1 600 0 5002028 1 000 1 600 0 474 690 0 0 5002029 250 1 600 0 237 805 0 0 1 0002030 1 000 0 0 948 0 0 0 1 000Total 6 250 9 600 2 609 2 370 3 910 8 400 1 000 8 400

Firm commitment necessary now

Final commitment in IRP 2012

1. Built, owned & operated by IPPs 2. Commitment necessary due to required high-voltage infrastructure, which has long lead time 3. Commitment necessary due to required gas infrastructure, which has long lead time 4. Possibly required grid upgrade has long lead time and thus makes commitment to power capacity necessary

RESEARCH AND DEVELOPMENT RESULTS TO BE INCLUDED IN IRP

Future IRPs will cover topics that were raised during the IRP2010-2030 processResearch Agenda for IRP 2012

• Decision making under uncertainties and risk assessment for key IRP scenarios

• Outlook 2050 – implications of further greenhouse-gas reduction in primary energy mix for all sectors on the power sector

• Distributed Generation (DG) and off-grid generation (island grids)

• Grid integration of fluctuating renewables incl. smart grids androle of storage and we are taking into account risks associated with technologies by applying different discount rates for different technologies

• Assessing new technology options in more detail, like regional hydro options (specifically Inga), small hydro and biomass (including forest residues, bagasse, and biogenic municipal solid waste)

• Effect of decommissioning large parts of the existing coal fleetafter 2030

• Potential impact of price sensitivity on energy demand,• Potential impact of substitutes for electricity, like other heating

technologies, etc.

High-impact topics

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FINANCING RENEWABLE ENERGY PROGRAMS

RE IPP PROCUREMENT PROGRAMME

• A Request for Proposals on a competitive bidding process was issued on 31 July 2011, starting procurement of the first 3 725 MW by 2016.

• 1 450 MW for solar PV, 200 MW for Concentrated Solar Power,

• 12.5 MW for biomass, 12.5 MW for biogas,

• 1 850 MW for onshore wind,

• 25 MW for landfill gas, 75 MW for small hydro and

• 100 MW for other small projects for less than 5MW.

• The projects need to reach financial close by June 2012 and construction is expected from 2012 to the end of 2016.

• Subsequent to this IPP procurement programme a separate procurement documentation will be made available for the participation of small and emerging players in the field of RE

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SA SOLAR ENERGY

PROGRAMMES

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NATIONAL SOLAR WATER HEATING

PROGRAMME• The national Solar Water Heating (SWH) programme

has a target of 1 million SWH to be installed by the end of 2014/15 financial year.

• This programme has both electricity demand side management & socio-economic objectives as it seeks to:

• Reduce energy consumption by installing quality solar water heating systems in residential, commercial and industrial areas;

• Defer further building of another power station (other than the planned ones);

• Contribute towards SA’s Renewable Energy targets (2013);

• Contribute towards government’s socio-economic imperatives (e.g. job creation, improved livelihoods, service delivery, etc.)

• Provide easy access to hot water services to marginalised communities.

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SOLAR PARK PROGRAMME – NORTHERN CAPE INITIATIVE

SOLAR PARK PROGRAMME:NORTHERN CAPE

INITIATIVE• A pre-feasibility study was conducted which indicated

that solar power can be deployed in large quantities over the next decade at costs that will become competitive with coal-fired power.

• The pre-feasibility study estimates that a 5 GW Solar Park can be constructed over nine years in the Northern Cape Province.

• This 5 GW programme could result in the creation of approximately 12,300 average annual direct construction jobs.

• From these positive results, Cabinet approved the undertaking of a full feasibility study which is expected to be completed before the end of 2012 calendar year.

• Due to the magnitude of the project, it was decided that the project will be rolled out in different phases & will be technology neutral.

• The outcomes of the feasibility study will provide a clear direction on how the programme will progress.

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SOLAR PARK PROGRAMME:NORTHERN CAPE

INITIATIVE• The Eskom site for a 100MW CSP demonstration

plant is situated alongside the site where the first phase of the 1000MW will be established.

• This demonstration plant will be based on the Central Receiver technology with molten salt storage suitable for base load application.

• Eskom’s expansion requires large scale diversification into lower carbon technologies and this diversification will be based on the lessons learned from this demonstration project.

• South Africa’s solar resources and the advantages of a central receiver make this project choice an attractive option.

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CONCLUSION

• Policy is necessary to drive behavior and technological transformation, but not sufficient on its own.

• Investors and component manufacturers need to assist governments in lowering the costs of renewable energy technologies – collaboration by the whole value chain.

• Strengthening collaboration on best practices with those alreadyadvanced in the energy sector for example, the Austrian sector will benefit African countries.

• South Africa is ready to roll-out the first largest solar park in the world and all the lessons drawn out of this experience will be shared with all the African countries and the rest of the World.

• Regional Integration is the key to energy security and maximum utilisation of natural energy resources (see the Map below for how South Africa envisages integration of renewables through the IRP).

Potential Energy Future – 2030 Envisages More Regional Integration

CO

NG

OGABON

KENYA

BURU

NDI

ZAMBIA

MOZAMBIQUE

MALAWI

TANZANIA

ANGOLA

BOTSWANA

DR CONGO

NAMIBIA

ZIMBABWE

SOUTH AFR

ICA

LESO

THO

SWAZILANDSWAZILANDSWAZILANDSWAZILAND

HYDRO

GASGA

S

COAL

GEO-THERMAL

WINDNUCLEAR

WIND

WIND

CSPPV

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THANK YOU FOR YOUR ATTENTION

http://www.energy.gov.zaMs Mokgadi Mathekgana

Chief Director: Clean Energy

Tel: +27 (0) 12 444 4147

Cell: +27 (0) 82 449 7550

E-mail: Mokgadi.Mathekgana@energy.gov.za