South Africa is currently facing a severe load shedding crisis, and the Presidential Climate Commission (PCC) has backed a proposal put forward by Energy Minister Kgosientsho Ramokgopa to extend the service of aging coal-fired power plants. The plants were due to be decommissioned in line with the Integrated Resource Plan (IRP) 2019, but this move aims to address the country’s current power crisis.
According to Dr. Crispian Olver, the executive director of the PCC, the extension will not have significant implications for the country’s nationally determined contributions (NDCs), but it is crucial to keep the lights on. He stressed that there are sound economic reasons for decommissioning the coal plants when they reach the end of their economic life. However, extending their life by a year or two to cope with the current power crisis could take advantage of opportunities to pull these plants off as the country builds up its generation capacity.
The JET-IP: A five-year plan with IPG partners
The energy minister’s plan formed part of the just energy transmission investment plan (JET-IP) program, which focuses on electricity, electric vehicles, and green hydrogen power. The program is a five-year plan led by International Partners Group (IPG), including Germany, France, the UK, the EU, and the US. They have collectively provided USD 8.5 billion (approximately R1.6 trillion using Monday’s exchange rate) to decommission old coal-fired power plants, which is the primary focus of this plan.
The head of the national energy crisis committee (NECOM) secretariat, Rudi Dicks, announced that France and Germany have already handed over their grant money to Pretoria. He added that the IPG partners stressed the need for a detailed plan on how the funds would be utilized. Olver, however, warned about the lack of capacity to prevent theft and corruption through the use of this money when the process gets underway.
JET-IP needs a fiscal review to integrate the investment plan
Olver recommended that the JET-IP be closely integrated into the government’s overall fiscal policy. He suggested that National Treasury undertake a fiscal review to integrate the investment plan into the medium-term expenditure framework (MTEF). He also emphasized the need for clarity on financing the installation of 8500km of transmission line by 2031 in Eskom’s transmission development plan.
Furthermore, Olver suggested that a capacity assessment must be put in place, followed by strong government and accountability measures to address the barriers to implementation.
A long-term perspective on implementation
The allocated five-year period for the plan is not sufficient, said Olver, who floated the idea of a second five-year phase of implementation to achieve a complete energy transition properly.