Integrated Resource Plan (IRP)
The IRP is a road map for the country’s transition to a low carbon economy
As the electricity infrastructure development plan for the country, the IRP is to be based on least-cost electricity supply and demand balance and is to consider security of supply and the environment (minimize negative emissions and water usage).
The National Development Plan 2030 took as a point of departure the IRP 2010–2030 that was promulgated in 2011 and which (among other) paved the way to the now well-known Renewable Energy Independent Power Producers Programme (REIPPP)[1]. At that time, it was also envisaged that the IRP would be a “living plan” to be revised by the Department of Energy frequently.
With the prices for Renewable Energy falling quickly, the environmental and cost tide has unequivocally turned against coal and nuclear. As such, the updated version of the IRP concludes that the cheapest, cleanest, most reliable and job-creating mix is a mix that achieves 67% of Renewable Energy (RE) in 2050. That same draft also envisages no new nuclear power plants, and greater reliance on renewables to replace older coal-fired plants that would be decommissioned by 2030.
Cabinet finally considered the much-anticipated update to the IRP during its meeting on 18 September 2019, but Minister Jackson Mthembu said discussions had not yet been concluded. Mthembu attributed the extension of Cabinet-level deliberations largely to the importance of the document, while insisting on the fact that it would be concluded “soon”.
Indeed, many reports are demonstrating that, aside from the environmental and health benefits, SA has much to lose economically if it delays its energy transition further. The London-based Climate Policy Initiative (CPI) reported that SA could lose as much as $124bn between now and 2035 if it does not follow the worldwide accelerating shift towards low carbon economy.
Still, SA’s economic growth has long been associated with coal-fired power and transitioning away from this (90%) dependence on coal has proved to be very complex.
Europe has been a long-standing partner to SA in supporting the ongoing energy transition. As such, major European partners (project developers, EPC and Development Finance Institutions) have invested massively since the first Bid Window of the REIPPP. The 27 new projects signed in 2018 under the 4th bid round REIPPP represented a total of R56 billion investment of which an important part were European direct investments. European partners remain in a ‘wait and see’ position for the finalisation of the IRP and hope for a green light soon with a clear policy.
The European Union-South Africa (EU-SA) Partners for Growth Programme (‘the Programme’) aims at maximizing partnerships between the EU and SA in sectors that are key to SA.
[1] That IRP 2010-2030 version had set up the target of producing 17 800 megawatts (MW) of electricity from renewable energy sources by 2030.
