15 December 2017

Business Unity South Africa sounds warning over lack of consultation on the Integrated Resource Plan for South Africa

Business Unity South Africa (BUSA) has expressed grave concern over lack of consultation on the final draft of the updated Integrated Resource Plan (IRP).

Last week, the Minister of Energy, Mr David Mahlobo announced Cabinet’s approval of the updated IRP, which determines South Africa’s long-term electricity demand and details how the demand should be met in terms of generating capacity, type, timing and cost. However, this announcement seems to fly in the face of the Energy Department’s commitment to consult on the IRP.

In November last year, the Energy Department called for public comment on the base IRP. At the time, the Department, set four key milestones in regard to the development of the IRP: (1) settling the key assumptions, (2) developing a Base-Case, (3) modeling and analysing the scenarios and sensitivities, and finally (4) developing the final plan taking into account the various scenarios and policy positions. The consultation process that ensued was confined to the first and second milestones with the remaining two milestones to be developed and consulted upon at a later stage.

“Throughout the public consultation process following the publication, which included provision for written submissions and public presentations, the Department of Energy assured stakeholders that there would be a further opportunity for consultation on the final draft. This included an undertaking that there would be consultation in Nedlac. Since the initial public consultation process was concluded on 31 March 2017, Business has made numerous attempts to ascertain from the Department the timing and extent of the public consultation process on the final draft IRP to no avail,” BUSA CEO Tanya Cohen said.

BUSA is particularly concerned that an undertaking by the Department to table to IRP at Nedlac for consultation has seemingly been overlooked. The requirement to consult on the IRP in terms of the National Energy Act, is not only a legal requirement, but makes for good planning, and allows public participation and considered input to the final IRP.

Business is of the view that meaningful and evidence-based consultation on the IRP is necessary in order to ensure that the final IRP will result in the least cost and most sustainable supply of power based on the most up to date information. The most up to date actual costs of different technologies should be used as inputs to the modelling. Consideration should include projected demand; exchange rate assumptions; lead times for different technologies, global trends towards more decentralized and flexible grids and the impact of proposals on the economy, businesses large and small and the impact on employment.