The new Integrated Resources Plan for electricity will not encourage industrial investment or economic growth and it fails to provide the energy security the country desperately needs.
One good thing about the IRP is that it does acknowledge the need for distributed generation and we predict that the business sector will take up this challenge.
We are already seeing huge numbers of solar panels on shopping centre roofs and other commercial buildings as well as on homes and we can expect this trend to gather pace.
The reason is that businesses have done their sums and found that investing in solar panels was not only viable but a good investment with great cost control and long-term savings.
This is the reality but the IRP still places artificial limits on renewable energy and favours more expensive new coal plants.
South Africa has not come to terms with the fact that the electricity industry is over centralised. We have put all our eggs into the Eskom basket and that basket has been dropped. We need to decentralise and get the municipalities back into the business of generating electricity or allowing them to buy power directly from independent power producers.
Cape Town is able to convert stage two load shedding into stage one by using 160 MW of electricity from its Steenbras pump storage scheme. Pump storage is expensive to build and it takes a long time, but some countries are already using huge batteries to do a similar job. The exciting thing is that the batteries are getting better and cheaper so that is another opportunity to decentralise and use electricity more efficiently.
Eskom’s ability to raise loans for capital projects are severely limited but a municipality like Cape Town has a much better credit rating and will have little difficulty in raising funds for sound renewable energy projects.
The other great disappointment is that the IRP does not provide for more gas power stations which are the ideal support for variable renewable energy. They can be powered up quickly and they are at least 50% cleaner than coal. In addition, they use little water and the combined cycle gas power stations has a thermal efficiency of 60% compared to 35% to 40% for the best coal-fired power stations.
Let Cape Town and other municipalities build their own gas power stations and the economy of the Western Cape and South Africa will be a lot safer and more attractive to investors.
President of the Cape Chamber