Coinciding with the determination of the Minister of Mineral Resources and Energy, Gwede Mantashe, to acquire 2,500 megawatts (MW) of new nuclear generation capacity, energy regulator Nersa has rejected the argument that renewable energy along with energy storage or gas can meet all the needs of the country. .
Nersa recently published the reasons for his decision to coincide with Mantashe, which was made in August.
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The regulator maintains that the need for base load power remains and that renewable energy is too inconsistent to meet the constant needs of the industry that runs day and night throughout the year.
He argues that coal and nuclear power are the two viable options for base load power, with nuclear power being the preferred technology in light of the need to reduce carbon emissions.
However, Nersa seems determined to prevent another Medupi or Kusile, with huge budget overruns and little liability for design and construction defects.
Therefore, it conditioned the concurrence to the format of the engineering, procurement and construction (EPC) contract. This will ensure that the project management risk rests with the winning bidder, and not with the government.
A proper demand analysis should also be performed to determine the demand profile after 2030, when nuclear power will be available to the national grid.
This is especially necessary in light of the unknown impact of the 100MW license exemption that President Cyril Ramaphosa previously announced is expected to open the floodgates for self-generation, especially by industrial power users.
“This will help determine the capacity and scale at which the country would need to obtain additional power generation from various technologies, including nuclear,” says Nersa.
The Executive Director of the Minerals Council, Roger Baxter, recently stated that the members of the council are involved in projects totaling 3,900 MW of renewable energy projects worth an estimated 60 billion rand.
The ministerial determination is based on the Integrated Resource Plan (PIR) that was published in 2019 and establishes the country’s electricity needs until 2030.
The plan envisaged that no new nuclear generation capacity would be connected during that period, but taking into account the long term of execution of these projects, it envisaged the beginning of preparations for the acquisition “at a rate and scale that the country can afford” .
The Department of Mineral Resources and Energy considers the acquisition as part of these preparations.
During a public participation process earlier this year, Nersa received 304 comments from individual stakeholders. “Of the 304 individual comments from interested parties, 235 comments were opposed to Nersa agreeing with the ministerial determination, 59 were supportive and 10 were undecided,” says Nersa.
It adds that 53 organizations submitted substantive comments, of which 28 supported the determination, 24 against and one “undecided.”
Nersa says maintaining base load supply is essential to protect jobs in the industrial sector, which account for more than 22% of the South African workforce.
In 2035, when the proposed new nuclear generation capacity comes online, base load demand is expected to be about 38,500MW, according to the IRP.
As Eskom’s coal-fired power plants reach the end of their design life and are decommissioned, the capacity of 36,800 MW in 2020 will be reduced to just 12,800 MW, which will not be enough.
However, Nersa expects the supply gap foreseen in the PIR to narrow as industrial users make use of the 100MW license exemption. “Therefore, a moderate additional base load capacity of 2.5 GW proposed by the Minister will go a long way towards closing this generation gap,” he says.
The required demand analysis will indicate whether the country will have sufficient baseload capacity after 2030.
Nersa is targeting improved coal technologies and says that coal remains the second most viable option for base load generation, as
“South Africa possesses 35,053 million tons (MMst) of proven coal reserves as of 2016, ranking eighth in the world and representing around 3% of the world’s total coal reserves of 1,139,471 million tons (MMst)” .
Nersa rejects the argument that widespread wind and solar photovoltaic generation supported by flexible gas or storage technology can replace traditional base load generation with a 10-20% cost reduction, significantly lower emissions and water consumption, as well as increased labor intensity.
Renewable energy has the added benefit of shorter construction time and less complexity than nuclear or coal megaprojects.
However, the regulator argues that such a system dominated by solar photovoltaics will result in depressed demand during the day and the need to increase generation from peak plants at night.
This will require redesign of rates to ensure that only customers with built-in generation pay for expensive peak capacity.
Relying heavily on backed renewable energy will bring complexity to grid management and will also require increased investment in the grid, says Nersa.
Nersa points to the experience in the US state of Texas, where decommissioned coal-fired power plants were largely replaced by wind power.
“In February 2021, Texas faced record low temperatures, snow and ice made roads impassable, [and] The operator of the state’s power grid lost control of the power supply, leaving millions without access to electricity. ”
Nersa says that “to avoid a similar disaster, South Africa, which has conditions similar to Texas, must heed these lessons and ensure that it has a combination of technologies that can withstand any weather conditions by continuously providing power to the grid regardless of the severity of the climate ”.
“Both nuclear power and coal can do this,” he says.