IRP 2023: Tear this up, start again and do it properly

19 March 2024

The Draft Integrated Resource Plan 2023 (IRP 2023) issued in January 2024 by the Department of Mineral Resources and Energy (DMRE) for public comment is so inadequate that it makes a mockery of the public engagement process.

“It is OUTA’S submission that the current Draft IRP 2023 contains a number of  significant acknowledged errors, omissions and inadequacies and as such, it should be recalled, reworked and reissued for public comment, with adequate time provided for a meaningful consultation process, including a series of public hearings around South Africa,” says OUTA CEO Wayne Duvenage.

IRP 2023 is a key document for South Africa’s national long-term electricity planning and OUTA believes that the government has not taken this process and the need for regular updates and constant analysis seriously, which is why we have the current shambles with the country’s electricity supply.

The current plan on the table is the long-awaited update to IRP 2019, which took the DMRE about two years to produce, whereafter the DMRE gave the public until 23 February 2024 to comment. Fortunately, the DMRE extended the public comment deadline to 23 March 2024. However this is still hopelessly inadequate, as were the DMRE’s briefings to the public, along with the lack of public hearings at which the public could engage with the plan.

Despite the tight deadline, OUTA has made a submission to DMRE on IRP 2023 and believes that the corrections to the IRP 2023 will need to be so substantive that it will require another round of public engagements, once the assumption data is more accurate and transparent.

OUTA initially called on the department to extend the comment period by two months, to give the public a reasonable opportunity to consider this very technical plan. However, OUTA says in its submission that it now believes that this IRP2023 document should be reworked, using the input provided from credible critics and scenario planners, and then republished for a more meaningful public commentary and engagement process.

The IRP should be a detailed plan which takes into account detailed information, including: economic assumptions; the existing power generation fleet performance and decommissioning schedule; better defined generation technology options and costs; various possible generation scenarios; the required electricity demand; and the least-cost to society.

OUTA’s submission notes that the initially gazetted plan had acknowledged errors and changes needed, thus requiring reworking. However, these corrections and updates are not reflected in the current version. “The serious errors, omissions and changes required in input assumptions, technology costs and available capacity have resulted in erroneous conclusions and observations in the Draft IRP 2023 that are not supported by the facts,” says OUTA’s submission. It becomes an almost futile exercise to comment on such a poorly compiled IRP 2023 document.

Some of the errors and omissions noted in OUTA’s submission include:

Inadequate and out-of-date technology costs;

The use of fixed technology costs which do not take into account the likely cost reduction over the study period to 2050, especially given that international studies indicate that the cost of renewables and batteries are expected to decline;

The amount of renewable capacity projected to be installed by the private sector and individuals appears to be underestimated;

The plan includes the three Karpowership gas-to-power ships, although these are no longer on the table;

There are unrealistic constraints on new renewables;

A fixed gas fuel price was used although this is not realistic and the rand/dollar exchange rate is not taken into account;

The impact of the hydrogen economy, green hydrogen and electric vehicles is inadequately addressed;

Economic assumptions are missing or inadequate;

Construction time and phasing for technology construction is largely missing;

There is no information on delaying the decommissioning of power stations, or on the recommendations of the VGBE consortium report on Eskom;

Electricity price trajectories are missing for various scenarios;

The carbon emission constraints and minimum emission standards constraints are missing; and

There is significant misalignment with existing legislation, regulations and policy.

OUTA notes that Meridian Economics, a highly respected and professional scenario planning organisation, has published its review of the IRP 2023, which further highlights reasons as to why “The IRP 2023 is not adequate or transparent and arrives at incorrect and economically damaging conclusions”.
A copy of OUTA’s submission is here.

Issued by Wayne Duvenage, CEO, OUTA, 19 March 2024