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Mail & Guardian
26-05-2025
- Business
- Mail & Guardian
The skills needed for a just energy transition can't be an afterthought
Preparing the workforce for a just energy transition requires a fundamental rethink of how education and training are approached. Photo:As South Africa marks Energy Month, we will once again hear the familiar refrains: load-shedding persists, investment is needed and policy certainty remains elusive. This year's Integrated Resource Plan, with its multiple scenarios and unclear direction, has added further uncertainty — both about our energy future and how we prepare for it. Yet amid the policy and planning debates, one question gets asked too narrowly, if at all: Are we truly preparing our people — all of them — for this transition? Even asking, 'What skills do we need for a just energy transition?' might be the wrong starting point. The speed of technological change, shaped by the fourth industrial revolution and a shifting global economy, means that the skills themselves are constantly evolving. The real question we must grapple with is: 'Are our education and training systems flexible and future-ready enough to respond to this transformation?' The just energy transition is not just about new technologies or job creation in green sectors. It is a structural transformation of our economy, society and everyday life — and that means skills development must be just as broad and integrated. We need skills and training not only for those who will work directly in renewable energy, electric vehicles and green hydrogen. We need to empower the average citizen to understand what these transitions mean for their daily lives, for the energy choices they make, for how their household budgets shift, for how communities organise around new infrastructure or adapt to new risks. The just transition is not something happening to people — it must happen with them. South Africa has taken promising steps in this direction. Among other examples, the Just Energy Transition Skills for Employment Programme (JET SEP) is helping align training with demand in emerging sectors. The AWEaP Skills Development Programme is building leadership capacity among women in the energy sector. Proposed skills development zones will focus on priority areas like renewables, electric mobility and green hydrogen value chains. These initiatives matter — but they are not yet enough. Preparing the workforce for a just energy transition requires a fundamental rethink of how education and training are approached. Training programmes should respond to the actual demands of emerging industries, rather than rely on outdated content. Local context must shape learning — what works in one community may not work in another. Inclusivity is essential — women, youth, people with disabilities and historically disadvantaged groups must have equal access to opportunities. No single institution or sector can drive this change alone; collaboration between government, business, academia and civil society is essential. And, finally, planning must become more forward-looking, anticipating future skills needs instead of reacting to shortages after they arise. Across the globe, the link between youth empowerment and the energy transition is gaining traction. The EU, for example, has South Africa must follow suit. Our youth are not just future workers in green industries — they are future homeowners, policymakers, voters and innovators. If we don't equip them now with the knowledge, tools and agency to shape a just energy transition, we risk designing a future that excludes the very people who will inherit it. South Africa's Yet, we cannot stop at acknowledging the need — we must deliver on it. A whole-of-society approach means embedding just transition thinking not only into technical training for new green industries, but also into schools, universities, public discourse and local government planning. The transition cannot be something only understood by experts — it must be lived and shaped by everyone. While we speak of education, inclusion and local empowerment, our national energy planning tells a more complicated story. The recently released Integrated Resource Plan 2025, though broader in scenario design, introduces uncertainty about which path South Africa will actually follow. It misses an opportunity to connect technical energy planning with the human and educational dimensions of a just transition. Without clear explanations of how 'best-cost' options weigh long-term risks — or how central planning aligns with the surge in private-sector and off-grid investment — we risk misaligning our training efforts with the realities of the energy market. As a result, universities, technical institutions, and other training providers, are left in a reactive position, trying to prepare graduates for an energy future even the government itself seems unsure about. This disconnect is not sustainable. Against this backdrop, my recent awarding of the SARChI Chair on Just Energy Transition at the University of Pretoria — in collaboration with RWTH Aachen University in Germany — marks a timely opportunity to rethink how education supports the transition. This initiative opens a new phase in advancing interdisciplinary teaching, research and engagement that responds directly to the complexity of South Africa's energy challenges. The focus is on breaking down silos, integrating diverse fields of expertise and fostering collaboration with communities and policymakers. While this is an important step, it represents only one part of the broader, systemic effort required across the country. The skills required for a just transition are more than only learning to code or operate a new machine. They involve systems thinking, adaptive planning, social dialogue and the capacity to navigate complexity and uncertainty — at all levels of society. If we treat skills development as an afterthought, something to retrofit once policy decisions are made, we risk deepening inequality and leaving too many people behind. The transition will not be just by default. It must be built — person by person, institution by institution. Energy Month and Youth Month should not merely be for reporting on progress. They should be a national checkpoint — are we building the human capabilities needed for the energy future we claim to want? Professor Roula Inglesi-Lotz heads the Energy Economics Research Unit and is the DSI-NRF Bilateral SARChI-Chair in Just Energy Transition, University of Pretoria.
Daily Maverick
08-05-2025
- Business
- Daily Maverick
Nuclear and gas ‘forced in' SA's draft updated electricity masterplan
South Africa's draft Integrated Resource Plan 2024 (IRP) is 'deeply flawed' in both process and outcome, according to a panel of independent energy economists, climate policy specialists and engineers. A group of eminent South African technical experts have roundly criticised the draft Integrated Resource Plan 2024 (IRP) – the country's electricity blueprint for the future – as being flawed in both process and outcome, with at least one expert saying that nuclear energy and gas were 'forced in' despite there being no techno-economic rationale for their inclusion. These extra costs could be 'socialised' and filter through to taxpayers and electricity tariffs. The Electricity Regulation Act defines the Integrated Resource Plan (IRP) as 'an indicative, forward-looking plan [established by the national sphere of government to give effect to] for electricity generation, which reflects national policy on electricity planning, which plan specifies the types of energy sources and technologies from which electricity may be generated and indicates the amount of electricity that is to be generated from each of such sources or technologies.' The current draft of the IRP is being discussed at the National Economic Development and Labour Council (Nedlac) before Cabinet considers a final version later this year. Subesh Pillay, acting director-general of the Ministry of Electricity and Energy, gave the opening address at a webinar focused on policy and planning considerations for energy and electricity in South Africa in the years to 2050. He said conversations around the IRP were happening as the country was at an inflexion point from an energy perspective. Pillay said past energy debates were framed by scarcity and load-shedding, but improved generation performance now allowed 'long-term thinking' and 'evidence-based planning'. However, other attendees would later suggest that the document best exemplifying this long-term thinking – the IRP – was anything but a display of 'evidence-based planning'. Dr Grové Steyn is MD at Meridian Economics. He specialises in infrastructure regulation, policy and restructuring. He said executive policy-making was bound by the constitutional principle of legality, which essentially required a minimum level of rationality and that least-cost power-system planning mattered greatly – tariffs were likely to increase as old Eskom coal plants were retired. 'Securing a reliable supply at the lowest possible economic and environmental cost is one of the most critical challenges in supporting our long-term development. This challenge is immensely complex and requires rigorous analysis.' A credible IRP, Steyn said, was one where, in terms of process, 'outcomes must follow logically from the results of proper analysis, outcomes have to be evidence-based, it should be grounded in sound, transparent and well-documented techno-economic analysis.' The IRP should also be consistent with other policy frameworks such as South Africa's climate commitments, local air quality regulations and broader socioeconomic goals. Based on these considerations and others, he described the draft IRP as deeply flawed. Integrated Resource Plan 2024 by Ethan van Diemen on Scribd Nuclear 'forced in' 'So the IRP, as in earlier years, develops essentially a 'modelled optimised reference case'. In this case, this includes the existing committed public procurement projects and also the private sector plans that are very far advanced,' said Steyn. He noted that the optimiser's 'emerging technology mix' pointed only to wind, solar PV, gas and storage, with no new nuclear, coal or pumped storage in the least-cost case. 'The modelled scenarios using the actual optimiser in the model does not build nuclear so the IRP modellers wanted to have a nuclear scenario and I presume the policy makers – the government – wanted that investigated and the only way they could do that was essentially to take away the other generation options that [were] available to the model to build the power system to meet demand.' He said modellers disabled new gas options after 2030, in effect, forcing the model to 'build nuclear.'. 'That is how the nuclear scenario was built. So the nuclear case is not an outcome of the model's optimisation, it's a forced-in scenario.' Gaps in the data Steyn highlighted more flaws he said undermined the credibility of the IRP. 'It's astonishing that the document does not show data on the technology capacity, energy mix costs or emissions for the modelled scenarios or the actual proposed balanced plan. Technically, of course, this means that it does not qualify as an IRP in terms of the legal definition.' 'It's not clear to us how Nedlac can participate in a meaningful consultation process if this information is simply not in the document.' 'The assumptions about nuclear technology are overly optimistic… The analysis does not test compliance or alignment with other policies, whether it is our net-zero emissions objectives or our local air quality objectives, etc, no information is available on how we meet those requirements.' 'The key concern here is that the proposed balanced plan is not logically derived from the underlying analysis presented in the IRP document. The conclusions and the plan are not the result of the analysis presented in the IRP document,' Steyn said. The IRP creates an illusion of science-based planning when its recommendations do not follow the evidence, Steyn argues. 'We have an IRP that neither went through a meaningful public consultation process nor benefited from review by independent experts, an IRP that contains lots of technical descriptions of our power system modelling, but does not adequately investigate the most critical uncertainties affecting future outcomes, an IRP that presents recommendations that do not follow logically from the analysis or are not otherwise substantiated or for which the technical and cost implications are not presented and, in fact, creates an illusion that the recommendations are based on scientific and economic principles when they are clearly not.' 'The technologies that are uneconomically forced into the plan, especially gas and nuclear, will actually rely on public procurement with limited competition, where risks and costs of these investments will be socialised,' Steyn warned. 'Unfortunately, as we all know, South Africa's recent empirical experience with these types of projects provides stark warnings about the enormous risk for cost overruns, opportunities for rent-seeking and even corruption.' Lebogang Mulaisi, executive manager responsible for policy and research at the Presidential Climate Commission (PCC), questioned whether short notice for stakeholder meetings constituted 'meaningful consultation', noting no public record of how inputs changed the document had been made available to her. Policy-based evidence-making Professor Harald Winkler with the Policy Research in International Services and Manufacturing (Prism) unit in the School of Economics at the University of Cape Town (UCT) summarised the views of others and shared his thoughts about the draft plan. 'I don't think the current draft of the IRP meets the standards of a good IRP in terms of its outcome, and in terms of process.' 'The fundamental approach should be one of evidence-based policy making based on clearly stated data and assumptions,' said Winkler. Winkler, whose research includes equitable transitions away from fossil fuels and low-emission development strategies, continued, 'It's remarkably clear that this is not a least-cost plan, but even more in terms of process, the balanced plan is not logically derived from the underlying analysis. 'It's more like an exercise in policy-based evidence-making… which is the opposite of what we need, which means policy determines outcome.' 'It must be the other way around, policy must be evidence-based, plans must be based on strong evidence, and I think that was not the case.' Chris Yelland, managing director at EE Business Intelligence, said, 'The current draft IRP currently before Nedlac is deeply flawed both in terms of process and in terms of substance. In terms of collaboration, in terms of consultation and the way it's been put together, I think it's deeply lacking.' 'I take heart from one thing… We're moving from a time of prescriptive IRPs into a time of indicative IRPs because, ultimately, Eskom and government don't have the balance sheet to finance this, it relies on external finance and government and National Treasury do not have the appetite to give government guarantees, and therefore everything hinges upon the business case of the different proposals. 'It's easy to put something in an IRP like 10,000 megawatts of new nuclear power that was in IRP 2010 that never happened, and we're moving to a stage where if it does not make business sense, it will not fly. And because it will have to fly without government guarantees, and external investment will insist on a business case that makes sense for their investment… I just don't see some of the ideas put in the IRP as flying.' 'They'll be in there, but they will not happen. So, in a way, the situation is moving to a stage where it just has to make sense as opposed to being ideologically driven,' said Yelland. 'It worries me when a Minister of Energy and Electricity says long before the finalisation of the IRP that 'there will be significantly new nuclear and gas in the IRP' because it presents an ideological position as opposed to a rational position one has taken after doing a socio- and techno-economic study like the IRP should be.' DM
Daily Maverick
08-05-2025
- Business
- Daily Maverick
From recovery to resilience – acting electricity DG Pillay charts a bold vision to 2050
In an address that signalled a significant and welcome shift in tone and substance in South Africa's energy discourse, acting Director-General at the Ministry of Energy and Electricity Subesh Pillay called for structural transformation in the country's electricity and energy planning regime. Speaking under the theme, Policy and Planning Considerations for Energy and Electricity in South Africa in the Years to 2050, acting Energy and Electricity DG Subesh Pillay opened the EE Business Intelligence webinar on Wednesday, 7 May 2025 by saying the country now stood at a strategic inflection point. 'We gather not in the shadow of crisis,' he said, 'but at a rare moment of inflection – one where signs of operational recovery offer us the space to shift our gaze beyond the immediate.' He cited Eskom's latest Winter 2025 Outlook as evidence of this shift. Notably, South Africa experienced nine months of uninterrupted power supply from July 2024 to March 2025. Unplanned generation losses dropped from more than 18GW in early 2023 to less than 13GW by April 2025, and energy availability has climbed to 61%, with a trajectory toward a target of 70%. Crucially, these gains were not driven by diesel overuse, but by structural improvements, including the return to service of a number of large Eskom generator units together with public and private sector renewable energy procurements. Pillay made it clear that the time for reactive management was over. 'We now have the opportunity, responsibility and indeed the obligation, to reposition our planning focus – not simply to avoid load shedding, but to power inclusive growth, industrial expansion and climate resilience.' Beyond technical fixes – addressing structural fragmentation Tracing the roots of South Africa's systemic energy fragility, Pillay criticised the past two decades of underinvestment, misalignment between policy and execution and governance inertia. Deferred updates to the Integrated Resource Plan (IRP), a long-stalled Integrated Energy Plan (IEP) and fragmented institutional mandates left the country overexposed to breakdowns and unprepared for decentralised energy realities. Yet, the address was not solely diagnostic. Pillay acknowledged recent progress, indicating his view that the Draft IRP 2025 now integrated industrial and spatial planning more closely, and the Gas Master Plan – said to be in an advanced stage of preparation – aimed to address the looming 'gas cliff' while fostering regional integration. Still, he warned, 'Until the IEP is finalised and the various planning instruments are nested under a common strategic umbrella, the risk of fragmentation remains.' A sector redefined – unbundling, competition and market redesign Pillay also highlighted South Africa's electricity market transformation, driven by Eskom's unbundling and the operationalisation of the National Transmission Company of South Africa (NTCSA). This, along with the National Energy Regulator of South Africa's new Grid Access Rules and the Electricity Regulation Amendment Act, signals a shift toward competitive markets. 'This is a fundamentally new planning and market environment,' he said. Drawing lessons from countries like Vietnam and Chile, he called for a 'whole-system approach' integrating generation, transmission, embedded supply and storage, with robust coordination across national, municipal and regional levels. Planning with purpose – five lenses to 2050 To shape a future-ready energy system, Pillay laid out five core planning lenses: Energy security as a developmental imperative: A resilient mix of renewables, gas, clean coal, nuclear and storage – including regional projects like the Mozambique-South Africa gas pipeline. Decarbonisation without destabilisation: Emphasising carbon capture, small modular reactors (SMRs) and green hydrogen, while sequencing coal retirements alongside industrial repurposing. A fit-for-purpose distribution system: With more than R15-billion lost annually in municipal distribution inefficiencies, he called for electricity distribution industry (EDI) restructuring and readiness for rooftop solar, microgrids and bidirectional power flows. Flexibility, technology and digitalisation: Expanding smart grids, real-time digital dispatch and Eskom's Virtual Wheeling platform, while stabilising grid performance with new technologies. Planning as an industrial lever: Tying energy to new industries – green hydrogen, battery minerals and local manufacturing – while driving socioeconomic inclusion and asserting South Africa's leadership in global forums. Institutions to match ambitions However, Pillay cautioned that robust modelling meant little without institutional delivery. He outlined three foundational governance imperatives: Policy certainty and regulatory clarity: Clear rules under the ERA Act, aligned procurement tools and synchronised planning frameworks. A capable and coordinated state: Enhanced local capacity, improved alignment among Eskom, Independent Power Producers, municipalities and regulators. Institutionalising planning: Embedding scenario analysis, social inclusion and learning processes within dynamic planning functions. Energy planning as nation building Pillay closed his address by reframing energy planning as more than a technocratic duty – it was, he asserted, 'a nation-building endeavour.' He stressed that the decisions made today would either entrench inequality or catalyse opportunity; lock in fragility or build resilience. 'As we look toward 2050,' he concluded, 'may this webinar not only interrogate models and assumptions, but also challenge institutions, expand inclusion and catalyse the leadership required to deliver the energy future that South Africa and Africa deserves.' The address sets a bold new tone for what is likely to be a highly contested yet pivotal planning period for South Africa's energy sector – one that demands not just recovery, but systemic reinvention. DM Chris Yelland is managing director, EE Business Intelligence.
Winnipeg Free Press
24-04-2025
- Business
- Winnipeg Free Press
Hydro's attempted end run around the PUB
Opinion Premier Wab Kinew has promised a Hydro rate freeze for 2025, but Manitoba Hydro's application to the Public Utilities Board asks permission to plan to add at least $1.4 billion to its debt to build a fossil gas turbine plant before the public even has a chance to comment. For Manitobans concerned about climate change, planning to use more natural gas makes no sense. The Manitoba economy will also suffer, as more fossil fuel consumption means many more millions of dollars flowing out of our province, reducing our energy resilience. Hydro has tried to do an end-run on the PUB by claiming that 'procurement of equipment requires an early tendering process… suppliers will require deposits this fall…' Hydro must submit its large, long-term Integrated Resource Plan (IRP) by the end of 2025. In submitting this letter before that happens, Hydro wants to lock in the commitment to buying the turbines before intervenors can comment. The PUB has no power to stop Hydro on their end-run; it can only 'comment.' Hydro has two reasons for wanting these two new turbines — one real and one based on a deeply embedded corporate culture. Their letter says: based on Manitoba Hydro's recent analysis, new capacity resources could be required as early as 2029/30, due to sustained winter peak capacity deficits. That's Hydro's first reason, based on internal needs not verified by PUB. The second reason is that for at least 25 years, Hydro has done everything it could to avoid using wind energy at any scale. Neighbouring North Dakota, with the same wind potential, has installed 4,000 MW, 14 times Manitoba's paltry 280 MW. Without government direction, even this very low level of wind generation would not have happened. Hydro's only answer? Spend $1.36 billion for unclear and unproven needs. The recent PUB response shows that PUB thinks there is a high probability that costs will be much higher. However, PUB legislation means it cannot disallow Hydro's determination to commit funds to make a deposit for these turbines before anyone else has a say. To understand what is behind Hydro's first reason for needing new winter generation, we need to look at what winter does to our generating capacity. Manitoba's total winter generating capacity is actually frozen in ice. Whatever water levels are in the huge storage lakes at freeze-up dictates the total potential energy storage used to drive the turbines at our northern dams. As our peak winter demands grow, Hydro is rightly concerned to find ways to bolster power generation in low-level freeze-up years. When this happens now, we simply import power as needed through transmission lines to Minnesota, Wisconsin and North Dakota. In fact, we import some power almost every year in winter. Why can't this continue? Hydro doesn't say. Hydro is like the carpenter who saw every problem as a nail, and hence only needed a hammer in the toolbox. Every problem just needs them to build something, usually something big and costly. Hydro finds it hard to actually look at what other solutions are available, and what other jurisdictions do when faced with similar problems. Let's look now at their second reason, their disdain for wind energy. How can wind, an intermittent energy source, help with Hydro's stated problem? Hydro says that our big storage lakes sometimes don't have enough water to allow needed power generation over the winter. Expanded wind power can be used in low-water years to bolster storage of water by using wind energy to reduce the draw-down of summer/fall water levels. This not only increases our overall system capacity, it also can help manage extremes of lake levels that badly affect communities and fisheries. North Dakota makes 36 per cent of all its electricity from wind (2022). We get only 2.6 per cent from wind. Ironically, Manitoba provides North Dakota with back-up using our water storage resources. Does Hydro think the wind stops at the border? Expanded wind energy used strategically to increase the levels of stored energy of water can insure against the scenarios that Hydro puts forward. New wind energy is available at under 4 cents a kilowatt hour, cheaper than gas generation and of course, much more climate friendly. Best of all, it generates permanent, skilled employment and benefits to landowners and municipalities for turbine placements. Instead of putting $1.36 billion of debt on Hydro's books, the capital can come from private sector developers, who then sell their power to Hydro at a fixed price, usually for 20-25 years. Wind development is also scalable; that is, we can build it as we need it. Given world conditions, building a 150MW wind farm in Manitoba should not take more than 18 months. We already have lots of wind data to guide placement of the turbines. All that is needed is provincial direction. With U.S. President Donald Trump destroying America's renewable energy industries, Manitoba is in a prime position to secure a good price for wind turbines from outside the U.S. Or we could waste $1.36 billion on a fossil gas plant that should be declared a stranded asset and cancelled before construction even begins. Kinew needs to inform Hydro which approach makes the most sense for Manitobans. Peter Kidd is a retired engineer who worked with Hydro and Efficiency Manitoba. Tim Sale is a former minister of energy for Manitoba.
Yahoo
23-04-2025
- Business
- Yahoo
KCC staff stress need for ‘reliable' power generation, defend support of Evergy natural gas plants
Kansas Corporation Commissioners, l to r, Dwight Keen, Andrew French and Annie Kuether, listen to testimony during Evergy's three-day hearing relating to the company's plans to build two new natural gas plants. (Morgan Chilson/Kansas Reflector) TOPEKA – Kansas Corporation Commission staff on Tuesday testified about the need to expand Evergy's power generation capabilities and defended their decision to support the company's request to build two natural gas plants. Evergy and other utility companies file an Integrated Resource Plan with the KCC that details its decision-making process, expectations of capacity needs in the future and how those needs will be met. During the second day of a three-day KCC hearing, opponents questioned Evergy and KCC officials about why they believe natural gas plants are the best way to provide energy to its customers in the future. The company has announced plans to build two plants, the Viola power plant in Sumner County, expected to be online in 2029, and the McNew power plant in Reno County, in service in 2030. The plants, according to testimony, will add 710 megawatts of power each to the company's generation portfolio and have an expected life of 40 years. Generally, 1 megawatts will power 1,000 homes, so the addition of 1,420 megawatts will power about 1.4 million homes. Justin Grady, KCC deputy director of utilities, testified there are 157 new natural gas plants being contemplated or being built in the country right now. He said the need for reliable gas generation capability is significant. 'I spent quite a bit of time in my testimony in this docket on the issue of reliability for these power plants,' Grady said. 'Admittedly, if I'd had to write this testimony two years ago, that would have been much more difficult testimony to write. As you know, every major national or regional reliability organization for a couple years now has really been sounding the alarm, saying, 'Hey, we need to slow down a little bit on the energy transition.' This is not the time to be making permanent retirement decisions. Especially for winter reliability, we really need to maintain the dispatchable capacity we have. We might need to add new dispatchable capacity. So I think we need these plants.' Dispatchable generation refers to power generation plants that can ramp up or down quickly based on an area's need for power. Grady said the Southwest Power Pool, which is the regional transmission organization that ensures reliable power supplies and infrastructure, has also been expressing concerns about reliability within the system. Indeed, the organization's website highlights the challenges facing the industry. 'We are facing an increase in extreme weather events that are causing grid emergencies, tight operating conditions, and risks to human health and safety. In the past, there were only a few weeks in summer when SPP risked running out of energy,' Southwest Power Pool President Barbara Sugg said in a letter posted online. 'Now, we are issuing grid alerts throughout the summer as well as during winter. Our risk of having inadequate supply to meet demand has greatly increased, and grid emergencies are likely to last longer, cause more damage and increase risks to human health and safety.' Jim Zakoura, an attorney for the Kansas Industrial Consumers group, which represents large-volume energy users, questioned Grady about why KCC staff didn't offer options for the commissioners to consider, such as putting one plant in and waiting five years to put another plant in, that would have decreased the retail rate impact in the present plan. That has been their usual practice, Zakoura said. Grady agreed that it has been, but said the depth of the proposal for this hearing required him to work 60 to 80 hours per week for six to eight weeks to properly evaluate and then file the testimony in this docket. However, he said, some of his testimony shared views on whether or not Evergy should abandon its thermal generation plans and move in the direction of more solar, battery storage and wind. But if Evergy would have appeared before the commission to only build half of the natural gas plants and instead to double-down on solar, Grady said he would not have agreed with that plan. 'I would not have been a supporter of that, unless they showed me critical use permits in hand from local communities, willing local communities that wanted to host that solar,' Grady said. 'It's getting more and more difficult to build those kind of resources. Grady did not hesitate to point out that he disagreed with several witnesses who entered testimony about other ways Evergy could achieve its goal of creating more power generation. He referred to testimony by Michael Gorman, a consultant hired by KIC who recommended that KCC deny Evergy's petition to build two plants. Gorman's testimony pointed, among other issues, to Evergy's decision to choose a resource plan that is not the least expensive option, that customers will pay a Construction Work in Progress, referred to as a CWIP, and that there are unknowns about the new plants costs. The CWIP charge that can be added to customer bills was approved by the Kansas Legislature in 2024. It allows utility companies to bill customers for a construction project while it is being built instead of waiting until it is complete and power is being generated. Grady said that without Gorman's testimony in front of him he believed the primary objections were to the early retirement of the coal plants, which is in Evergy's plans for the next few years. 'My recollection was his primary criticism was that this plan relies on and is predicated upon the retirement of Jeffrey 2 and Jeffrey 3. As I interpret from his testimony and from your (Zakoura's) opening statement, the position generally of KIC parties in this docket, you guys generally don't want to retire those coal facilities and you don't want to plan for the retirement of those coal facilities,' Grady said. 'That's a pretty fundamental difference of opinion that we have in this case.' Zakoura questioned the cost to consumers if Evergy retires coal plants that have an existing net book value, meaning the value remaining if the asset has not been fully depreciated. Grady said that while KCC can't direct Evergy to use a Kansas securitization statute, he fully expects the company would do so, which would mitigate the costs to consumers. The securitization statute allows companies to repay debt through issuing bonds so the debt can be repaid over a longer time period. For instance, Kansas Gas Service used securitization after winter storm Uri in 2021 to help customers absorb the costs of meeting energy needs generated by that storm in smaller increments. Grady had similar objections to testimony by Citizens Utility Ratepayer Board witness Lucy Metz, an associate with Synapse Energy Economics, who was a proponent of looking for other ways to expand Evergy's power generation than through construction of natural gas plants. 'Evergy Kansas Central did not robustly analyze and test the market for alternatives to Viola and McNew — including batteries added at sites with existing interconnection rights and additional gas conversions of coal units — and therefore has not demonstrated that the CCGTs (combine cycle gas turbines) are the lowest cost way to meet its capacity and energy needs,' Metz said in her filed testimony. 'Solar and battery additions, including the Kansas Sky project, are likely lower cost than Viola and McNew, will shield ratepayers from future cost risks, and can be procured incrementally. This would allow Evergy greater flexibility to adapt to changing market conditions and supply chain disruptions.' Her testimony, Grady said, misses the mark. 'Maybe some of this isn't her fault because it was developed prior to the recent turmoil with regard to potential trade issues and tariffs, but as evidenced by literally today's announcement of solar tariffs on southeast Asia, I think there is an incredible amount of risk, uncertainty in terms of our ability to import into this country, to build significant amounts of utility-scale solar,' Grady said. 'Everybody in this room knows there is a lot of uncertainty with regard to the Clean Energy Tax Credits and the future of those, and I was real direct about that in my testimony.' Grady said he'd been a vocal supporter of solar but the uncertain environment right now makes a difference. 'I'm still supportive of solar,' he said. 'But I think we all owe it to ourselves to back up a little and realize, this is a pretty uncertain environment to be putting all of our eggs in the solar and battery basket. I disagree with the fundamental conclusions that she draws.' The KCC hearing continues Wednesday, with experts who disagree with Grady's conclusions expected to testify.
