Latest news with #SubeshPillay
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.
Daily Maverick
29-04-2025
- Business
- Daily Maverick
Eskom finalising plans for old coal-fired power stations to potentially run on gas, nuclear
Eskom says it will 'decouple' the shutdown of old coal plants from its Just Energy Transition strategy, and is exploring repurposing them for gas or nuclear power. 'Clean coal', natural gas or nuclear? In the next six months, South Africans should have a clearer picture of how Eskom thinks some of its aged coal-fired power plants will operate going forward following their 'repurposing'. In 2021, as part of its Just Energy Transition (JET) strategy, Eskom committed to 'retiring nine coal-fired power stations by 2035, not investing in new coal plants nor returning to service coal plants'. This was in line with the 2019 Integrated Resources Plan, which anticipated that about 11,000 MW of coal capacity would be decommissioned by 2030. In the time since, the approach has evolved with the shutdowns being delayed and managed to balance emission reduction commitments with the need to maintain grid stability and avoid exacerbating load shedding. In recent weeks, that approach has been codified into a strategy that may see coal stations that were once due to be shut down finding a second life as nuclear power stations. Presenting its Strategic Corporate Plan for 2025-2030, its Shareholder Compact for 2025-2026 and Budget for 2025-2026 to Parliament's portfolio committee on energy and electricity, Eskom board chairperson Mteto Nyati last week explained: 'What we have also done is to decouple the shutdown of the power stations from the implementation of the JET strategy and that decoupling has meant that now we are going to be doing what we're calling 'repurposing' of those power stations way before we shut them down so that we do not negatively impact the communities that depend on those power stations.' The JET was one element of Eskom's part of South Africa's broader energy transition, where the country would, in line with international treaties, climate imperatives and the realities of the energy market, reduce the carbon intensity of South African society and its economy. South Africa has pledged to reduce emissions to between 350 and 420 million metric tons annually by 2030, down from the current 442 million tons per year under its updated Nationally Determined Contribution (NDC) submitted to the United Nations Framework Convention on Climate Change in 2021. Eskom is the largest contributor to South Africa's greenhouse gas emissions and the majority of those emissions, in turn, come from the utility's fleet of coal-fired power stations. Gas, nuclear or something else? Speaking to Daily Maverick in Parliament last week, Acting Director-General of the Ministry of Electricity and Energy Subesh Pillay said that whether the repurposing of the stations would mean they would generate electricity using natural gas or nuclear energy, or something else altogether, hadn't yet been finalised. 'The repurposing of power stations, firstly, is technology neutral. So it could be nuclear, it could be clean coal technology, it could be gas. Yes, nuclear is a big consideration because if you look at SMR (small modular reactors) as a technology, the location of the existing power plants makes it (feasible because of) grid access, you've got EIA (environmental impact authorisation) approvals, you've got a site that's designed for those kind of applications. So existing sites does lend itself to maximise the assets that you've got there, to invest in small modular reactor technology on those existing sites. That detailed work is what Eskom is currently finalising now,' said Pillay. Briefing Parliament's portfolio committee on energy and electricity a day earlier than Eskom, Nuclear Energy Corporation of South Africa CEO Loyiso Tyabashe said: 'We're looking at partnering with Eskom for fleet rollout and repurposing of their coal power stations going forward.' In response to a question from members about specific timelines, Nuclear Energy Corporation of South Africa board chairperson David Nicholls said: 'My view is that if we were to go with a (small modular reactor) design that is currently in commercial operation, for example the Chinese or the Russians, but quite likely the Chinese because the technology is PBMR (pebble bed modular reactor) style, then we could have the lead unit up and running on the Pelindaba site probably around 2031/2032. 'Prior to the startup of the actual reactor, it would be highly credible for follow-on machines to be ordered because we would know the Chinese design works and we'd have got far enough in the construction of the first one to sort out licensing, regulations, economics and the rest of it, so idealistically by the mid-2030s we could be rolling out small modular reactors on to decommissioned sites of the old coal stations,' Nicholls said. Asked about which power stations would be earmarked for such repurposing and which technologies would be used, Pillay said: 'At the programmatic level, within the next six months, we should be able to say which power stations, what technology are we pursuing and that will include across the board, gas, nuclear and clean coal.' Health impact While the details about Eskom's coal fleet's future are being worked on, the cost of delay mounts. A 2023 report from the Centre for Research on Energy and Clean Air found that if the decommissioning of the country's coal plants only begins in 2030 or beyond, it would cause a projected 15,300 excess air pollution-related deaths and economic costs of R345-billion. How this changes if the stations are repurposed is less apparent. Ntombi Maphosa, an attorney at the Centre for Environmental Rights, told Daily Maverick that she was unable to comment fully without knowing which plants were due for repurposing. 'What I can highlight, though, is that in 2024, former minister Barbara Creecy directed Eskom to submit detailed decommissioning plans for Camden, Hendrina, Arnot, Grootvlei, and Kriel. Eskom has indicated that these will be submitted in May this year. Eskom is obliged to run a participation process on the decommissioning plans, and that is one of the fora where meaningful engagement must take place with affected communities. 'We have always advocated for the timely decommissioning of ageing power plants, especially because most Eskom power stations do not operate in accordance with air pollution laws (the Minimum Emission Standards). Furthermore, the five power stations mentioned above have been granted suspensions from the emission standards, meaning they will be allowed to pollute at higher levels than allowed in the Minimum Emission Standards until they are decommission,' said Maphosa. 'Keeping the power stations operational for longer and in non-compliance with the Minimum Emission Standards will impact the health and wellbeing of affected communities and exacerbate air pollution in the Highveld (which is already extremely polluted, resulting in deaths and illness). This is taking place, despite the Deadly Air judgment, which was recently confirmed by the Supreme Court of Appeal.' 'The Deadly Air judgment holds that the right to an environment not harmful to health and wellbeing is immediately realisable. This principle should always be considered in every decision-making process and how it is going to affect people,' she said. Francesca de Gasparis, Executive Director at the South African Faith Communities' Environmental Institute echoed Maphosa's sentiments. 'Plans like those proposed by Eskom for the power plant repurposing need effective public participation and much more information in the public realm on the true costs (whole life cycle of energy system), jobs, climate and safety implications, and affordability of the electricity from these sources. A Just Energy Transition requires Eskom to start operating in a very different way from what it has done historically,' she said. 'Communities are not being given the opportunity to be meaningfully consulted. This is at risk of repeating patterns of exclusion, once again not realising the opportunity for development or to strengthen democratic processes and community participation. 'The government seems not to be following democratic processes or understanding its role in terms of service delivery or what will be necessary to tackle climate change and ensure vulnerable communities do not suffer as a result of poor decision making. Eskom is beset with problems and is increasing electricity tariffs by double digits each year, and yet their planning and updated strategy show how out of touch they are with lived reality for many South Africans.' DM
Daily Maverick
23-04-2025
- Business
- Daily Maverick
Department seeks to ‘reset the role and place of nuclear', boosts SA regulation budget
The Department of Electricity and Energy is laying the groundwork for a future with a lot more activity in South Africa's nuclear sector, according to its most recent strategic plan. Languishing in the wake of the controversial 2015 Russian nuclear deal, South Africa's nuclear sector prospects have largely remained inert. That is all set to change according to the newly formed Department of Electricity and Energy's (DEE) most recent strategy that seeks to conclusively revitalise an increasingly energised sector. Not everyone is convinced or on board, however. Presenting the strategy to Parliament's Portfolio Committee on Electricity and Energy on Wednesday, 23 April, DEE acting Director-General Subesh Pillay explained that one of the Department's strategic priorities is to 'reset the role and place of nuclear'. In November 2024, Minister of Energy and Electricity Dr Kgosientsho Ramokgopa stressed that nuclear energy would be a crucial part of South Africa's energy mix in the future and that activity was under way to re-energise the country's nuclear capacities. 'We think that we need to exploit our skills, exploit the accumulated knowledge with regard to nuclear technology over a period of time, and that's the case we're making to Cabinet,' he said at the time. The path to making that happen became a bit clearer on Wednesday when the DEE told MPs that it intended to spend at least 23% of its R20.7-billion budget over the Medium‐Term Expenditure Framework (MTEF) on 'Nuclear Energy Regulation and Management'. This amounts to roughly R1.543-billion for the 2025/2026 period, which is a 41% increase over the previous year. This would be for nuclear regulation and management, including oversight of existing facilities, nuclear safety and feasibility planning for future builds – not direct investment in nuclear power plants. Speaking to Daily Maverick in a committee meeting room on Wednesday, Pillay confirmed that this could be read as the department laying the groundwork for much more activity in the nuclear space. He qualified this by saying that a part of this large jump had to do with developments at the Nuclear Energy Corporation of South Africa (Necsa). Research generator 'There's a research reactor [ at Necsa, called Safari ] and it's reached end of life. It's got about 10 years left so they're moving to closing Safari down and simultaneously, we're now building the next iteration of research generator, and that's why you had this big jump, because National Treasury has allocated R1.2-billion for that build programme over three years.' This, he explained, formed the bulk of that jump in spending. But it was not the entire story. Pillay agreed that the department was also laying the groundwork for a future with more electricity generated by nuclear energy. 'It's essentially that because at two levels, you must build the capability to increase your nuclear stock. When you do that, you must build the capability to regulate, so there has to be a correlation between the growth of nuclear use and the ability to regulate the nuclear sector,' said the acting DG. Not everyone was pleased with the broad strokes outlined about the nuclear component in the department's strategy. DA MP Kevin Mileham asked, in reference to the outdated 2019 Integrated Resource Plan (IRP 2019), 'What analysis has been done about the scale and pace of nuclear procurements that South Africa can afford?' 'What analysis has been done on 'pace and scale' because I'm not seeing anything about that. I haven't seen feasibility studies. I haven't seen any demand profiles – nothing.' Mileham also pointed out that the strategy had assumptions that were based on some documents that don't yet exist. 'You talk about Nuclear Master Plan. You talk about Gas Master Plan. You talk about IRP 2025. Throughout this document, you're basing targets for this financial year on those three documents. But not one of those documents actually exists at this point.' 'They have not been approved by Cabinet; they have not been approved by the minister. So how are you determining a target that's based on a document that doesn't exist?' he asked, pointedly. ANC MP Fasiha Hassan also pointed out some gaps in the information. 'We need an update on the Nuclear Master Plan… We also need to see the progress on the nuclear new build – where are we with that?' Daily Maverick previously reported that at the end of 2023, Ramokgopa announced that all the 'suspensive conditions' to start procuring 2,500MW of new nuclear power 'immediately' had been met. However, in August 2024, he temporarily withdrew plans to procure new nuclear power, following a 'substantive' legal challenge by the Southern African Faith Communities' Environment Institute and Earthlife Africa Johannesburg. Feasibility report Lerato Makgae, Chief Director of Nuclear Policy at the department, provided an update and a response to members' questions. 'In terms of progress on the new nuclear build, as mentioned, we are working on the feasibility report for the nuclear build programme, which is encompassing a lot of information. Issues around the licensing, issues about skills development, looking at different technologies, whether it's large conventional plants that are being built in other countries, as well as SMRs (small modular reactors).' 'Right now, we noted that there are more than 80 designs of SMRs, which are in different stages of being commissioned. So we are monitoring that. The construction times would be in our feasibility report at the department, together with the nuclear entities and other government departments. Issues of 'pace and scale' would also be addressed in that feasibility report,' Makgae said. On the mooted Nuclear Master Plan, Makgae said the department was at an 'early phase of the development' and promised to report on it quarterly. Not everyone welcomed the news. One of the people who shed light on the opaque and allegedly corrupt Russian-South African nuclear deal pushed under the Zuma administration was Makoma Lekalakala. She is the director of Earthlife Africa JHB, an environmental justice activist anti-nuclear organisation and one of the organisations that forced Ramokgopa to pause the more recent plans for nuclear procurement. Also noting the language in the IRP 2019, committing the government to only pursuing nuclear energy 'on a scale and pace the country can afford', she asked, 'Is the country at an economic state to afford nuclear energy reactor construction?' 'We can't lock the country in any debt we cannot afford. Eskom's Medupi and Kusile costs have escalated more than threefold – the nuclear build might even be tenfold.' DM
