economic impacts of south africas energy mix · and africa* 5 7 0 rest of asia pacific 2 0 22...

Dr Tobias Bischof-NiemzChief Engineer

Economic impacts of South Africa’s energy mix

CSIR Energy Centre

Sustainable Energy for All in South AfricaNational Science and Technology Forum

Johannesburg. 16 April 2018

Jarrad G. Wright [email protected]

2

Conclusions4

RSA energy mixes and economic impacts3

Local context2

Global context1

Agenda

3

Conclusions4


Local context2

Global context1

Agenda

4

World:Significant cost reductions materialised in the last 5-8 years

535%

168% Total South Africanpower system(approx. 45 GW)

2016

125

55

70

2015

121

64

57

2014

92

52

40

20132012

98

53

100%

45

76

2011

74

36

3831

77 0

2000

44

0

151

100%

71

41

30

2010

56

39

17

2009

46

38

7

2008

34

27

7

2007 2017

20

3

2006

16

15

2

2005

13

121

2004

23

81

2003

98

1

2002

8

70

2001

9

Wind

Solar PV

Solar PV technology cost (global ave.)

Wind technology cost (global ave.)

Sources: GWEC; IRENA; IEA PVPS; CSIR analysis

Subsidies Cost competitive

Global annual new capacity [GW/yr]

5

Renewables until today mainly driven by US, Europe, China and JapanGlobally installed capacities for three major renewables wind, solar PV and CSP end of 2017

51

89

1.9

USA

Europe0.3

130

188

China

0.52.54.5

Middle Eastand Africa*

7 05

Rest of Asia Pacific02

22

Americasw/o USA/Canada

540

Wind

400

Solar PV

5.1

CSP

Total RSA power

system (45 GW)

Total World

49

03

Japan1833

0.2

India

075

Australia

Operational capacities in GW(end 2017)

178

120

2.33 0

12

Canada

South Africa has 2.1/1.5/0.3 GW

installed capacity of wind, solar PV and CSP

(end 2017)

* Still to be updated tp 2017; Sources: GWEC; IRENA; IEA PVPS; SolarPower Europe; CSIR analysis

6

Conclusions4


Local context2

Global context1

Agenda

7

Energy supply is domestic coal-dominated in South Africa but most oil and liquid fuels is importedSimplified energy-flow diagram (Sankey diagram) for South Africa in 2015 (PJ)

Power Plants2740

Heat1 344

Transformation949

Non-energy188

* Renewables include biomass/waste, wind/solar/hydro.

Sources: DoE; CSIR analysis

Electricity838

Primary Energy (PJ) Conversion (PJ) End Use (PJ)

Export2 115

E

H

Refineries840

Coal6 150

Nuclear133

Oil840

Natural Gas178

Renewables*694

Export161

Import435

Import47

Export53

Imports

Domestic

Transport761

T

TFEC: 3131 PJ

8

Energy is coal-dominated in South Africa –end-use is 25% transport, 25% electricity and 50% heating/cooling –Simplified energy-flow diagram (Sankey diagram) for South Africa in 2015 (PJ)

Power Plants2740

Heat1 344

Transformation949

Non-energy188

* Renewables include biomass/waste, wind/solar/hydro.

Sources: DoE; CSIR analysis

Electricity838

Primary Energy (PJ) Conversion (PJ) End Use (PJ)

Export2 115

E

H

Refineries840

Coal6 150

Nuclear133

Oil840

Natural Gas178

Renewables*694

Export161

Import435

Import47

Export53

Imports

Domestic

Transport761

T

TFEC: 3131 PJ

Focu

s on

this se

ctor

9

From Jan-Dec 2017, 226 TWh of net electricity were produced in SAActuals captured in wholesale market for Jan-Dec 2017 (i.e. without self-consumption of embedded plants)

Notes: “Net Sent Out“ = Total domestic generation (Sent Out) minus pumping load (not shown seperately)Sources: Eskom; Statistics South Africa for imports and exports

Annualelectricity

in TWh

Available for distribution

in RSA

Exports

15.2

System Load (domestic and export load)

234.6

Imports

8.6

Net Sent Out

226.0 219.4

10

2.02

2.963.163.183.40

0.62

0.87

3.65

1.17

0.62

0.690.87

1.19

1.51

0

1

2

3

4

5

Mar 2012 Nov 2015

2.18

Aug 2013

-83%

Aug 2014

-59%

Nov 2011

-41%

Solar PV

Wind

CSP

Notes: Assumed USD:ZAR = 14.71; For CSP Bid Window 3 and 3.5, the weighted average of base and peak tariff is indicated, assuming 50% annual capacity factor and

64%/36% base/peak tariff utilisation ratio; BW = Bid Window; Sources: Department of Energy’s publications on results of first four bidding windows

http://www.energy.gov.za/IPP/List-of-IPP-Preferred-Bidders-Window-three-04Nov2013.pdf;

http://www.energy.gov.za/IPP/Renewables_IPP_ProcurementProgram_WindowTwoAnnouncement_21May2012.pptx;

http://www.ipprenewables.co.za/gong/widget/file/download/id/279; StatsSA on CPI; CSIR analysis

Actual average tariffsin R/kWh (Apr-2016-R)

Actual tariffs: Considerable reductions in tariff for new wind, solar PV and CSP in South AfricaResults of Department of Energy’s RE IPP Procurement Programme

BW1 BW 4 (Expedited)

http://www.energy.gov.za/IPP/List-of-IPP-Preferred-Bidders-Window-three-04Nov2013.pdf

http://www.energy.gov.za/IPP/Renewables_IPP_ProcurementProgram_WindowTwoAnnouncement_21May2012.pptx

http://www.ipprenewables.co.za/gong/widget/file/download/id/279

11

In 2017, wind, solar PV & CSP supplied 3.8% of total SA system loadActuals captured in wholesale market for Jan-Dec 2017 (i.e. without self-consumption of embedded plants)

Annualelectricity

in TWh

System Load (domestic and export load)

234.6

CSP

0.7 (0.3%)

Solar PV

3.3 (1.4%)

Wind

5.0 (2.1%)

Residual Load

225.6

Notes: Wind includes Eskom’s Sere wind farm (100 MW). Sources: Eskom

12

Projects already applied for EIAs can supply 90/330 GW of while overlap with REDZ can supply 45/70 GW of wind/solar PV capacity

All EIAs1 (12 249 km2, ≈1.0% of RSA)(status early 2016)

Wind: 90 GW (≈310 TWh)

Solar PV: 329 GW (≈634 TWh)

All REDZ1 (53 472 km2, 4.4% of RSA)(phase 1)

Wind: 535 GW (≈1780 TWh)

Solar PV: 1 782 GW (≈3371 TWh)

1 After exclusion zones; EIA = Environmental Impact Assessment; REDZ = Renewable Energy Development ZonesSources: https://www.csir.co.za/sites/default/files/Documents/Wind_and_PV_Aggregation_study_final_presentation_REV1.pdf; https://www.csir.co.za/sites/default/files/Documents/Wind%20and%20Solar%20PV%20Resource%20Aggregation%20Study%20for%20South%20Africa_Final%20report.pdf

RSA domestic demand + exports (2017): 235 TWh

All EIAs in REDZ1 (6 676 km2, 0.6% of RSA)

Wind: 45 GW (≈153 TWh)

Solar PV: 73 GW (≈140 TWh)

https://www.csir.co.za/sites/default/files/Documents/Wind_and_PV_Aggregation_study_final_presentation_REV1.pdf

https://www.csir.co.za/sites/default/files/Documents/Wind and Solar PV Resource Aggregation Study for South Africa_Final report.pdf

13

Conclusions4

But... what about storage?3.4

Potential job creation opportunities3.3

CO2 emissions and water usage3.2

Electrical energy mix and costs3.1


Local context2

Global context1

Agenda

14

0

400

300

200

100

500

Electricity

[TWh/yr]

2040 20502035203020252020 2045

382

307

352

200

100

0

400

500

300

Electricity

[TWh/yr]

20402035203020252020 2045 2050

428

522

344

A need to fill the gap in the least-cost manner (subject to reliability constraints) - meeting new demand or replacing existing fleetEnergy supplied to the South African electricity system from existing plants (2016-2050)

Note: Energy from existing generators is shown representatively; All power plants considered for “existing fleet” that are either Existing in 2016, Under construction, or Procured (preferred bidder)

Sources: DoE (IRP 2016); Eskom MTSAO 2016-2021; StatsSA; World Bank; CSIR analysis

Gas (CCGT)

Peaking Hydro+PS

Nuclear

Coal

Other

Solar PV

CSP

Wind

2016 2016

Whether a high demand forecast is expected in South Africa

… or a low demand forecast –we need electricity infrastructure investment

Demand

All power plants considered for “existing fleet” that are either:1) Existing in 20162) Under construction3) Procured (preferred bidder)


15

300

400

500

0

100

200

58197 277295

Electricity

[TWh/yr]

286

2020 2025 2030 2035 2040 2045 2050

307

352382

200

500

400

0

100

300

Electricity

[TWh/yr]

83 434269

2050204520352030 204020252020

428

522

344

A need to fill the gap in the least-cost manner (subject to reliability constraints) - meeting new demand or replacing existing fleetEnergy supplied to the South African electricity system from existing plants (2016-2050)

Note: Energy from existing generators is shown representatively; All power plants considered for “existing fleet” that are either Existing in 2016, Under construction, or Procured (preferred bidder)

Sources: DoE (IRP 2016); Eskom MTSAO 2016-2021; StatsSA; World Bank; CSIR analysis

Gas (CCGT)Supply gap

Peaking CoalWind

Nuclear

Hydro+PS

Other

Solar PV

CSP

2016


2016

Whether a high demand forecast is expected in South Africa

… or a low demand forecast –we need electricity infrastructure investment

Demand


16

Conclusions4






Local context2

Global context1

Agenda

17

0.620.62

Variable(Fuel)

Fixed(Capital, O&M)

Diesel (OCGT)

3.69

Gas (OCGT)

2.89

Mid-merit Coal

1.41

Gas (CCGT)

1.41

Nuclear

1.09

Baseload Coal (PF)

1.00

Wind

2011

Solar PV

2011

Technology costs declines changes long-term planning outcomes considerably

50%90% 50% 10%Assumed capacity factor2 10%

Today’s new-build lifetime cost per energy unit1

(LCOE) in R/kWh (April-2016-Rand)

1 Lifetime cost per energy unit is only presented for brevity. Modelling inherently includes the specific cost structures of each technology i.e. capex, Fixed O&M, variable O&M, fuel costs etc.2 Changing full-load hours for new-build options drastically changes the fixed cost components per kWh (lower full-load hours higher capital costs and fixed O&M costs per kWh); Assumptions: Average efficiency for CCGT = 55%, OCGT = 35%; nuclear = 33%; IRP costs from Jan-2012 escalated to May-2016 with CPI; assumed EPC CAPEX inflated by 10% to convert EPC/LCOE into tariff; Sources: IRP 2013 Update; Doe IPP Office; StatsSA for CPI; Eskom financial reports for coal/diesel fuel cost; EE Publishers for Medupi/Kusile; Rosatom for nuclear capex; CSIR analysis

82%

As per South African IRP 2016

0 0 1 000 0 1 000400 600 600

CO2 in kg/MWh

18

Draft IRP 2016 Base Case is a mix of 1/3 coal, 1/3 nuclear, 1/3 RE

Draft IRP 2016 Base Case

450

0

550

500

100

400

350

300

250

200

150

50

434

117

105

1520

1

2030

350

203

3415

1

2016

246

200

15

Total electricity produced in TWh/yr

2050

528

72(14%)

101(19%)

148(28%)

2040

93(18%)

13

22

453633(6%)

49(9%)

366

28(5%)

5 1

Sources: DoE Draft IRP 2016; CSIR analysis

As per Draft IRP 2016

More strictcarbon limits

Coal

Solar PV

CSP

GasWind

Other storage Peaking

Biomass/-gas

Hydro+PS

Nuclear (new)

Nuclear

Coal (new)

19

Draft IRP 2016 Carbon Budget case: 40% nuclear energy share by 2050

Draft IRP 2016 Base Case Draft IRP 2016 Carbon Budget



No RE limits, reduced wind/solar PV costing, warm water demand flexibility

550

350

300

250

200

50

100

0

150

400

450

500

101(19%)

148(28%)

33(6%)

49(9%)

1

528

2050

93(18%)

3

2030

3415

136

13

225

66

145

2015


105

350

203

15

28(5%)

246

2016

72(14%)

117

434

2040

200

450

0

550

500

400

350

300

250

200

150

100

50


2050

528

72(14%)

101(19%)

148(28%)

33(6%)

49(9%)

1 3

93(18%)

28(5%)

2040

434

117

105

1520

451

66

522

2030

350

203

3415

136

13

2016

246

200

15

Coal

Coal (new)

Nuclear

Nuclear (new)

Hydro+PS

Gas

Peaking

Biomass/-gas

Other storage

Wind

CSP

Solar PV


100

50

450

400

150

200

0

250

550

300

350

500


63

23

1

14 0

166

1

2040

185(35%)

110(21%)

435

83(16%)

1

2030

106

32(6%)

2

39

103

5

200 14

246

15

2016

350

36

2050

527

69(13%)

98

44(8%)

20

Least-cost is largely based on wind and solar PV complemented by flexibility (including existing coal, new gas, hydro and CSP)

Draft IRP 2016 Base Case Least CostDraft IRP 2016 Carbon Budget



200

550

0

50

250

350

300

400

450

100

500

150

350

1

136

2050

66

45

2016

20

72(14%)

28(5%)

203

117

528

22

2030

1534

49(9%)

15148(28%)

93(18%)

1

434

2040

105

35


246

101(19%)

13

15

200

33(6%)

450

0

550

500

400

350

300

250

200

150

100

50


2050

527

69(13%)

185(35%)

32(6%)

83(16%)

1 2

110(21%)

44(8%)

2040

435

98

14

106

361

103

539

2030

350

166

014

1

63

23

2016

246

200

15

500

300

550

0

350

400

450

250

150

200

100

50


2050

529

60(11%)

33(6%)

55(10%)

13(2%)

3

257(49%)

109(21%)

2040

436

96

14

2710

176

5

86

2030

351

191

15

4

80

27

2016

246

200

15

500

350

450

400

250

550

50

200

300

150

0

100

1

2030

225

246

200

15

528

2050


101(19%)

72(14%)

36

2016

13

2040

28(5%)93(18%)

33(6%)

148(28%)

49(9%)

1 3

105

434

117

34

66

45

2015

350

203

1

15

CSP Hydro+PSOther storage

Coal (new)

Nuclear

Wind

CoalPeaking

Biomass/-gasSolar PV Gas Nuclear (new)

400

450

300

200

0

250

50

100

350

150

550

500

1

350

166

15

103

63246

83(16%)

435

106

32(6%)

44(8%)

2040

36

0


14

23

1

5

2030

200

2016

69(13%)

185(35%)

14

39110(21%)

2050

527

1 2

98



21

Least-cost deploys considerable solar PV and wind and flexibility with no new investments in coal or nuclear capacity


200

0

300

250

150

100

50

2050

149

10

268

10

2040

126

172

158

8

2030

95

33028

10

2016

50

37

2 4

34131

20

22

Total installed net capacity in GW

25

1933

36

200

50

250

100

150

0

2050

234


108

19

37

85

74

2040

173

17 2510

27

58

52

2030

98

33

2 513

25

15

2016

50

37

4 3


Plus 3 GW demand response from residential

warm water provisionSources: DoE Draft IRP 2016; CSIR analysis

100

50

250

0

200

150

300

1517

109

208

2050

25

3314

2 3

10

136


509

2030

13

42

0

2016

37

86

8214

2040

30

211

1711

17

16

12

22



CSP

Solar PV

Coal

Biomass/-gas Nuclear (new)

Hydro+PSPeaking

Coal (new)

Other storage

Gas

Nuclear

Wind

22

Demand and Supply in GW

100

80

0

20

40

60

Draft IRP 2016 Base Case: Nuclear and coal dominate the supply mix in 2050

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Sources: CSIR analysis, based on DoE‘s Draft IRP 2016

Customer demand

Exemplary Week under Draft IRP 2016 Base Case (2050)

Nuclear

Coal

GasSolar PV

Wind

Peaking

Hydro + PS

23


90

80

70

0

10

20

30

40

50

60

100

Scenario: Least Cost – Solar PV/wind dominate in 2050, curtailment and variability managed by flexible gas, DR, PS and hydro capacity


Sources: CSIR analysis

Customer demand

Exemplary Week under Least Cost (2050)

Solar PV

Wind

Nuclear

DR Coal

CSPCurtailed solar PV and wind Biomass/-gas

Gas

Hydro + PS

Peaking

24

Conservatively, Least Cost is R20-35 billion/yr cheaper than the status-quo (Base Case) and Carbon Budget by 2030

IRP 2016 Base Case

IRP 2016 Carbon Budget Least Cost


1 Only power generation (Gx) is optimised while cost of transmission (Tx), distribution (Dx) and customer services is assumed as ≈0.30 R/kWh (today‘s average cost for these items) 2 Lower value based on McKinsey study (appendix of IEP), higher value based on CSIR assumption with more jobs in the coal industry; Sources: Eskom on Tx, Dx cost; CSIR analysis; flaticon.com

R 20-35 bln/yrcheaper(≈6-9%)

Direct & supplier(‘000)

Energy Mix

in 2030

Costin 2030

Environ-mentin 2030

Jobs2

in 2030

Total system cost1 (R-billion/yr)

Average tariff (R/kWh)

CO2 emissions (Mt/yr)

Water usage (billion-litres/yr)

Demand: 343 TWh

2030

403 367384

1.12 1.17 1.07

10%

58%

1%

7% 0%4%

5% 1%10% 4%

Gas

Coal Peaking

Nuclear (new)

Nuclear Hydro+PS

Coal (new)

Other storage

Biomass/-gas

CSP

Wind Solar PV

6%

18%

1% 0%2%8%

11%4%

47%

8%

23%

1% 1%2%

5%4%

54%

25


IRP 2016 Base Case




Energy Mix

in 2040

Costin 2040

Environ-mentin 2040

Jobs2

in 2040






Demand: 428 TWh

495535

1.25 1.15

530

1.24

2040


0%10%

8%5%

24%

27%

5%

15%

1%

Biomass/-gas

Peaking

Gas

Hydro+PS

Nuclear (new)

Nuclear

Coal (new)

Coal

Solar PV

CSP

Wind

Other storage

9%

24%1%

0%8%

7%24%

22%

3%

0%

20%

40%1%

2%

6% 4%

22%

3%

26


IRP 2016 Base Case




R 60-75 bln/yrcheaper(≈10%)

Energy Mix

in 2050

Costin 2050

Environ-mentin 2050

Jobs2

in 2050






Demand: 522 TWh

2050

688 627700

1.34 1.32 1.20

5%

18%

1%0%9%

6%28%

19%

14%

0%

Solar PV

CSP

Wind

Other storage

Biomass/-gas

Peaking

Gas

Hydro + PS

Nuclear (new)

Nuclear

Coal (new)

Coal

8%

21%

0%0%16%

6%

35%

13%

0%

21%

49%

1% 2%

10%

6%11%

27

Conclusions4






Local context2

Global context1

Agenda

28

CO2 emissions trajectory is never binding and water use declines as coal fleet decommissions

CO2 emissions Water usage

2015 2020 2025 2030 2035 2040 2045 2050

300

250

200

150

100

50

0

Electricity sector CO2 emissions[Mt/yr]

2015 2020 2025 2030 2035 2040 2045 2050

100

50

150

200

250

300

0

Electricity sector Water usage[bl/yr]

Least-cost

Draft IRP 2016 (Carbon Budget)

Draft IRP 2016 (Base Case)

PPD (Moderate)

Least-cost



Peak-Plateau-Decline (PPD) is not very ambitious anymore – least-cost is easily below PPD

29

Least-cost emits 10% more CO2 than Carbon Budget but emits 20% less than the Base Case by 2030

IRP 2016 Base Case




Cleaner+10% vs CB-20% vs BC



Energy Mix

in 2030

Costin 2030

Environ-mentin 2030

Jobs2

in 2030





Demand: 343 TWh

2030

403 367384

167

176 204

216

251

196

1.12 1.17 1.07

10%

58%

1%

7% 0%4%

5% 1%10% 4%

Gas

Coal Peaking

Nuclear (new)

Nuclear Hydro+PS

Coal (new)

Other storage

Biomass/-gas

CSP

Wind Solar PV

6%

18%

1% 0%2%8%

11%4%

47%

8%

23%

1% 1%2%

5%4%

54%

30

Least-cost emits 35% less CO2 than Carbon Budget and 55% less than the Base Case by 2040

IRP 2016 Base Case




CleanerSame as CB-55% vs BC

Energy Mix

in 2040

Costin 2040

Environ-mentin 2040

Jobs2

in 2040






Demand: 428 TWh

495535

113

66

1.25 1.15

106

239

530

1.24

67

113

2040


10%

8%24%

5%

27%

1%

5%

15%

0%

Coal Nuclear

Coal (new) Nuclear (new) Gas

Hydro+PS Peaking Other storage

Biomass/-gas

CSP

Solar PVWind

0%1%

8%

24%

9%

0% 24%

3%

22%

7%

6%

2%1%

40%

3%4%

20% 22%

31

Least-cost emits 15% less CO2 than Carbon Budget and 65% less than the Base Case by 2050

IRP 2016 Base Case





Cleaner-15% vs CB-65% vs BC

Energy Mix

in 2050

Costin 2050

Environ-mentin 2050

Jobs2

in 2050






Demand: 522 TWh

2050

688 627700

18

99 86

41

187

15

1.34 1.32 1.20

6%

0% 1%

18%

5% 14%

0%9%

28%

19%

Biomass/-gas

Hydro + PSNuclear Other storagePeaking

GasCoal (new)

Coal

WindNuclear (new)

CSP

Solar PV

0%0%

6%

0%

16%35%

21%

13%8%

10%

2%1%

11%

49%

6%21%

32

Conclusions4






Local context2

Global context1

Agenda

33

Localised job creation per technology is a function of capital (build-out) as well as operations (utilisation) for each technology

Note: It seems like the McKinsey study (appendix of IEP) under-estimates direct/supply job numbers in the coal industry. Thus, CSIR have assumed more jobs in the coal industry than in the Mickinsey study.Sources: DoE IEP 2016 Annexure B: Macroeconomic parameters

8 720

26 000

6 4004 680

14 750

25 570

4 920

9 000

4 400

800

8 4505 990

Direct

Suppliers

110

130120

32

81

150

18154612

50

Nuclear (incl. Uranium mining)

CSPGas (excl. shale gas extraction)

Solar PV WindCoal (incl. coal mining)

OpexAnnual jobs per

TWh

CapexJob-years per GW

installed

34

Increasing job opportunities as more and more RE is deployed as South Africa transitions away from coal in the long-term


200

300

350

150

100

250

0

50

2050

5767

46

40

53

2040

6

216

2030

142

12 4

49

34

2016

3

85

14

223

14

75

771

Job-years[‘000]

253

21

77

50

200

0

100

350

300

250

150

281

1

3

67

259

75

325

84

20402030

1156

82

Job-years[‘000]

13

115

2050

124

21

149

94

53

77 4

2016

4

17


Note: Direct and supplier jobs only (jobs resulting from construction, operations and first level suppliers); Because of lack of data, zero jobs for biomass/-gas assumed; Sources: DoE; CSIR analysis

250

300

100

350

200

0

150

50

32

124

153 116

314

10

2030

160

14

24119

78

7

44

25

2040

61

144

295

2050

8

Job-years[‘000]

75

1

12

2016

1



Coal

Biomass/-gas Nuclear

Hydro+PS

Gas

PeakingSolar PV

CSP

Wind

35


IRP 2016 Base Case




Cleaner+10% vs CB-20% vs BC

5-10%more jobs

Because of lack of data, zero jobs for

biomass/-gas assumed (affects Decarbonised)



Energy Mix

in 2030

Costin 2030

Environ-mentin 2030

Jobs2

in 2030





Demand: 343 TWh

2030

403 367384

167

176 204

216

251

196

1.12 1.17 1.07

101-149100-14293-153

4%

1%10%1%

0%

10%4%

7%58%

5%

Wind Solar PV

CSPOther storage

Biomass/-gas

PeakingNuclear

Nuclear (new)

Hydro+PS

GasCoal (new)

Coal

0% 47%2%

8%11%

4%

6%

18%

1%

8%

23%

1%

54%

1%2%

5%4%

36


IRP 2016 Base Case




10-20%more jobs

Energy Mix

in 2040

Costin 2040

Environ-mentin 2040

Jobs2

in 2040






Demand: 428 TWh



495535

1.25 1.15

234-258185-241

530

1.24

191-216

2040


0%10%

8%5%

24%

27%

5%

15%

1%

Biomass/-gas

Peaking

Gas

Hydro+PS

Nuclear (new)

Nuclear

Coal (new)

Coal

Solar PV

CSP

Wind

Other storage

9%

24%1%

0%8%

7%24%

22%

3%

0%

20%

40%1%

2%

6% 4%

22%

3%

CleanerSame as CB-55% vs BC

113

66106

239

67

113

37


IRP 2016 Base Case





10-20%more jobs

Energy Mix

in 2050

Costin 2050

Environ-mentin 2050

Jobs2

in 2050






Demand: 522 TWh

2050



688 627700

18

99 86

41

187

15

1.34 1.32 1.20

310-325235-253252-295

5%

18%

1%0%9%

6%28%

19%

14%

0%

Solar PV

CSP

Wind

Other storage

Biomass/-gas

Peaking

Gas

Hydro + PS

Nuclear (new)

Nuclear

Coal (new)

Coal

8%

21%

0%0%16%

6%

35%

13%

0%

21%

49%

1% 2%

10%

6%11%

Cleaner-15% vs CB-65% vs BC

38

Conclusions4






Local context2

Global context1

Agenda

39

What if more realistic solar PV, wind and storage costs are realised

Conservative cost assumptions for renewables and batteries were used initially - predominantly solar PV and wind complemented by flexibility

Solar PV 10% reduction by 2030, 20% reduction by 2050 (from 0.62 R/kWh today to 0.50 R/kWh)

Wind Unchanged from today (0.62 R/kWh)

CSP 40% reduction to 2030 (from 2.02 R/kWh to 1.20 R/kWh)

Batteries Equivalent of 200 USD/kWh by 2030, 150 USD/kWh by 2040, 100 USD/kWh by 2050

If expected cost trajectories for new technologies are applied, what happens to the structure of the electrical energy supply mix?

Solar PV 70% reduction to 2040 (from 0.62 R/kWh to 0.20 R/kWh)

Wind 40% reduction to 2040 (from 0.62 R/kWh to 0.35 R/kWh)

CSP 40% reduction to 2030 (from 2.02 R/kWh to 1.20 R/kWh)

Batteries Equivalent of 200 USD/kWh by 2030, 150 USD/kWh by 2040, 100 USD/kWh by 2050

40

550

350

300

250

200

150

400

450

600

50

500

0

100

15

135

020 2

(0%)

3

25

206

245

46

10

3

170

20(4%)

3

14(3%)

958

13

88

461

2040

11


10

192(34%)

252(45%)9(2%)9(2%)8(1%)58(10%)

565

2016

69

8

198

142

2

2030

362

2050

With expected cost trajectories for solar PV, wind and batteries -renewables share grows to >85% by 2050 with gas displaced

IRP 2016 Least Cost

Expected• Wind, PV and

CSP cost• Battery costs• More DR

450

50

300

200

350

550

400

150

100

250

0

500

600

4

351

2030

65

866

257(49%)

6(1%)

436

5

2050

529

27(5%)

240

3(1%)109(21%)

27

2040

14

96

27

5


4

3

195

2016

8 13(2%)55(10%)

80

2

176

191

1012

1615

12

60(11%)

15

NuclearPeakingWind

Storage (batteries) GasHydro

Solar PV

CSP

Pumped storage

Biomass/-gas

DR

Coal

Least Cost(cheaper RE and storage)

41

Installed capacity of 110 GW solar PV, 110 GW wind & storage deployment (pumped storage and batteries)

IRP 2016 Least CostLeast Cost

(cheaper RE and storage)

Expected• Wind, PV and

CSP cost• Battery costs• More DR

0

300

150

50

350

200

250

100199

3

2040

3

1

52

233

176

2050

132

251


155

1

3

4

19

2016

50

17

85

2

2

1

37

3

2

3

2030

58

3

237

1

10

74

2

1

37272

10

Nuclear

CoalHydro

Wind

GasCSP

Peaking

Storage (batteries)

DR

Biomass/-gas

Pumped storage Solar PV

100

50

0

200

150

350

300

250

216

326

1

109

219

183

202

71

1

37

50

2016

9 1

7

232

79

109

23

216

113

2

2

4

2050

3

21

2030

12

2040

93

307

9 3362

Total installed capacity in GW

42

Expected RE and storage cost reductions means a slightly faster reduction of CO2 emissions/water use and lower emissions by 2050 Scenario: Least-cost (new outcomes)

CO2 emissions Water usage

2015 2020 2025 2030 2035 2040 2045 2050

200

0

50

100

150

250

300

Electricity sector CO2 emissions[Mt/yr]

2015 2020 2025 2030 2035 2040 2045 2050

100

150

200

250

300

50

0

Electricity sector Water usage[bl/yr]

PPD (Moderate)



Least-cost

Least-cost (cheaper RE+storage)



Least-cost

Least-cost (cheaper RE+storage)

Cheaper RE and storage means quicker RE deployment and lower CO2 emissions by 2050

43


80

90

100

70

60

50

40

0

10

20

30

Scenario: Least Cost with expected RE and storage cost trajectories


Customer demand

Exemplary Week under Least Cost (2050)

Biomass/-gas

Coal

Nuclear

WindCurtailed solar PV and wind

DR

Battery

Solar PV

Gas

Hydro + PSCSP

Peaking

Sources: CSIR analysis

44

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

SaturdayWednesday Thursday FridayMonday Tuesday Sunday

GW

Future energy system will be built around variability of solar PV & windActual scaled RSA demand & simulated 15-minute solar PV/wind power supply for week from 15-21 Aug ‘11

Excess Solar PV/Wind

Residual Load (flexible power)

Useful Wind

Useful Solar PVSources: CSIR analysis

2

1

43

1

2

3

4

Demand shaping

Power-to-Power

X-to-Power (natural gas, biogas, hydro, CSP)

Power-to-X (sector coupling into heat/transport/chemicals)

Electricity Demand

45

Conclusions4


Local context2

Global context1

Agenda

46

Conclusions

Favourable technology costs, a world-class solar/wind resource and large geographical land area meansnew-build capacity in South Africa should predominantly be solar PV/wind complemented by flexibility

In just REDZ (Phase 1) constituting 4.4% of RSA land area, 535 GW wind (1780 TWh) and 1782 GW solar PV(3371 TWh) - RSA demand in 2017 was 235 TWh

Flexibility sourced from existing coal, imported hydro, natural gas, CSP and demand side response

Energy mix transitioning to considerable RE share by 2050 can be achieved in South Africa at least-cost,with less CO2 emissions, lower water usage and an opportunity for increased job creation potential

Electricity costs at least R60-75-bln/yr cheaper than business-as-usual and carbon budget (10% cheaper)

CO2 emissions are 65% lower than business-as-usual and 15% lower than carbon budget

Water usage is 65% lower than business-as-usual and 10% lower than carbon budget

Direct and supplier job creation potential 10% more than business-as-usual and 30% more than carbon budget

Direct and supplier coal sector jobs by 2050 reduce by 30% whilst absolute job numbers grow (as the powersystem grows) from 75 000 - 80 000 to 250 000 - 325 000

The dark horse in the race (battery storage) doesn’t change outcomes in the electricity sector as much asmost think – but notable differences occur

If costs reduce as expected, increased storage deployment shifts deployment of wind/solar PV more towardssolar PV whilst displacing imported natural gas peaking capacity

“Sector coupling” using excess solar PV/wind being researched with considerable opportunities expected