This is according to Dr Tobias Bischof-Niemz, who heads up energy at the Council for Scientific and Industrial Research (CSIR).
The Department of Energy (DoE)’s draft update to the Integrated Resource Plan 2010-2030 (IRP) would not include any new nuclear or any new coal if the annual new-build limits on renewables were lifted.
The IRP base case proposal, which sees 20 385 MW of nuclear coming online between 2037 and 2050 in the base case, and 15 000 MW of new coal between 2028 and 2041, will undergo a public participation process.
The DoE hopes this process will be concluded at the end of February 2017 and that a plan be submitted to cabinet for sign off by March.
The IRP had two scenario examples in addition to the base case, one which capped CO2 emissions while keeping the constraints on renewables, which as a result favoured nuclear energy coming online by 2026 and eliminated new coal, and another one which capped CO2 emissions, but lifted the renewables limits and as a result only saw 5.5 GW of nuclear energy coming on between 2037 and 2050.
However, Bischof-Niemz says even that 5.5 GW figure would be zero when using the latest South African tariffs for solar PV and wind.
This was because the cost assumptions used for solar PV and wind were between 55-80% more expensive than the actual tariffs achieved in the Bid Window 4 Expedited of the DoE’s independent power producer procurement programme.
Bischof-Niemz explained that the actual tariffs for new power generators in South Africa show that new solar PV and wind is 40% cheaper than new baseload coal.
The average IPP tariffs of Bid Window 4 Expedited round, quoted in April-2016-rand, were R620/MWh for wind and equally R620/MWh for solar PV. The average IPP tariff for new baseload coal, quoted in April-2016-rand, was R1030/MWh, Bischof-Niemz explained.
The new IRP states that wind would cost R805.3/MWh and the cheapest solar PV would cost R931.21/MWh in terms of Levelised Cost of Energy. The cheapest baseload coal option is assumed to cost 862.50 R/MWh. These numbers are all quoted in January-2015-rand, he said.
“Therefore, despite new solar PV and wind being 40% cheaper than new baseload coal, as proven by actual tariffs in completely comparable competitive tender processes for actual projects in South Africa, the IRP assumes wind to be only 7% cheaper than baseload coal (R805.30/MWh vs R862.50/MWh) and solar PV to be even 8% more expensive than baseload coal (R931.24/MWh vs R862.50/MWh),” said Bischof-Niemz.
“These calculations show that the cost for solar PV in the IRP is roughly 80% too high, and for wind they are 55% too high.
“From a pure least-cost technical perspective, if there were no constraints on renewables build-out rates and if the latest actual tariffs were used to cost them, then you would not require any nuclear energy nor any new coal energy whatsoever, under whatever scenario both in terms of demand and carbon limits,” he said.