The case for integrated resource plan public hearings.
After sitting through parts of the National Energy Regulator of
South Africa’s (Nersa’s) public hearings into Eskom’s request for a
35%-a-year increase in its tariffs between 2010 and 2013, it became
plain that many of the submissions would have been far more germane to
a discussion on the country’s future energy security and generation mix
than they were to the immediate problem of determining Eskom’s revenue
requirement for the three-year period.
In fact, most of the submissions would have little, if any,
relevance for Nersa, whose decision- making is constrained by a rigid
revenue- requirement formula and guided by existing electricity
legislation and pricing policies.
That does not suggest, however, that the presentations lacked value altogether.
On the contrary, the hearings unearthed a rich vein of analysis and
insight – insight, though, that would have been better applied to a
discussion on the so-called integrated resource plan, or IRP, than to
the setting of tariffs.
For this reason, I believe, it would be worthwhile for the
Department of Energy (DoE), which has overall responsibility for the
drafting of the IRP, to consider hosting provincial hearings (similar
to those conducted by Nersa) where oral submissions could be
entertained on the plan and the IRP concept itself.
Indeed, the
DoE has already promised thorough consultation ahead of the drafting of
the second version of the IRP (due for release later this year)
following the release of what can only be described as a disappointing
IRP1 document in December last year.
In fact, Minister Dipuo Peters stressed at the time
that she had instructed her department to “intensify consultation”
during the first quarter of 2010 so that a new version could be
delivered by midyear.
Such consultation, in my view, is important, owing to the fact that
the IRP2 will outline South Africa’s generation choices over a 20-year
horizon. By contrast, the IRP1 restricted itself to a horizon ending in
2013, leaving very little space for cogeneration (some 400 MW) and/or
independent power producer and renewable capacity (about 5 000 MW).
The advantage of conducting hearings would be to elevate the
importance of discussion in the minds of the South African citizenry,
from businesspeople and Parliamentarians, to union officials and
policymakers. It would also create the platform for experts, interest
groups and individuals to take the debate beyond the ethos of central
planning and, hopefully, into the realm of out-of-the-box thinking.
Further, the fact that many of these issues were being canvassed at
the Nersa hearings shows that that there is a pent-up aspiration within
society to engage in the electricity debate...[more]