Analysis of Energy Mix Scenarios for South African Power Sector, 2016

Analysis of Energy Mix Scenarios for South African Power Sector, 2016

Ratified Integrated Resource Plan puts Country's Power Supply in Excess of 16,551 MW by 2030

RELEASE DATE
08-Mar-2017
REGION
Africa
Research Code: MCB4-01-00-00-00
SKU: EG01733-AF-MR_19779

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Description

When creating an Integrated Resource Plan (IRP) for any nation, there are several ways to fill in the supply gap. It could be new builds composed entirely of gas with complementary cogeneration or coal complemented with renewable energy. Up until November 2016, the South African 2010 IRP was the only official document on power objectives. This is often cited in various ways, although it is widely known to be incorrect. As such, decision makers, research, and conferences continually make use of this outdated document. Evidence of its inaccuracy lies in the expected Growth Domestic Product growth rate expected by 2016; the IRP 2010 predicted between 3% to 6% growth in GDP. At this rate, the demand for power predicted in the document is 21% less than what South Africa currently demands according to actual data. A forecast of the power supply is done in conjunction with the demand. This requires updated information such as economic growth, industry sector, population growth, and so on. As the South African economy has seen a slowdown since 2011, the requirement for power has fallen which was not taken into consideration.
A hardcopy document may not be beneficial if it is not updated regularly. Instead, a central, interactive, and up-to-date database will be a more valuable asset to investors, academics, and other players in the private and public sectors.
This research service takes a look at the IRP 2010 and runs various high-level scenarios on combinations of power generation and the initial goal to achieve synchronisation of this generation by 2030. These combinations were chosen based on a lower power demand projection currently seen in the power forecasts rather than the entire range of suggestions. One such scenario takes a look at the power generated should the ambition of the IRP 2010 come to fruition. While the government aimed to produce 89,532 MW of power in 2030, the actual production only reaches 66,841 MW – this is 25% less than the original plan. An updated IRP is vital to understand the energy landscape, but while the public waits for the document, data modelling can be done in the meantime. This reports attempts to do that on a high level.
The base year for the study is 2016, with the forecast period being 2017-2060.
Important note: As the latest IRP for 2016 will only be signed off by the South African Cabinet in Q2/Q3 of 2017, this report does not refer to this unofficial update. Furthermore, although it is vital to consider levelised cost of energy when comparing technologies, this report does not deal with the cost side of energy planning.

Table of Contents

Key Findings

Future IPPs

Power Supply Forecast until 2060

Comparison of Scenario Supply Forecast until 2060

Levelised Cost of Electricity

Objectives of the Analysis

Scope of Research

Geographical and Technological Scope

Research Methodology

Assumptions

South Africa—Economic Analysis

South Africa—Economic Growth

South Africa—Power Sector Analysis

History of the IPP Procurement Programme

Future IPP Programmes—Coal Base Load IPP

Future IPP Programmes—Gas to Power

Future Programmes—Nuclear Build Programmes

Future IPP Programmes—Cogeneration

Future IPP Programmes—Small, Large IPP, and Solar Parks

Introduction to Managing the Scenarios

Power Supply Forecast until 2060—BAU

Forecasting the Demand in Power (MW)

Power Supply at a Glance until 2035—BAU

Power Supply Forecast until 2034—BAU

Future IPP Programmes—Gas to Power

Demand

Future IPPs

Justification for REC

Power Supply Forecast until 2060—REC

Power Supply at a Glance until 2035—REC

Notable Insights into REC

Justification for GCG

Power Supply Forecast until 2060—GCG

Power Supply at a Glance until 2035—GCG

Key Insights into GCG

Justification for NUC

Power Supply Forecast until 2060—NUC

Power Supply at a Glance until 2035—NUC

Key Insights into NUC

Power Supply Forecast until 2060—AOA

Power Supply at a Glance until 2030

How this Aligns with Other Forecasts

Power Consumption until 2015

Comparison of Scenarios

Conclusions

Key Notes on the Scenarios

Conclusion—Power Supply Scenarios

Conclusion—Modelling the Data

Legal Disclaimer

Abbreviations

List of Figures
  • 1. Segment-wise Breakup of Services Sector, South Africa, 2015
  • 2. Segment-wise Breakup of Industry Sector, South Africa, 2015
  • 3. Comparison of the Scenarios’ Notable Data Points, South Africa, 2016
List of Charts
  • 1. Forecast of Energy Supply, South Africa, 1952–2060
  • 2. Renewable Energy & Coal, South Africa, 1952–2060
  • 3. Gas and Cogeneration, South Africa, 1952–2060
  • 4. Nuclear, South Africa, 1952–2060
  • 5. All of the Above, South Africa, 1952–2060
  • 6. Quarter-on-Quarter Economic Growth, South Africa, 2012–2016
  • 7. Proposed Total Generating Capacity by Power Source, South Africa, 2030
  • 8. Project Allocation Breakdown, South Africa, 2015
  • 9. Forecast of Maximum Planned Power Supply, South Africa, 1952–2060
  • 10. Forecast of Renewable Energy Power Supply, South Africa, 1952–2060
  • 11. Results of Low, Moderate and High Power Demand Scenarios, South Africa, 2000–2040
  • 12. Forecast of Power Demand Compared to a Shortfall, South Africa, 2015–2034
  • 13. Reasons for Reduction in Power Demand, South Africa, 2015
  • 14. IRP’s Power Supply Forecasts, South Africa, 2015
  • 15. Power Supply Forecast, South Africa, 1952-2060
  • 16. Results of Low, Moderate and High Demand Scenarios, South Africa, 2000-2040
  • 17. Power Supply Forecast, South Africa, 1952–2060
  • 18. Results of Low, Moderate, and High Demand Scenarios, South Africa, 2000–2035
  • 19. Power Supply Forecast, South Africa, 1952–2060
  • 20. Results of Low, Moderate, and High Demand Scenarios, South Africa, 2000-2040
  • 21. Forecast of Maximum Planned Power Supply, South Africa, 1952–2060
  • 22. IRP 2010 Power Allocation by Power Source, South Africa, 2010
  • 23. IRP 2010 Power Allocation by Power Source, South Africa, 2010
  • 24. IRP 2013 Update Power Allocation by Power Source, South Africa, 2013
  • 25. IRP 2013 Update Power Allocation by Power Source, South Africa, 2013
  • 26. Forecast of Maximum Planned Power Supply, South Africa, 2010–2015
Related Research
When creating an Integrated Resource Plan (IRP) for any nation, there are several ways to fill in the supply gap. It could be new builds composed entirely of gas with complementary cogeneration or coal complemented with renewable energy. Up until November 2016, the South African 2010 IRP was the only official document on power objectives. This is often cited in various ways, although it is widely known to be incorrect. As such, decision makers, research, and conferences continually make use of this outdated document. Evidence of its inaccuracy lies in the expected Growth Domestic Product growth rate expected by 2016; the IRP 2010 predicted between 3% to 6% growth in GDP. At this rate, the demand for power predicted in the document is 21% less than what South Africa currently demands according to actual data. A forecast of the power supply is done in conjunction with the demand. This requires updated information such as economic growth, industry sector, population growth, and so on. As the South African economy has seen a slowdown since 2011, the requirement for power has fallen which was not taken into consideration. A hardcopy document may not be beneficial if it is not updated regularly. Instead, a central, interactive, and up-to-date database will be a more valuable asset to investors, academics, and other players in the private and public sectors. This research service takes a look at the IRP 2010 and runs various high-level scenarios on combinations of power generation and the initial goal to achieve synchronisation of this generation by 2030. These combinations were chosen based on a lower power demand projection currently seen in the power forecasts rather than the entire range of suggestions. One such scenario takes a look at the power generated should the ambition of the IRP 2010 come to fruition. While the government aimed to produce 89,532 MW of power in 2030, the actual production only reaches 66,841 MW – this is 25% less than the original plan. An upd
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Table of Contents | Executive Summary ~ || Key Findings ~ || Future IPPs ~ || Power Supply Forecast until 2060 ~ || Comparison of Scenario Supply Forecast until 2060 ~ || Levelised Cost of Electricity~ | Introduction ~ || Objectives of the Analysis~ || Scope of Research~ || Geographical and Technological Scope~ | Methodology~ || Research Methodology~ || Assumptions~ | South Africa Energy Overview~ || South Africa—Economic Analysis~ || South Africa—Economic Growth~ || South Africa—Power Sector Analysis~ || History of the IPP Procurement Programme~ || Future IPP Programmes—Coal Base Load IPP~ || Future IPP Programmes—Gas to Power~ || Future Programmes—Nuclear Build Programmes~ || Future IPP Programmes—Cogeneration~ || Future IPP Programmes—Small, Large IPP, and Solar Parks~ | Scenario 0—Business as Usual (BAU)~ || Introduction to Managing the Scenarios~ || Power Supply Forecast until 2060—BAU~ || Forecasting the Demand in Power (MW)~ || Power Supply at a Glance until 2035—BAU~ || Power Supply Forecast until 2034—BAU~ || Future IPP Programmes—Gas to Power~ || Demand~ || Future IPPs~ | Scenario 1—Renewable Energy and Coal (REC)~ || Justification for REC~ || Power Supply Forecast until 2060—REC~ || Power Supply at a Glance until 2035—REC~ || Notable Insights into REC~ | Scenario 2—Gas and Cogeneration (GCG)~ || Justification for GCG~ || Power Supply Forecast until 2060—GCG~ || Power Supply at a Glance until 2035—GCG~ || Key Insights into GCG~ | Scenario 3—Nuclear (NUC)~ || Justification for NUC~ || Power Supply Forecast until 2060—NUC~ || Power Supply at a Glance until 2035—NUC~ || Key Insights into NUC~ | Scenario 4—All of the Above (AOA)~ || Power Supply Forecast until 2060—AOA~ || Power Supply at a Glance until 2030~ || How this Aligns with Other Forecasts~ || Power Consumption until 2015~ | Scenario Comparison~ || Comparison of Scenarios~ || Conclusions~ || Key Notes on the Scenarios~ || Conclusion—Power Supply Scenarios~ || Conclusion—Modelling the Data~ || Legal Disclaimer~ | Appendix~ || Abbreviations~ | The Frost & Sullivan Story~
List of Charts and Figures 1. Segment-wise Breakup of Services Sector, South Africa, 2015~ 2. Segment-wise Breakup of Industry Sector, South Africa, 2015~ 3. Comparison of the Scenarios’ Notable Data Points, South Africa, 2016~| 1. Forecast of Energy Supply, South Africa, 1952–2060~ 2. Renewable Energy & Coal, South Africa, 1952–2060~ 3. Gas and Cogeneration, South Africa, 1952–2060~ 4. Nuclear, South Africa, 1952–2060~ 5. All of the Above, South Africa, 1952–2060~ 6. Quarter-on-Quarter Economic Growth, South Africa, 2012–2016 ~ 7. Proposed Total Generating Capacity by Power Source, South Africa, 2030~ 8. Project Allocation Breakdown, South Africa, 2015~ 9. Forecast of Maximum Planned Power Supply, South Africa, 1952–2060~ 10. Forecast of Renewable Energy Power Supply, South Africa, 1952–2060~ 11. Results of Low, Moderate and High Power Demand Scenarios, South Africa, 2000–2040~ 12. Forecast of Power Demand Compared to a Shortfall, South Africa, 2015–2034~ 13. Reasons for Reduction in Power Demand, South Africa, 2015~ 14. IRP’s Power Supply Forecasts, South Africa, 2015~ 15. Power Supply Forecast, South Africa, 1952-2060~ 16. Results of Low, Moderate and High Demand Scenarios, South Africa, 2000-2040~ 17. Power Supply Forecast, South Africa, 1952–2060~ 18. Results of Low, Moderate, and High Demand Scenarios, South Africa, 2000–2035~ 19. Power Supply Forecast, South Africa, 1952–2060~ 20. Results of Low, Moderate, and High Demand Scenarios, South Africa, 2000-2040~ 21. Forecast of Maximum Planned Power Supply, South Africa, 1952–2060~ 22. IRP 2010 Power Allocation by Power Source, South Africa, 2010~ 23. IRP 2010 Power Allocation by Power Source, South Africa, 2010~ 24. IRP 2013 Update Power Allocation by Power Source, South Africa, 2013~ 25. IRP 2013 Update Power Allocation by Power Source, South Africa, 2013~ 26. Forecast of Maximum Planned Power Supply, South Africa, 2010–2015~
Author Tilden Hellyer
Industries Energy
WIP Number MCB4-01-00-00-00
Is Prebook No