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Integrated Resource Plan 1

Integrated Resource Plan 1. 2009. Outline of presentation. Why did we introduce the IRP? What is the relevance and focus of IRP1 in the context of the Eskom MYPD2 application? What does IRP1 seek to achieve? What about renewable energy going forward? What about the consultation process?

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Integrated Resource Plan 1

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  1. Integrated Resource Plan 1 2009

  2. Outline of presentation • Why did we introduce the IRP? • What is the relevance and focus of IRP1 in the context of the Eskom MYPD2 application? • What does IRP1 seek to achieve? • What about renewable energy going forward? • What about the consultation process? • What happens with future IRPs?

  3. Why did we introduce the IRP? • Historically there was a gap in the alignment of the Eskom capital program in relation to governmentenergy policy objectives • “Integrated Resource Plan means a resource plan established by the national sphere of government to give effect to national policy” (definition in the Electricity Regulation Act No.4 of 2006) • It is a planning process that seeks to identify the future electricity demand and the energy mix that will meet that demand • In August 2009 the regulation for new generation capacity was promulgated – instrument in the hands of the Minister to dictate what gets built and what NERSA may license • MYPD1 over the previous period (2007-9) concluded in policy vacuum – need to avoid risk of a repeat against backdrop of huge capital investment program

  4. What is the relevance and focus of IRP1? • Eskom MYPD2 application requires NERSA determination, primarily making choices about what gets built; • IRP1 gives NERSA policy framework for all investments (consequently tariff) required over next 3 years only; • IRP1 does not make determination about who builds (Eskom or Independent) but this is the prerogative of the Minister.

  5. What does IRP1 seek to achieve? • Specific policy objectives over the MYPD2: • Introduction of 10 000GWh (about 4%) of renewable energy in the mix; • Introduction of 1m solar water heaters as a specific intervention; • Introduction of an incentivised energy efficiency and demand side management scheme; • In addition, preparation (not investment decision) regarding the next base load power plant.

  6. What about renewable energy IPPs in IRP2? • Support for RE projects (outside the SWH program): • A wind project (Sere -100MW) and a Concentrating Solar Power (50MW) • – Eskom will undertake on “build and transfer” basis; • REFIT and cogeneration program of 1 100MW; • The potential positive impact of clean technologies through job creation needs to be exploited – this is not lost to the department, hence IRP2 process in 2010;

  7. What about consultation in IRP1? • We acknowledge the consultation could have been more extensive – beyond other government departments, Eskom, NERSA, System Operator • Hence only the 3 policy objectives are being pushed in IRP1 relevant to MYPD2; • Balance of energy mix over 20-year horizon will follow rigourous consultation process • Need to balance considerations: • Environmental • Financial • Supply adequacy • Policy

  8. What happens with future (IRP2)? • A stakeholder based consultation process will commence in Q1 2010; • The new generation capacity regulation (Newgen Reg) requires that NERSA must be consulted, in turn NERSA is required by law to consult the public; • Newgen Reg also provides institutional arrangements for consultation on, inter alia: • Demand forecast; • Macro-economic and other assumptions; • Modelling of scenarios by Independent System Operator (not Eskom)

  9. Cone for future capacity needs MYPD2

  10. Policy-adjusted: IRP1

  11. Explanatory notes • The technology choices are illustrativeof the manner in which • the policy objective can be met and this should not be seen to be firm • choices. • Pre-Engineering work for the next baseload is accomodated in the IRP. The next baseload power is expected to be commisioned by 2017. • Besides the indicated programmes in the previous slide, the IRP makes no commitment on any other project.

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