Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso speaking at Women in Business breakfast. File Picture: Simphiwe Mbokazi / Independent Newspapers
Business Leadership South Africa's CEO, Busisiwe Mavuso, issued a critical call to action last week, highlighting the imperative need for government to revise South Africa's Integrated Resources Plan (IRP) to ensure affordable, reliable, and rapidly deployable electricity.
In her weekly CEO newsletter, Mavuso wrote that “the core document that is meant to shape the future of our energy supply is an impediment to progress rather than the catalyst it should be”.
The draft Integrated Resources Plan (IRP) which was released in January for comment but drew criticism from stakeholders as "lacking detail," especially with regards to the methods used for forecast modelling.
Mavuso said that despite narrowly avoiding a technical recession in 2023, South Africa's economy has struggled with growth rates hovering at 0.6%.
She implored the critical need for a recalibration of the IRP, South Africa's energy roadmap, and said that the plan failed to reflect market dynamics and environmental imperatives, jeopardising both economic viability and sustainability goals.
“Every government should adopt evidence-based policies and no good case has been built for the assumptions in the IRP 2023. To advance in each area of collaboration we need government to be aligned and for the most part government is fully behind our work but of course there are elements within it who directly oppose it,” she said.
One of the IRP's shortcomings, according to BLSA, lies in its departure from the least-cost principle, favouring fossil fuels over renewables.
Mavuso brought attention to the plan's “spurious” cost estimates, which seemingly inflate renewable energy prices while underestimating fossil fuel costs.
The drastic reduction in allocated renewable energy capacity also raised concerns over the plan's alignment with climate objectives.
The plan's deferred decommissioning of coal-fired power stations raises fiscal concerns, with Eskom estimating a staggering R400 billion expense for a five-year extension, another aspect overlooked in the IRP.
“We need electricity that is affordable, reliable and can come onstream quickly. Anything that goes against that doesn’t make sense and the IRP needs to be reworked to facilitate this,” said Mavuso.