Why solar and wind generation will better serve South Africa’s energy expansion planning

1. Introduction and Background

This note summarizes a scenario-forecasting exercise for South Africa. It is extracted from a detailed technical investigation of the potential for solar and wind generation as an alternative to the proposed Inga 3 hydropower project.

Inga 3 is the first phase of Grand Inga, a cascadeof dams planned for the Democratic Republic of Congo. Planners hope Grand Inga will providesignificant electrical power to the greater centraland southern African regions.

In the original plans, Inga 3 had an expected generation of 4.8 GW, and South Africa was the biggest consumer of the power, taking more than 50% of the output and correspondingly expectedto contribute significantly to the financing ofthe project. Under the revised plans, South Africa has doubled its commitment to Inga 3, which now has nearly three times the originally planned output.

The forecasting exercise found that power from Inga 3 will be unnecessarily costly for South Africa. To identify the cheapest ways South Africa could achieve a secure, low-carbon energy future, researchers used the Gridpath1analytics platform to model energy expansion and investment options for the country up to 2035.

2. The Outcomes from the Scenario Forecasting

A combination of solar and wind generation, complemented by natural gas, is the most economical way South Africa can meet its projected energy demand.

The researchers examined 12 possible scenarios for how South Africa could meet its projected energy demand. The evidence shows that the country’s best option is to employ a combination of wind and solar photovoltaic (PV) generation, complemented by natural gas3. In 11 out of 12 scenarios, it was not economical for South Africa to incorporate power from Inga 3 in planning for projected demand. The cost savings across the twelve scenarios without Inga 3 are depicted in Figure 1.

The overall cost savings in the scenarios without Inga 3 ranged between:

• $220 million to -$28 million using the more conservative World Bank and NEPAD capital cost estimates for Inga; and
• $330 million and $35 million when working with the more realistic estimate from theCouncil for Scientific and Industrial Research(CSIR). The CSIR is South Africa’s national research council. In all the scenarios with the CSIR estimate, the inclusion of Inga 3 is more expensive than leaving it out.

  The options without Inga 3 are (chiefly) wind,solar photovoltaic (PV) and natural gas. The inclusion of Inga 3 was only economical in the highly unlikely, most optimistic scenario in which:

• Inga 3’s generation capacity stayed at 80%: None of the previous Inga projects have ever achieved this. In addition, historical evidence shows that even the best-performing hydropower plants hardly ever come close to such capacity levels4.