1. PRESENTATION OF THE INTEGRATED ENERGY PLAN (IEP)

2. INTEGRATED ENERGY PLAN
BACKGROUND
The development of the Integrated Energy Plan (IEP) was envisaged in the White Paper on Energy Policy of the Republic of South Africa of 1998
The purpose and objectives of the Integrated Energy Plan (IEP) are further anchored in the National Energy Act, 2008 (Act No. 34 of 2008) which also mandates the Minister of Energy to develop, review and publish the IEP.
To ensure a coherent and coordinated approach to meeting our energy needs, the IEP will ultimately incorporate detailed sector plans for electricity, gas and liquid fuels
INTEGRATED ENERGY PLAN

3. ENERGY VALUE CHAIN
PRIMARY ENERGY/ RESOURCES
RENEWABLES
Solar
Wind
Biomass
Hydro
FOSSIL FUELS
Coal
Crude Oil
Natural Gas
NUCLEAR FUELS
Uranium
Resources extraction and sourcing
CONVERSION TECHNOLOGIES
POWER GENERATION
Conventional Coal Plant
Nuclear
CCGT
OCGT
FUEL PROCESSING
Oil refineries
GTL
CTL
REGASIFICATION
SECONDARY ENERGY CARRIERS
Electricity
Heat
Refined Petroleum Products
END-USE TECHNOLOGIES
INDUSTRY
Steam boilers
Furnace
Machinery
COMMERCE
Air Conditioning
Light Bulbs
HOUSEHOLDS
Space Heaters
Refrigerators
Stoves
Geysers
AGRICULTURE
Irrigation pumps
TRANSPORT
Vehicles
Aircraft
Rail
DEMAND FOR ENERGY SERVICES
INDUSTRIAL SECTOR
Process Steam
Motive Power
COMMERCIAL SECTOR
Electronic Communication
Cooling
RESIDENTIAL SECTOR
Space Heat
Refrigeration
Cooking
Hot water
AGRICULTURAL SECTOR
Water supply
TRANSPORT SECTOR
Person kms
The IEP considers all different energy carriers, all technology options and all key national policy imperatives and proposes an energy mix and policy recommendations which ensures that the energy sector can help achieve these in the most optimal manner.

4. STAKEHOLDER ENGAGEMENT – WHAT WE TEST
Agreement of the Purpose of the IEP
Agreement with stakeholders on the minimum content of the IEP
Agreement of the requisite quantitative baselines and assumptions
Assessment of the gaps between expected content and existing content and data
Agreement on the scenarios/pathways to be tested and the associated timelines
Integration of various sector plans (for electricity, gas, liquid fuels …)
Develop Draft IEP for consultation
After the Public Participation process, adoption of the IEP

5. INTEGRATED ENERGY PLAN
PROBLEM STATEMENT
Energy is the life blood of the economy which impacts on all sectors as well as individual livelihoods. Integrated energy planning is required to ensure that future energy service needs can be met in the most cost effective, efficient and socially beneficial manner, also considering environmental impacts.
A lack of coordinated and integrated national planning for the energy sector has led to underinvestment in much needed energy infrastructure.
There is currently inadequate supply in both the electricity and liquid fuel industries due to a lack of timely investments in new capacity.
Electricity generation is constrained due to insufficient capacity and inadequate availability of existing infrastructure.
There is a high dependence on import of liquid fuels as the current production capacity does not meet national and export demand. No investments have been made in new capacity since the start of the new democracy.
Planning at individual organisation level is commercially driven and therefore investments which are required in order to ensure that the policy objectives of the country have been left under invested.
The IEP aims to guide future energy infrastructure investments, identify and recommend policy development to shape the future energy landscape of the country.
INTEGRATED ENERGY PLAN

6. IEP 8 KEY OBJECTIVES Environmental Sustainability Economic Development
Ensure Security
of Supply
Minimise
Cost of Energy
Promote Energy Access
Economic Development
Social Development
IEP
Promote Job Creation and Localisation
Promote
Energy Efficiency
Environmental Sustainability
- Sustainable Energy Planning takes a holistic approach to the problem of planning for future energy needs. It entails ensuring that social development, environmental sustainability and economic growth are all considered in a balance manner
- The key policy questions described in the previous slides have informed the 8 key objectives of the Integrated Energy Plan
Diversify
Supply Sources
Minimise Environmental Impacts
Minimise Water Consumption
INTEGRATED ENERGY PLAN

7. IEP AND OTHER SECTOR PLANS
The IEP takes into consideration existing policies
Informs development of future energy sector roadmaps
Provides feedback to development & review of external policies
Solar Energy
Technology
Road Map
Transmission
Development
Plan
Distribution
Infrastructure
Plan
Integrated
Resource
Plan (IRP)
Biofuels
Strategy
Gas
Roadmap (GUMP)
Renewable Energy
Roadmap
Coal
Roadmap
Liquid Fuels
Roadmap
Electricity
Roadmap
Diversity of Supply
Security of Supply
Energy Efficiency Strategy
Carbon Tax Policy
Universal Energy Access Strategy
Beneficiation Strategy
National Climate Change Policy
Transport Plan
CLIMATE
CHANGE
SUPPLY
DEMAND
IEP 2015
THE INTEGRATED
ENERGY PLAN (IEP)
2050

8. KEY POLICY ISSUES ECONOMIC GROWTH AND DEVELOPMENT
National Development Plan
Defines alternatives that should be considered for ensuring security of liquid fuel supply is met
Alternative sources for electricity generation
New Growth Path
Sets aspirational targets for employment, economic growth and green economy
National Treasury
Economic Growth Projections
CLIMATE CHANGE AND EMISSIONS REDUCTION
Proposed Carbon Tax Policy
Proposes a carbon tax for energy supply and energy end-use amongst other sectors
National Climate Change Response White Paper
“Peak, Plateau, Decline” emission reduction targets have significant implications for the energy sector
Air Quality Standards
Air emission limits
Water Quality
INDUSTRIALISATION
National Industrial Policy Framework
Articulates South Africa's overarching approach to industrial development, which includes amongst others: movement toward knowledge economy; promotion of more labour-absorbing and broad-based industrialisation path
Beneficiation Strategy
Implementation of strategy will affect demand profile of industrial sector
ENERGY DEMAND MANAGEMENT
Transport Plan
Modal shifts from passenger vehicles to mass transit, from road to rail, amongst others have implications on future energy requirements transport from the sector
Energy Efficiency Strategy
Sets targets for energy efficiency improvements for different economic sectors
Overarching policies
IEP needs to be developed within the framework of overarching policies
Needs to be able to explore alternatives defined in those policies
Needs to quantify the extent to which aspiration in overarching policies are and can be met by the energy sector
Unidirectional Impact policies
Policies are at peer level but their promulgation has a unidirectional impact, energy sector has to comply and IEP needs to factor this impact in planning
Bidirectional Impact policies
IEP needs to consider targets and constraints defined in these policies
IEP needs to assess and evaluate impact of such constraints
IEP needs to provide feedback on possible review of such targets and constraints depending on overall cost-benefit within the energy sector and to economy at large
INTEGRATED ENERGY PLAN

9. ENERGY PLANNING PROCESS
INTEGRATED ENERGY PLAN

10. MACROECONOMIC ASSUMPTIONS
INTEGRATED ENERGY PLAN

11. ECONOMIC GROWTH PROJECTIONS
Source: National Treasury – 2014 Budget
INTEGRATED ENERGY PLAN

12. INTEGRATED ENERGY PLAN

13. Electricity Technology Capital Costs
INTEGRATED ENERGY PLAN

14. DESCRIPTION OF SCENARIOS
INTEGRATED ENERGY PLAN

15. MODELED SCENARIOS Carbon Tax
INDICATORS
BASE CASE
RESOURCE CONSTRAINED
ENVIRONMENTAL AWARENESS
GREEN SHOOTS
Technology Constraints
9.6 GW New Nuclear Build
GDP
Treasury moderate GDP growth
National Development High GDP Growth
DEMAND-SIDE INTERVENTIONS
DSM
1 million SWH
5 million SWH
10 million SWH
Energy efficiency
Business As Usual
High Energy Efficiency
VEHICLE EFFICIENCY (new vehicle improvement per annum)
Cars and SUVs
1.1%
2.50%
Trucks and buses
0.8%
1.00%
Electric vehicle penetration
20% annual rate
40% annual rate
Prices of Energy Commodities
Moderate
High
CLIMATE CHANGE
CO2 emissions limits
Upper bound “Peak-Plateau-Decline” (PPD) emission limit trajectory from the National Climate Change Response White Paper
PPD  lower limit
PPD upper limit
CO2 externality costs
R48-R120/t ( )
R120/t onwards
R270/t
R48-R120/t ( )
Carbon Tax
Embedded in the externality cost of Carbon
INTEGRATED ENERGY PLAN

16. MODELED SCENARIOS INDICATORS BASE CASE BIG SWH NUCLEAR RELAXED
NO SHALE GAS
Technology Constraints
9.6 GW New Nuclear Build enforced
None
GDP
Treasury moderate GDP growth
DEMAND SIDE INTERVENTIONS
DSM
1m SWH
10 million SWH
1 million SWH
Energy efficiency
Business As Usual
VEHICLE EFFICIENCY (new vehicle improvement per annum)
Cars and SUVs
1.1%
Trucks and buses
0.8%
Electric vehicle penetration
20%
Prices of Energy Commodities
Moderate
Unavailable shale gas
CLIMATE CHANGE
CO2 emissions limits
PPD upper limit
CO2 externality costs
R48-R120/t between 2015 and 2019
R120/t onwards
Carbon Tax
Embedded in the externality cost of carbon
INTEGRATED ENERGY PLAN

17. CONCLUSION AND RECOMMENDATIONS
INTEGRATED ENERGY PLAN

18. RESEARCH AND DEVELOPMENT
Explore solar augmentation for existing coal-fired power plants
Investigate possibilities for mass production of PV panels locally
Explore innovations that can aid in the reduction of CSP costs
Investigate the role of solar in providing heating needs of industry (starting with light industry)
Explore solar hybridization technologies (solar/gas, solar/diesel)
INTEGRATED ENERGY PLAN

19. INTEGRATED ENERGY PLAN
Source: DoE Analysis
INTEGRATED ENERGY PLAN

20. INTEGRATED ENERGY PLAN
Source: DoE Analysis

21. INTEGRATED ENERGY PLAN
Source: Doe Analysis

22. INTEGRATED ENERGY PLAN
Source: DoE Analysis

23. INTEGRATED ENERGY PLAN
THANK YOU
INTEGRATED ENERGY PLAN

24. INTEGRATED ENERGY PLAN
ANNEXURE – MODEL OUTPUTS
INTEGRATED ENERGY PLAN

25. PROJECTED DEMAND PER SCENARIO
INTEGRATED ENERGY PLAN

26. INTEGRATED ENERGY PLAN
FINAL CONSUMPTION
Final Consumption (PJ)
Within the industrial sector the total share of final consumption grows in all scenarios except for the Green Shoots due to reduction in the manufacturing sector’s share of GDP post 2030.  In the Resource Constrained and Environmental Awareness the percentage share (41% and 40% respectively) is similar due to the assumptions with regards energy efficiency improvements.  In comparison the manufacturing sector increases to 51% of the final consumption given that energy efficiency improvements are not made over the planning period
For the mining sector the share of final consumption decreases in all scenarios except for the Base Case scenario.  This is due to the fact that in the Green Shoots, Resource Constrained and Environmental Awareness scenarios energy efficiency improvements are implemented whereas in the Base Case scenarios energy efficiency improvements are not implemented.  In addition the decrease in the mining sector contribution to final consumption also decreases due to the reduction in mining’s share of GDP post 2030. 
The share of final consumption remains relatively constant across the three scenarios with the exception of the Base Case scenario in the agricultural sector.  This is due to the fact that in the Green Shoots, Resource Constrained and Environmental Awareness scenarios energy efficiency improvements are balanced out by rebound effects whereas in the Base Case scenarios energy efficiency improvements are not implemented.  The decline in the Base Case is due to lack of production activities in the sector.
Despite energy efficiency improvements, the share of final energy consumption increases in all scenarios for the commercial sector. This is mainly due to the structural shifts in the economy and climate change. In the recent years, the economy has been shifting towards a service sector and as economy grows this trend is likely to continue and hence the energy efficiency benefits may take some time before they are realised due to the increase use of technologies such as laptops, printers, etc. The other contributing factor to the energy consumption in the sector is the current weather conditions, which are likely to continue. It has been noted that the largest effects of energy consumption are mainly as a result of the cooling degree days in winter and heating degree days in summer.
Within the residential sector the share of final consumption decreases across all scenarios albeit at different rates.   With regards to the Base Case the decrease in residential sector’s share is largely due to the growth in the manufacturing sector which increases up to 51% due to the lack of energy efficiency improvements implemented as well as the implementation of Building Regulations post 2011.  Within the Green Shoots scenario the larger decrease in comparison to the Resource Constrained and Environmental Awareness scenarios, despite similar assumptions on energy efficiency is due to a more aggressive penetration of Solar Water Heaters (10 million by 2030).
INTEGRATED ENERGY PLAN

27. FINAL CONSUMPTION (PER CARRIER)
Final Consumption (PJ)
The demand for petroleum products increases the most significantly between 2015 and 2050 as this is primarily used within the transport sector. Demand for other petroleum products, is less significant, demand for LPG is expected to have a steady increase in the residential sector and although fairly minor ranks as the third largest increase between 2010 and Diesel consumption continues to increase in the mining sub-sector but only marginally when compared to electricity and natural gas. The use of illuminating paraffin is expected to decrease in future and to be negligible by 2025.
Demand for natural gas, although the least significant in terms of percentage share, shows the next most significant increase after that for petroleum products. Natural gas is primarily used within the industrial sector and the projected growth of the sector is a factor in this increase. Demand for electricity continues to rise as more houses become electrified and as the tertiary sector, largely comprised of commercial and public buildings continues to expand.
. Demand for coal continues to grow in the industrial sector, while in the residential sector it is expected to start declining as a result of ongoing electrification of previously non-electrified households and improvements in household income.
Source: Model Output
INTEGRATED ENERGY PLAN

28. FINAL CONSUMPTION - BIG SWH VERSUS BASE CASE
INTEGRATED ENERGY PLAN
Source: Doe Analysis

29. ENERGY MIX (SUPPLY-SIDE OPTIONS) FOR EACH SCENARIO
INTEGRATED ENERGY PLAN

30. ELECTRICITY GENERATION
INTEGRATED ENERGY PLAN

31. INTEGRATED ENERGY PLAN

32. INTEGRATED ENERGY PLAN
Source: Doe Analysis

33. INTEGRATED ENERGY PLAN
Source: Doe Analysis

34. ELECTRICITY PRICE PATH
INTEGRATED ENERGY PLAN

35. INTEGRATED ENERGY PLAN

36. INTEGRATED ENERGY PLAN
LIQUID FUEL SUPPLY
INTEGRATED ENERGY PLAN

37. INTEGRATED ENERGY PLAN

38. INTEGRATED ENERGY PLAN

39. INTEGRATED ENERGY PLAN

40. ENVIRONMENTAL CONSIDERATIONS
INTEGRATED ENERGY PLAN

41. INTEGRATED ENERGY PLAN

42. INTEGRATED ENERGY PLAN

43. INTEGRATED ENERGY PLAN

44. INTEGRATED ENERGY PLAN

45. INTEGRATED ENERGY PLAN