IEP scenario ver 1 by gyvwpsjkko

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									Integrated Energy Planning




  1.     INTRODUCTION



 The document discusses the background and sketches proposed scenarios to be tested by the model together with relevant developments in the energy field.


  2.     BACKGROUND
       2.1. The Integrated Energy Plan (1) (IEP(1))

         2.1.1.     IEP(1) was produced in 2002 in accordance with the mandate from the Energy White Paper. The main conclusions from IEP 1 were very briefly:
         2.1.2.     Energy supply will remain reliant on coal for at least the next two decades.
         2.1.3.     Diversify energy supply.
         2.1.4.     Continue investigations into nuclear options
         2.1.5.     Promote energy efficiency.
         2.1.6.     Maximise load factors on electricity generation plant to lower levelised lifecycle costs.
         2.1.7.     Lessen reliance on imported liquid fuels by exploring oil and gas deposits.
         2.1.8.     Increase existing oil refineries’ capacity when appropriate rather than greenfields developme
         2.1.9.     Continue with existing synfuel plants and supplement with natural gas as feedstock.
         2.1.10.   New electricity generation will remain mainly coal based.
         2.1.11.   Ensure environmental considerations in energy supply, transformation and end use.
         2.1.12.   Promote access to clean and affordable energy
         2.1.13.   Introduce policy, legislation and regulation for the promotion of renewable energy and energy efficiency
         2.1.14.   Undertake integrated energy planning on an ongoing basis.
Scenarios for IEP 2




Scenarios are intended to be internally consistent story lines about possible futures. A multiple scenario approach attempts to cover a wide range of possibilities.Each scenario is
created using a number of building blocks such as population projection, economic prospects, change in efficiency, shifts between the various fuels, technology innovation and
diffusion, stronger or weaker efforts to tackle environmental problems and more effective policies.


Scenarios are to consider and be linked to SA national development goals as well as energy sector, and consider the implication to the energy sector
Demand side:

Broad implications for energy demand of each macro-scenario(e.g. expansion or shrinking of various consumption)


Development path which optimally supports national development goals and sector demand side goals and resulting policies as specified in the Energy White Paper( goals around
economic growth and increasing access to energy)
Supply mixes to optimally meet the demand for services in the various sector( best energy mix for low-income household for example )


Supply side
Link to resources base changes , technology development , International trends and pressure
Security through diversification
The following are some brought ideas around which scenarios may usefully be developed
1. Promotion of renewable
2. Promotion of DSM and energy efficiency
3. Pursuing nuclear energy sector
4. Various new technology scenarios( fuel cell, coal-bed methane
5. Internalisation of various externalities costs( issue around pollution)

Modelling of energy sector

Scenarios for the energy sector which are developed will form part of the basis of the modelling. The modelling of the scenarios has a critical role in the quantification of financial
and broader economic implication of various choices around the development of the energy sector, which feed directly into policy and strategy formulation.
The modelling work is expected to involve the following:
Consider the modelability of Scenario, for example linked to data
Assess data availability for scenarios to be modelled, identify gaps
Undertake computer modelling exercise
Translate modelling output into the implication for the energy sector


Drivers

 •       Security of Supply
 •       Government Policies
     – Diversification
     –     Poverty alleviation
     –     Job creation
     –     Energy efficiency targets
     –     Renewables targets
     –     Energisation policies
 •       International Commitments, Pressure and Co-operation
     –     CDM, Kyoto, Carbon trading, globalisation
 •       Economic Growth
 •       Availability of Resources
     –     Financial,
     –     Human
     –     Capital
     –     Energy reserves
 •       Demographics
     –     Population growth
     –     Urbanisation and migration
     –     Health hazards (HIV, TB etc.)
 •       Technological Developments
     –     Research and Development
 •       Fuel Prices
 •       Political Stability


Assumptions
Twenty year Planning period 2003-2022

4 - 6% GDP Growth - to be confirmed by Steering Committee

Process performance data and cost and commodity prices at 2003 Value
1$= 9 Rands ) Econometric Model from NT
Inflation :5,4

Population growth : 2003= 46.4 Million (estimated annual growth for 2003:1.03, 2004:0.98 and 2005:0.92).

                 The growth rate for SA population has been declining steadily between 2001 and 2005
Net Discount rate:10% before tax for the internal study to RSA (NIRP-2).




                                     BUSSINESS AS USUAL                DIVERSIFICATION                                  LOW CARBON
Supply                               This scenario is based on current The base line scenario will be modified. This This scenario will incorporate interventions aimed at
                                     realities.                        scenario looks at an optimal diversified         lowering greenhouse gases
                                                                       solution (what will be the Least cost energy mix
                                                                       after policy intervention) through a blend of
                                                                       various energy sources



                                     Without policy intervention       -Policies interventions in place


                                                                                                                      The main focus is not on least cost but rather on:
                                     least cost approach               * Renewable( 10 000 GWh by 2013 and
                                                                       Energy Efficiency( 101 PJ by 2010) target
                                                                                                                      The development of renewable energy, nuclear energy,
                                                                                                                      clean coal technology, fuel switching, energy efficiency,
                                                                                                                      hybrid cars, alternative mode of transport – electrified trains
                                     Externalities not considered      Nuclear
                                                                                                                      Incentives for using lower GHG technologies,
                                                                       with and without externalities costs           with and without externalities costs



                                     High economic growth (4-6)        High economic growth                            High economic growth
                                     Increase in demand                Increase in demand.                            Increase in demand
                                                                       Technologies                                   SA is obligated to reduce its reliance on coal
                                                                       Resources
          BUSSINESS AS USUAL      DIVERSIFICATION                                 LOW CARBON
Coal
Drivers   Security of supply      Health and safety                               Ecologically driven / international commitment
                                                                                  External and internal pressure

          Coal remains dominant   Efficient ways of burning coal are introduced   Social and environmental impacts

                                                                                  Health and safety
                                                                                  Availability of finance/subsidies
                                                                                  Emission trading
                                                                                  Cleaner development mechanism
                                                                                  Competent renewable energy market
              BUSSINESS AS USUAL                  DIVERSIFICATION                                 LOW CARBON
Electricity

Drivers       Security of supply                  Security of supply                              Ecologically driven / international commitment
                                                  Access to energy                                Social and environmental impacts
                                                  Health and safety                               Health and safety
                                                  Affordability                                   Availability of finance/subsidies
                                                  Availability of alternative resources           Emission trading
                                                  Development in technology                       Cleaner development mechanism
                                                  Electrification

              Coal remains the dominant                                                           Competent Renewable Energy market.
              source for electricity generation

              Some small hydro electricity is     Open cycle gas Turbines                         Landfill gas
              imported from Mozambique and
              Namibia
                                                  Mothballed power stations are rehabilitated     Photovoltaic solar systems

                                                  Pebble Bed Modular Reactor commercialised Wind

                                                  Combined Gas cycle                              Nuclear
                                                  land fill gas                                   Clean coal technology
                                                  wind /solar system                              Combined gas Turbine
                                                  Regional co-operation                            Fuel switching
                                                   SA continues importing energy from the
                                                  neighbouring states, gas, hydro electricity from
                                                  Mozambique, hydroelectricity from DRC
                                                  The demand for energy increases and
                                                  increase in efficiency of energy technologies
Crude oil
                   BUSSINESS AS USUAL               DIVERSIFICATION                                LOW CARBON

                   Security of supply               Security of supply                             Environmental tax
Drivers            Political stability              Volatile oil price                             Ecologically driven / international commitment
                                                    exchange rates




                   Continue importing crude, natural Fuel specification Strategy implemented (low Alternative sources to replace crude oil
                   gas                               sulphur and the phasing out of leaded petrol).
                   Sasol continue it synfuel         Rail transport more effeicient                 Hydrogen
                   processes
                                                     Bioethanol and biodiesel, LPG                  Ethanol fuel
                                                                                                    Gas
Natural gas
Drivers            ·     Security of supply              Security of supply                        Availability and access
                   ·     New exploration            ·     Increase in oil price


                   Continue importing natural gas Combined gas cycle is more sustainable as        Natural gas is able to compete with coal and crude oil
                   importing from Mozambique and more gas reserves have been discovered
                   Namibia

Renewable energy
Drivers            Security of supply               Availability of the technology                 Ecologically driven

                                                    Affordability                                  Emission trading
                                                                                                   International commitment
                                                                                                   Availability of finance


                   Renewable technologies cannot Renewable technologies is slowly forced into reliable renewable technologies
                   compete with coal on direct cost the market (Renewable Energy White Paper)
                   accounting basis.
                                                                                              Incentives for using RE technologies are introduced.
                                                                                              Cost saving and technological improvement
              BUSSINESS AS USUAL               DIVERSIFICATION                                   LOW CARBON
Demand


Residential

Drivers       security of supply               Health and safety                                 Availability of finance/ subsidies

                                                                                                 Affordability
                                                                                                 Appliance labelling is mandatory
                                                                                                 building standards

              Planned electrification of        Electrification programme continues              Solar systems and solar water heater become competitive
              household , both grid and non-grid                                                 and there is a switch from using coal to solar technologies.

              biomass, coal and paraffin      Liquid petroleum Gas and Ethanol gel partially gas stoves(fuel switching)
              remains dominant for low income displace paraffin.                             Health and Safety
              households                                                                     Environmental conscience
                                                                                             Compulsory building standards to enforce climate efficiency

                                               Solar water heater(DSM)
                                               Basa njengo Magogo programme( strategies
                                               to encourage the efficient way of burning coal)
                                               introduced for households
                                               Biomass
Industry
Drivers       Social development and           Savings on energy                                 International pressure
              economic growth
              Job creation                     CDM                                               Emission trading
                                                                                                 Environmental Tax
                                                                                                 Market pressure for industries
                                                                                                 legislation


              Energy intensive industries      Retrofitting programme in most of the energy      Energy efficiency Technologies are available and
                                               intensive industry because of the energy          affordable
                                               efficiency accord.
              Increased Demand by industry     Benchmarking of energy efficient industries.      Appliance labelling is mandatory
              Industry remain the major        Cleaner production strategy (Energy               Market pressure from environmental causes
              consumer of electricity          Efficiency).
                                               Use of gas in the steel industry                  Cost incentive to offset initial capital costs
                                               energy utilisation across organisations
                               BUSSINESS AS USUAL                  DIVERSIFICATION                                  LOW CARBON
Transport
Drivers                        Social and Economic growth          Environmental tax                                International pressure



                               The transport sector continues it   The effect of the Taxi recapitalisation, which   Good management of public transport to encourage the
                               reliance on imported crude oil,     may alter the balance between diesel and         use of public instead of private cars
                               gas and synfuel from Sasol and      petrol.
                               PetroSA.
                               Rail - electricity, diesel          The effect of the Gautrain which may           fuel switching
                               Road - petroleum products           encourage the use of public transport. This may
                               Air - kerosene, aviation fuel       reduce the demand for petrol and diesel.
                               Marine - heavy fuel oil
                                                                   efficient public Transport                       proper transport planning and urban planning
                                                                   *Switch from petrol to diesel or ethanol         Hybrid vehicles
                                                                   shift freight from rail to rail


Commercial and public sector
(Drivers)                      Social Economic growth              Saving of energy                                 Availability of technologies


                               Electricity remain dominant as a Improvement in energy efficiency appliances         Energy efficiency building standards are mandatory
                               source of energy for commercial
                               and public services
                                                                Energy efficient buildings                          Energy efficiency Technologies are affordable

								
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