ENERGY SECURITY MASTER PLAN - ELECTRICITY 2007- 2025 Department Of Minerals And Energy Energy Security Master Plan - Electricity Table of Contents EXECUTIVE SUMMARY SYNOPSIS .........................................................................................................3 1. INTRODUCTION ..............................................................................................................................6 2. GOVERNMENT POLICY AND OBJECTIVES..................................................................................6 3. HISTORICAL CONTEXT..................................................................................................................7 4. GOALS OF THE ELECTRICITY MASTERPLAN .............................................................................8 5. UNCERTAINTY AND THE VALUE OF FLEXIBILITY ......................................................................8 6. PLANNING ASSUMPTIONS ............................................................................................................9 7. ANALYSIS OF CURRENT SITUATION .........................................................................................13 7.1 ECONOMIC OUTLOOK........................................................................................................................ 13 7.2 GENERATION OUTLOOK.................................................................................................................... 14 7.3 TRANSMISSION OUTLOOK................................................................................................................ 15 7.4 DISTRIBUTION OUTLOOK.................................................................................................................. 16 7.4.1 RESIDENTIAL ELECTRICITY INFRASTRUCTURE........................................................................ 16 7.4.2 NON-GRID TECHNOLOGIES.............................................................................................................. 17 7.4.3 ECONOMIC INFRASTRUCTURE....................................................................................................... 18 7.4.4 UNDER-INVESTMENT IN ECONOMIC INFRASTRUCTURE........................................................ 21 7.5 ENERGY EFFICIENCY AND DEMAND SIDE MANAGEMENT ..................................................... 21 7.5.1 BACKGROUND...................................................................................................................................... 21 7.5.2 DSM ACCELERATION ......................................................................................................................... 22 7.5.3 DSM TARGETS...................................................................................................................................... 23 7.5.4 DSM ACTIVITIES................................................................................................................................... 24 8. ELECTRICITY DEMAND FORECAST ...........................................................................................25 9. STATUTORY AND REGULATORY CONTEXT .............................................................................28 9.1 GENERATION ADEQUACY MEASURES ......................................................................................... 29 9.1.1 APPROPRIATE RESERVE MARGIN ................................................................................................. 30 9.1.2 RELIABILITY SUMMARY ..................................................................................................................... 32 9.2 TRANSMISSION ADEQUACY MEASURES ..................................................................................... 36 9.2.1 LEVEL OF SECURITY OF SUPPLY................................................................................................... 37 9.2.1.1 GENERAL N-1 CAPACITY........................................................................................................... 37 9.2.1.2 N-1-1 CAPACITY FOR MAINTENANCE.................................................................................... 37 9.2.1.3 LOAD CENTRES AND POWER CORRIDORS EXCEEDING 500MW N-1-1 CAPACITY . 38 9.2.1.4 CRITICAL TRANSMISSION NODES AND POWER CORRIDORS N-2 CAPACITY .......... 38 10. DECISION MAKING CONSIDERATIONS......................................................................................38 10.1.1 ENVIRONMENTAL IMPACT ASSESSMENTS (EIA’S) ................................................................... 38 10.1.2 SITE SELECTION AND OPTIMISATION........................................................................................... 39 10.1.3 CLIMATE CHANGE............................................................................................................................... 39 10.1.4 RENEWABLE ENERGY........................................................................................................................ 40 10.1.5 FUNDING AND RESOURCING........................................................................................................... 40 10.1.6 FORECASTING AND PHASING OF CAPITAL EXPENDITURE.................................................... 40 10.1.7 SKILLS MANAGEMENT ....................................................................................................................... 41 10.1.8 EDI RESTRUCTURING ........................................................................................................................ 41 10.1.9 RESEARCH AND TECHNOLOGY...................................................................................................... 41 10.1.10 THE 2010 FIFA WORLD CUP ..................................................................................................... 41 11.1 INTEGRATED RESOURCE PLAN...................................................................................................... 43 11.2 CAPACITY EXPANSION PROGRAMME........................................................................................... 44 Page i Department Of Minerals And Energy Energy Security Master Plan - Electricity 11.3 TOTAL SYSTEM CAPACITY AND RELIABILITY PLAN ................................................................. 45 11.4 TRANSMISSION EXPANSION............................................................................................................ 46 11.5 REDS ....................................................................................................................................................... 50 11.6 ELECTRIFICATION OF HOUSEHOLDS, SCHOOLS AND CLINICS............................................ 52 11.7 MAINTENANCE AND REFURBISHMENT OF GENERATING PLANT......................................... 54 11.8 ACCELERATED DEMAND SIDE MANAGEMENT (DSM) .............................................................. 54 INDEPENDENT POWER PRODUCERS ....................................................................................................... 55 12. IMPLEMENTATION MATRIX .........................................................................................................57 13. MASTER PLAN REVIEW ...............................................................................................................57 14. STAKEHOLDER CONSULTATION................................................................................................57 15. RECOMMENDATIONS ..................................................................................................................58 Page ii Department of Minerals and Energy Energy Security Master Plan - Electricity EXECUTIVE SUMMARY SYNOPSIS • The Master Plan is premised on achieving certain goals that have been set for the electricity sector. Due to the uncertainty over the planning horizon, some assumptions are made regarding demand projections and the economic outlook. After consideration of the Energy White Paper and the regulatory policy framework, the current electricity generation, transmission and distribution sectors are appraised, in terms of the challenges confronting these sectors. • Security of supply standards are set for generation and transmission (in terms of supply adequacy) and interventions are proposed that are necessary to achieve the respective adequacy measures, given projections about demand growth. Other interventions proposed include accelerated DSM, the acceleration of RTS, transmission expansion, universal access to electricity (for households, schools and clinics), REDS and IPPs. • The Master Plan needs to be reviewed regularly and the proposed period is at least 3 years, to ensure that it is implementable and that it stays relevant to the challenges facing the electricity sector Page 3 Department of Minerals and Energy Energy Security Master Plan - Electricity Glossary Item Definition ASGISA Accelerated and Shared Growth Initiative BEE Black Economic Empowerment BWO Black Woman Owned CCGT Combined Cycle Gas Turbine CDM Clean Development Mechanism CFBC Circulating Fluidized Bed Combustion CEE Commercial Energy Efficiency CLM Commercial Load Management CUE Cost of Unserved Energy DG Distributed Generation DSM Demand Side Management EDI Electricity Distribution Industry EIA Environmental Impact Assessment EWP Energy White Paper ESCO Energy Services Company FGD Flue Gas Desulphurisation IEP Integrated Energy Plan IPP Independent Power Producers ISEP Integrated Strategic Energy Plan LNG Liquefied Natural Gas LP Gas Liquefied Petroleum Gas MEE Mining Energy Efficiency MLM Mining Load Management MTS Main Transmission Substation