Long-term electricity sector expansion planning: A unique opportunity for a least cost energy transition in South Africa

Abstract

With climate change being near unequivocally linked to anthropogenic greenhouse gas (GHG) emissions there is an ongoing move to decarbonise economies globally with the electricity sector identified as a primary focus for most countries’ strategies. This research presents a Business-as-Usual scenario and electricity sector capacity expansion plans to determine a least-cost as well as decarbonised electricity mix for South Africa. A significant finding is that South Africa has the unique opportunity to transition from an existing carbon and water intensive coal-based electricity system to a low carbon and water intense electricity system at least-cost. The approach applies a generation capacity expansion optimisation using mixed-integer linear programming (MILP) to co-optimise energy and ancillary services. The research finds that it is least cost for any new generation capacity investment to be solar photovoltaics (PV), wind and flexible supply-side or demand-side capacity with a >75% renewable energy (RE) share by 2050, replacing existing capacity as it is decommissioned and meeting new demand. By 2050, the Least-cost scenario is conservatively $ 5.1-bln/year cheaper than Business-as-Usual (≈12%) and $ 7.8-bln/year cheaper (≈20%) when applying expected cost assumptions. A Decarbonise scenario using conservative cost assumptions has a >90% RE share by 2050. It is $ 4.8-bln/year more expensive when compared to Least-Cost where a ≈60% decarbonised electricity system is possible by 2050. Business-as-Usual as well as Decarbonise scenarios have similar costs when applying conservative cost assumptions while the Decarbonise scenario becomes $ 4.8-bln/year cheaper than Business-as-Usual (≈11%) when applying expected cost assumptions. This is while being 95% decarbonised while Business-as-Usual is 20% decarbonised by 2050.