Can renewable energy, with LNG for flexibility, replace nuclear energy as a base-load option in South Africa?

Abstract

As a result of the low prices realised in Bid Window 4 of the REIPPP programme, a growing number of South African energy experts have expressed the belief that the least-cost new build option for South Africa is variable renewable energy, in the form of solar PV and wind, with natural gas generation to provide a flexible back-up. They believe furthermore, that this signals the end of the road for traditional “base-load” technologies such as nuclear and coal. These ideas are vehemently opposed by the pro-nuclear lobby which views the combination of renewables and natural gas as a recipe for disaster. This study investigates whether a combination of solar PV and wind with LNG for flexibility can indeed supply base-load and in so doing, replace nuclear technology as a base-load option for South Africa. It compares the cost of three combinations of solar PV and wind with an LNG back-up to nuclear, using LCOE as a metric for comparison. It then investigates the technical feasibility of supplying base-load with renewables and LNG, firstly by comparing gas turbine ramping rates to renewables variability rates and secondly, through a literature review, whether there are any other insurmountable technical challenges. The literature review includes an assessment of whether renewables can supply 100 % of an electricity system’s requirements. It finds that renewables plus natural gas for flexibility is cheaper than nuclear for all three scenarios analysed, and that there are no insurmountable technical problems to renewables supplying a significant portion of a system’s base-load requirements. On the matter of renewables providing 100 % of a system’s needs however, there remains a lack of historical evidence that renewables can do this. Although LCOE is a valuable comparative tool, it sometimes omits significant externalities. In this case the data used was found to exclude the cost of establishing LNG importing infrastructure in South Africa. Importing LNG will also introduce the risk of price shocks and negative exchange rate fluctuations. Furthermore, although LNG is cleaner than coal it is not as clean as nuclear. The prudent approach to energy planning in South Africa therefore, is to spread the risk and adopt an “energy mix” approach in which no single technology dominates. A small window of opportunity remains open for nuclear technology in South Africa, but to exploit this opportunity nuclear technology must urgently find ways to address commonly held public perceptions that it is an expensive and unsafe technology.