March 1, 2011 / 12:03 PM / 7 years ago

UPDATE 1-S.Africa to pass new energy plan into law by April

* Plan has been delayed on concerns over costs, timeline

* Plan draft sees greater role for nuclear, renewables

(Adds details, quotes, Eskom)

By Ruona Agbroko

JOHANNESBURG, March 1 (Reuters) - South Africa’s new energy resource plan, which will determine the country’s electricity mix over the next 20 years, will be passed into law by the start of April, a government official said on Tuesday.

The draft Integrated Resource Plan (IRP 2) has called for nuclear and renewable energy to play a bigger role in plugging South Africa’s power deficit as it seeks to halve its reliance on coal, which supplies some 95 percent of the country’s power.

Investors in the world’s top platinum producer, also a major gold supplier, are watching for moves to boost the country’s power supply after a 2008 crisis forced mines to shut for days, costing South Africa billions of dollars in lost output.

The plan came under fire late last year and was delayed after industrial leaders, bankers and environmentalists questioned its costs, timelines and feasibility. [ID:nLDE6B20DB]

But Thabang Audat, chief director of electricity in the department of energy, said the process of passing the plan into law was continuing.

“With the expectation that the cabinet process will take up till the end of March, come the first of April, we should have a promulgated (integrated resource) plan,” he told Reuters on the sidelines of an energy conference in Johannesburg.

After the cabinet has dealt with it the legislation has to be approved by parliament, before the president signs and promulgates so that the law takes effect.

Private producers have said they could easily supply power to the grid at no cost to utility Eskom [ESCJ.UL] nor to the National Treasury if given the chance, but they need a policy framework to do so.

They have been frustrated by delays in passing the plan after spending millions in getting projects off the ground.

Africa’s biggest economy currently relies on coal for almost all of its electricity supply, but the draft of the plan proposed nuclear supplying 14 percent of the country’s energy mix by 2030 and renewable energy 16 percent.

The remaining capacity was proposed to come from open cycle gas turbines, pump storage schemes and imported power generated from hydroelectric plants.

Power utility Eskom said it expects South Africa’s power demand to grow 2 percent this year but warned that supply would remain tight until its new power plants come on stream.

“The supply-demand margin will remain slim for the next 5-6 years and in particular the next two years,” Kannan Lakmeeharan, an executive at Eskom, said at the same conference.

The utility expects to sign deals with independent power producers for 400 MW of co-generated power by April and would like to help procure other 1,500 MW of renewable energy in the next three to four years to help ease the supply crunch. (Writing by Agnieszka Flak, editing by Anthony Barker)

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