Government has begun the consultation process with regards to the Integrated Resource Plan (IRP), Energy Minister Jeff Radebe said on Thursday.
“We have embarked on the consultation process of the IRP which will also indicate the energy mix that we need for the next few years,” said Minister Radebe.
Addressing a media breakfast session at the department’s Independent Power Producer (IPP) office in Tshwane, Minister Radebe said the Department of Energy (DoE) is steadily working towards concluding the review of the IRP by no later than mid-August this year.
In December 2017, Cabinet announced the approval of the reviewed plan that determines the country’s long term electricity demand.
“In terms of timeline I intend to go to Cabinet by mid-August 2018 which means that the technical report which is virtually ready will start the process within government but also a public process that will include consultation with Nedlac [National Economic Development and Labour Council],” said the Minister.
Minister Radebe also said that South Africa intends to build a new oil refinery as part of ensuring the country’s energy supply.
“It’s our intention as well to ensure that we build a refinery. We cannot just sit by and observe processes going on in the world, and we need to do something as well for our own energy security of supply,” said the Minister.
The DoE is intent on developing a new oil refinery implementation framework that will assist the country to start looking at having its own oil refinery.
In the DoE Budget Vote speech in 2017, government said that South Africa is ready for a new refinery investment.
The United States recently announced its decision to reinstate sanctions on Iran that would have an impact on crude oil supply.
Deputy Director General at the department, Tseliso Maqubela, said South Africa currently has no crude oil imports from the Middle Eastern country.
“Currently there are no crude oil imports that come from Iran. In as far as the immediate impact of the sanctions being imposed by the US, the impact is only going to be felt on price off crude oil. There are indications that it will go up. But in as far as supply of crude oil to South Africa, there’s no immediate impact,” said Maqubela.
The DDG further added that the country is not meeting the demand for petroleum products and is currently importing more than a quarter of its petroleum products.
“It’s about the growth of demand which outstrips what the refineries can supply in South Africa. The economy has grown and so has demand for petroleum products,” said Maqubela.
South Africa has no crude oil reserves of its own and about 60% of its crude oil requirements are met by imports from the Middle East and Africa. Crude oil is refined at South Africa’s four crude oil refineries.
The country imports crude oil from three countries mainly Saudi Arabia, Nigeria and Angola.
“We’ve reached a stage in South Africa where we import more than a quarter of our petroleum products requirement, hence the need to look into the refinery framework.”
He further added that geopolitical developments in the Middle East will cost consumers at the pumps going into the future.
“Developments particularly in the middle East are not going to bring good news for our petroleum products prices,” he said.
Thursday’s media engagement session was held at a time when the department marks Energy Month. The month is observed every year in May where the DoE makes citizens aware of issues relating to energy efficiency.