South African Energy Policy FES Briefing Paper 11| August 2007 Page 9 Sectoral Energy Consumption [TJ] [PJ] 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total Energy Consumption [TJ] / GDP [Rm] 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Energy consumption per sector and GDP Resource Planning processes that have been mentioned. South Africa has recently started with official policy-linked activities contained in the Energy Charter such as 15 : “ development of long-term energy demand and supply scenarios to guide decision-making; ” in the Integrated Energy Plan 16 of 2003 and follow-up research report: Clean Energy and Development for South Afri­ca 17 . 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Projected fuel use by demand sector: base case 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Industry Commerce Residential Mining Transport Agriculture Non-specified(other) Non-energyuse GDP at 2000 prices [Rm] Total Energy consumption energy saving and ef­ficiency measures. Primary energy supply is modeled to rise from year 2000 to 2020 from about 4,100 PJ to 6,700 PJ under a base case (63%) and 5,900 PJ (44%) under an op­timized energy sa­vings and efficiency regime. Energy supply In the current economic regime(e.g. no manda­tory carbon taxes, existing CDM conditions, ex­pected international crude-oil and gas prices…) coal will retain its cost advantage in South Africa and the underlying economics of patterns of energy production will not change significantly up until 2030. With CO2 taxes of R150/tonne, it would make economic sense to shift a small amount electricity generation to CCGT and nuc­lear. The National Integrated Resource Plan(NIRP2), official government plan for electricity generation and Eskom an­nouncements are at significant variance with no nuclear electricity generation in Residential NIRP2 and a significant nuclear compo­Commerce Agriculture Transport nent in the Eskom plan. Nevertheless even with introduction of some nuclear Industry and CCGT primary usage patterns will remain similar to now with the large re­liance on coal remaining. 0 2001 2005 2010 2015 2020 2025 2030 Supply/ demand balance Energy demand Models of expected energy demand in the offi­cial Integrated Energy Plan and the latest follow­up modeling show that if South Africa continues with current energy usage practices final de­mand could be expected to increase by 200% from about 2,200 PJ to 6,700 PJ which could be cut to 5,700 with successful implementation of 15 Energy Charter Protocol on Energy Efficiency and Related Environmental Aspects(Annex 3 to the Fi­nal Act of The European Energy Charter Confe­rence) 16 Integrated Energy Plan for the Republic of South Africa Department of Minerals and Energy 19 March 2003 17 Clean Energy and Development for South Africa: Results. Alison Hughes, Mary Haw. Energy Re­search Centre, University of Cape Town. 28 Feb­ruary 2007 Report 3 of 3 Thus, in summary, South Africa has problems in common with those stated in the G8, namely that energy demand is“estimated to rise by more than 50% by the year 2030, approximately 80% of which would still be met by fossil fuels, which are limited resources”. 6. Diversifying energy mix “Securing supply through diversity” is one of the five fundamental policy objectives stated in the SAWPEn but economic considerations make switches in current South African energy produc­tion and usage patterns problematic. Historically, low energy prices have resulted in low efficien­cies in much of South African energy production and use, and choices of energy carrier are most often driven by economic rationality and within South Africa the pervasiveness of and depen-