ENB Pub Note: This article is from America Outloud, and Ronald Stein, P.E., and Dr. Lars Schernikau have been on the Energy News Beat podcast! They are fantastic, and we recommend reading America Outloud.
An extensive economic review of South Africa’s Integrated Resource Plan 2025 (IRP 2025), approved by Cabinet in October 2025 has been conducted by the authors, and the report concludes that the South African IRP 2025’s emphasis on variable wind and solar electricity will raise the cost of electricity, undermine economic growth, and fail to deliver on South Africa’s national priorities of poverty alleviation, inequality reduction, and improved living standards. The findings and recommendations are applicable to any country, but especially to industrialized and developing economies.
Electricity is a service, not merely a product. It must be available on demand 24 hours a day, 7 days a week, 365 days a year, at the correct frequency, voltage, phase, and current. This is the physical reality governed by the laws of thermodynamics and electromagnetism. Supply and demand must balance instantaneously, or the grid collapses.
In South African conditions, solar PV achieves annual natural capacity factors of ~26%, while wind reaches ~35% in favorable locations. These figures reflect the inherent variability of natural resources. Solar produces nothing at night and minimal power during cloudy days, and wind can drop to near-zero during prolonged calm periods. Variable sources cannot guarantee dispatchable electricity without 100% backup from baseload generation in the form of coal, gas, or nuclear-generated electricity. The cost of such backup increases with unpredictable wind and solar power in the system.
All electricity backup requirements must be built, fueled, staffed, and maintained regardless of whether wind and solar are generating electricity. The same dispatchable plants can simply run continuously at higher load factors, producing reliable electricity without the additional capital, land, transmission, and integration costs imposed by wind and solar. Adding significant variable capacity on top of full dispatchable backup is economically redundant, physically wasteful, and harms the environment.
The True Cost of a Variable-Heavy System: Standard levelized cost metrics (LCOE) fail to capture these realities of intermittently generated electricity. Full Cost of Electricity (FCOE) analyses are more appropriate as a cost measure by incorporating intermittency, backup requirements, grid upgrades, overbuilding, and stability measures. When applied, the FCOE shows that high wind and solar pathways increase overall system costs compared to dispatchable-dominant systems, and costs increase the more wind and solar are in the system. Global evidence is clear: Adding more solar and wind to the energy supply pushes up the price of electricity for consumers and businesses. The prices of electricity in countries with high wind and solar penetration have consistently exceeded those in coal-dominant Poland and nuclear-dominant France by substantial margins, even after accounting for taxes and subsidies.
South Africa possesses abundant reserves of approximately 53 billion tons of coal and significant uranium (sixth largest in the world). Thus, providing a clear comparative advantage in high-density, dispatchable generation. These resources enable net load factors of ~90% for nuclear and strong performance from modern HELE coal plants, with minimal land use, low emissions, and inherent rotational inertia for grid stability.
Economic and Social Consequences: The trajectory that South African policy makers have adopted risks higher effective electricity prices, reduced supply security, and diminished investor confidence in electricity-intensive sectors. Historical evidence shows that electricity price increases and supply uncertainty have already constrained GDP growth to well below the 4%+ annual rate required to address unemployment and meaningfully raise living standards.
By contrast, a rebalanced mix prioritizing dispatchable sources, allocating approximately 80% to conventional and nuclear technologies while limiting “renewables” to 20%, would deliver significantly greater reliable output. This translates to potentially 75% more dispatchable electricity, at an estimated ~30% lower full system cost. This approach would better support industrial expansion, attract domestic and foreign investment, and align with strategies in high-growth economies such as India, China, Kazakhstan, and the ASEAN countries, which continue to emphasize coal and nuclear for industrialization.
Nuclear-powered electricity holds transformative potential beyond electricity generation. It fosters domestic manufacturing capability, advanced skills training, and potential export markets, generating sustained high-skill employment across the value chain. Small Modular Nuclear Reactors (SMRs), Generation IV SMRs, are set to be the future of modern, zero-emission, clean electricity generation. A nuclear build is an economy-changing event.
A Call for Physics-Aligned Policy: Electricity policy cannot defy thermodynamics. Intermittent sources cannot replace dispatchable electricity without substantial redundancy, cost escalation, and increasing “environmental footprint.” The policy adopted in South Africa in 2025 establishes a foundation, but meaningful adjustments are essential to ensure electricity remains affordable and secure.
South Africa must leverage its natural endowments in coal and nuclear, supported by gas (where economically viable) and targeted wind and solar applications. Only a dispatchable-focused strategy will deliver the reliable, cost-effective electricity essential for higher economic growth and the fulfillment of national development priorities. The evidence is unambiguous – dispatchable electricity is not optional; it is the cornerstone of sustainable economic growth.
Policymakers carry a huge responsibility. The laws of physics don’t negotiate. If they are ignored, South Africans and many countries around the world will pay the price in darkness, higher bills, and lost opportunities. If they are respected, electricity systems that truly support the future of countries can be built.
The U.S and other countries that follow the South Africa path will finally meet their objectives of providing reliable, affordable electricity to create jobs, reduce poverty, and improve the living standards of their citizens.
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