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Fossil Fuels vs Green Energy Technologies: A Foresight
Technology Mapping of South Africa
A DISSERTATION
PRESENTED TO
The Graduate School of Business
University of Cape Town
In Partial Fulfilment of
The Requirements for the
Master of Business Administration Degree
BY
Donovan Traube
MBA Full Time 2015
Exam number: 419
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Plagiarism Declaration
1. I know that plagiarism is wrong. Plagiarism is the use of another’s and to pretend that
it is one’s own.
2. I have used the recognised American Psychological Association (APA) convention
for citation. Each significant contribution and quotation from the works of other
people has been attributed, cited and referenced.
3. I certify that this research report is my own work.
4. I have not allowed, and will not allow, anyone to copy this research report with the
intention of passing it off as their own work.
5. I acknowledge that copying someone else’s research report is wrong and declare this
my own work.
Name: Donovan Traube
Signature:
Date: 09/12/2015
Place: Graduate School of Business – University of Cape Town
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Acknowledgements
I would like to thank my family; especially my parents for getting behind me in my choice to
study further. Their support has been unconditional and really appreciated. Secondly I would
like to thank my sister for her help with editing from abroad. Thanks also goes to my younger
sister for simply being my younger sister (not thanking her will get me in trouble.
I would like to Mary Lister for her Mendeley referencing skills and patience (this wasn’t the
only assignment she fixed this year).
Lastly, I’d like to thank my fellow students for making the MBA process an unforgettable
experience. More specifically my close mates this year, you know who you are, we had some
great fun writing our dissertations in the knowledge hub (Seminar Room 33).
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ABSTRACT
The purpose of this research is to build a technology foresight map of South Africa’s energy
supply environment in relation to the generation of electricity. Currently the South African
energy sector is dominated by coal power which provides up to 77% of South Africa’s primary
energy needs and 93% of all electricity production (Department of Energy, 2015a). Due to the
global emphasis on carbon emissions which are produced through the burning of fossil fuels,
there is now a drive to reduce our reliance on mature fossil fuel technologies. The actions being
taken involve the introduction of newer green technologies to mitigate carbon emissions and
their subsequent environmental impact. This study attempts to observe the various fossil fuel
and green energy technologies available and in use within South Africa and then determine
what their development schemes are. These development schemes are reliant on more than just
technological capability. To encompass these factors a technology foresight framework is used
to structure the study and provide guidance for assessing energy technologies in the case of
South Africa.
The data collection method used was a hybrid of the Delphi and roadmapping techniques.
Various aspects of each style were adapted within the limitations and a structured questionnaire
guide was designed to help achieve consensus in the trajectories of the various fossil fuel and
green energy technologies.
The results of the study indicated which factors need to be strongly evaluated when mapping
both green energy technologies and fossil fuel technologies on a case basis in an
overwhelmingly fossil-fuelled environment (South Africa). They are briefly described below;
Technology implementation in South Africa is largely affected by the socio-political
landscape which has produced a centralised system that is supply-heavy and fossil fuel
based. The mature technologies are found to be robust within themselves but have
limits due to externalities. Diversification via renewables introduces varying levels of
robustness (dependent on the technology) and therefore improves the security of supply
to a certain extent. These changes include, becoming more demand-oriented through
smaller capacities and increased energy services therefore introducing decentralisation
onto South Africa’s centralised system.
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List of Acronyms
CCS Carbon Capture and Sequestration
CCGT Closed Cycle Gas Turbines
CCT Clean Coal Technologies
CSP Concentrated Solar Power
DoE Department of Energy
EDL Economic Distance Limit
ESKOM Electricity Supply Commission (State owned electricity supplier)
GHG Greenhouse House Gas
GW Gigawatt
LCC Lifecycle Cost
LFR Lead cooled fast reactor
LMFR Liquid metal fast reactor
MEC Minerals-Energy Complex
MW Megawatt
NDP National Development Plan
NGO Non-Governmental Organisation
OCGT Open Cycle Gas Turbines
PV Photovoltaic
RDP Reconstruction and Development Programme
REIPPPP Renewable Energy Independent Power Producer Procurement
Programme
SA South Africa
TNA Technology Needs Assessment
2DS 2°C Scenario
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Table of Contents
1. RESEARCH TITLE...............................................................................................................1
2. INTRODUCTION .................................................................................................................1
2.1 Research Area and Problem.............................................................................................1
2.2 Research Questions and Scope.........................................................................................4
2.3 Research Assumptions .....................................................................................................4
2.4 Research Ethics ................................................................................................................4
3. LITERATURE REVIEW ......................................................................................................5
3.1 Green Technologies (background)...................................................................................5
3.2 Fossil Fuel Technologies (background)...........................................................................6
3.3 Technology Foresight Framework ...................................................................................7
3.3.1 Key technologies identification.................................................................................7
3.3.2 Identification, observation, analysis of technologies...............................................10
3.3.3 Monitoring of technologies, research findings to date ............................................11
3.3.4 Technology analysis in the context of competitiveness ..........................................23
3.3.5 Evaluation of opportunities and threats associated with technological development
..........................................................................................................................................26
3.3.6 A vision of future technological trends ...................................................................30
3.3.7 Identification of actions supporting the development of desired technologies .......32
4. CONCLUSION....................................................................................................................35
5. RESEARCH METHODOLOGY.........................................................................................37
5.1 Research Approach and Strategy ...................................................................................37
5.2 Research Design, Data Collection Methods and Research Instruments ........................39
5.3 Sampling.........................................................................................................................40
5.4 Data Analysis Methods ..................................................................................................42
6. RESEARCH FINDINGS, ANALYSIS AND DISCUSSION.............................................44
6.1 Research Analysis ..........................................................................................................44
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6.2 Research Findings ..........................................................................................................46
6.2.1 Secure and Continuous Supply................................................................................46
6.2.2 Social Acceptance....................................................................................................48
6.2.3 Decentralised and Centralised energy supply systems............................................51
6.2.4 Elements of Technology and Analysis ....................................................................56
6.3 RESEARCH DISCUSSION ..........................................................................................59
6.3.1 Fossil Fuel Technologies vs Green Energy Technologies ..........................................60
6.3.1.1 Identification, observation and analysis of technologies......................................60
6.3.1.2 Technology analysis in the context of competitiveness .......................................61
6.3.1.3 Evaluation of opportunities and threats associated with technological
development......................................................................................................................64
6.3.1.4 A vision of future technological trends ................................................................66
6.3.1.5 Identification of actions supporting the development of desired technologies ....68
6.4 Research Limitations......................................................................................................69
7. RESEARCH CONCLUSIONS............................................................................................70
7.1 Identification, observation and analysis of technologies ...............................................70
7.2 Technology analysis in the context of competitiveness.................................................71
7.3 Evaluation of opportunities and threats associated with technological development....72
7.4 A vision of future technological trends..........................................................................73
7.5 Identification of actions supporting the development of desired technologies..............73
7.6 Key technologies identification......................................................................................74
8. FUTURE RESEARCH DIRECTIONS ...............................................................................76
LIST OF REFERENCES.........................................................................................................77
APPENDICES .........................................................................................................................84
Appendix A: Questionnaire Guide.......................................................................................84
Appendix B: List of cited quotes from interviews as imported from Atlas.ti......................86
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Table of Figures
Figure 1: Total primary energy consumption for South Africa, 2013 .......................................2
Figure 2: The technological context in foresight research.........................................................3
Figure 3: Estimated energy share of global final energy consumption, end 2012.....................8
Figure 4: Global investment in fossil fuel supply......................................................................8
Figure 5: Estimated renewable energy share of global energy production, end 2013...............9
Figure 6: Global new investment in renewable energy by technology, developed and
developing countries, end 2013 .................................................................................................9
Figure 7: The elements of technology .....................................................................................11
Figure 8: Components of a silicon PV cell ..............................................................................12
Figure 9: Solar-field components of a CSP system .................................................................13
Figure 10: Cross section of a large hydroelectric plant ...........................................................14
Figure 11: Grid connection rates and the required rates to reach the 2DS targets...................22
Figure 12: (a) Conventional electricity distribution network. (b) Electricity distribution
network with distributed generation ........................................................................................25
Figure 13: The triangle for social acceptance of renewable energy innovation ......................27
Figure 14: The Six Capital Axes..............................................................................................29
Figure 15: Countries with renewable energy policies, early 2014...........................................33
Figure 16: Data Structure example ..........................................................................................43
List of Tables
Table 1: Total Global Energy Consumption..............................................................................2
Table 2: Typical Values of Surface Roughness Length z0 in Metres for Various Types of
Terrain......................................................................................................................................17
Table 3: Major steam coal producers (million tonnes) ............................................................19
Table 4: Summarised results for REIPPPP Windows 1, 2 and 3.............................................34
Table 5: Participants interviewed.............................................................................................41
Table 6: Data Structure ............................................................................................................45
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1. RESEARCH TITLE
Fossil fuels vs Green Energy Technologies: A foresight technology mapping of South Africa.
2. INTRODUCTION
2.1 Research Area and Problem
The purpose of this research was to develop a technology foresight map of the energy supply
environment in relation to the production of electricity so as to provide insights as to what
technologies will be present and/or prevalent in the next 20-30 years within South Africa (SA).
It also details the possible changes these technologies may undergo. The scope of technology
for this research assignment was focused on energy technologies that are either fossil fuels-
based or part of the renewables sector. The context for this study was derived from the big push
we see in the world to move from carbon-based fossil fuel technologies towards more
sustainable and green technologies in order to reduce the impact of global warming and climate
change.
It is a comforting notion to behold that the world’s future energy is to come from green
technologies but given limitations in these alternative energy sources it is necessary to
understand that they will share this space with the fossil fuels sector, as they already are and
will most likely continue to do so. Table 1 below indicates to us that a staggering 87.8% of the
world’s energy is currently derived from non-renewable fossil fuels. Further reasons for
conducting this research was to ascertain the relevance of certain technologies in the future.
According to the European Commission (2013) there is no single renewable energy technology
that alone can sustain a complete transformation from fossil fuels. This is because most energy
sources in the renewable sector are not sufficiently abundant or they have drawbacks in terms
of security of supply. This means that the development of multiple technologies is required to
help wane society off fossil fuels. Ultimately pressure falls on governments around the world
to implement large scale energy policy changes. In this scramble for changing the energy
supplies there can be an element of oversight as certain technologies are pushed through
without properly assessing whether they are not only viable but technologically ready in a
feasible sense.
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Table 1: Total Global Energy Consumption
Source: (Letcher, 2014)
In order to build a technology foresight map for SA, a technology needs assessment (TNA)
was conducted. A TNA is “a set of country-driven activities that identify and determine the
mitigation and adaptation technology priorities of countries” (Technology Needs Assessment,
2015). In this study the TNA was focused on the green technologies and fossil fuels sectors of
SA. It indicated what the needs are, “for new equipment, techniques, services, capacities and
skills necessary to mitigate GHG emissions and reduce the vulnerability of sectors and
livelihoods to climate change” (Technology Needs Assessment, 2015). Below is a pie-chart of
the South African energy consumption and you can immediately see the disparity in energy
sources used as compared to the global energy sources in Table 1.
Figure 1: Total primary energy consumption for South Africa, 2013
Source: (BP, 2013).
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Not only does both the world and SA overly rely on fossil fuels, SA indicates a significant
over-reliance on coal which makes for new energies and diversification much harder to
breakthrough as the energy supply environment and infrastructure is significantly biased
towards this particular energy source.
Another method used was technology roadmapping. Technology roadmapping provides
navigational assistance for interested parties whilst travelling through partly known and partly
unknown territories. It encompasses all activities including technologies, products, processes,
functions, market agents, competencies, projects and further aspects (Martin G. Moehrle,
Isenmann, & Phaal, 2013). A framework is required to encompass the above two definitions
and to build a technology foresight map of SA. The framework below was used to assess the
energy technologies. It is taken from Gudanowska (2014).
Figure 2: The technological context in foresight research
Source: (Gudanowska, 2014).
This research was predictive and the results obtained will hopefully be useful in the
development of a safe, secure and sustainable energy supply system as the scientific realm of
policy decisions regarding the different types of technology are brought forward.
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2.2 Research Questions and Scope
Some questions that need to be answered in this study include finding out what is required for
the world to begin shifting its sources of energy supply so that it encompasses the green
technologies but does not exclude the improvement of the current embedded technologies of
fossil fuels. The predominant source of energy for the planet comes from fossil fuels and it is
known that large industries with important skills are involved and rely on these sources. It is
unrealistic to assume a rapid global shift in energy supply systems since developed and
developing countries have differing future energy needs, let alone resources. The question is;
when will these technologies be an optimum choice for energy supply within a greater energy
supply system of SA? According to Keppo and Strubegger (2010) the constraints such as
resource availability, energy transmission and distribution infrastructures, possible
environmental restrictions and costs need to be included in a foresight decision. These factors
have been explored.
2.3 Research Assumptions
As a researcher interviewing experts in various fields of energy, it is assumed that answers
obtained from interviewees were accurate and true. The experts interviewed were carefully
selected based on academic and industry experience credentials. As part of the literature review
of this paper, a sound background understanding was gained through thorough analysis of
accredited journals and other various up-to-date sources. This accumulation of knowledge on
the subject of fossil fuels and green technologies in SA mitigated as many inaccuracies that
protruded in the interview responses.
2.4 Research Ethics
This research project was conducted in a professional manner. All participants involved were
privy to any information they requested. This was done to ensure that they understood that all
research conducted was done transparently. Individuals interviewed were made aware of the
purpose of the study and a confirmation of their understanding was made prior to the start of
the interviews through the signing of a consent form. All those interviewed were made aware
that they were allowed to withdraw from the research at any time. All interviews were recorded
using a recording device and transcribed timeously. The details of interviewees are kept
confidential.
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3. LITERATURE REVIEW
3.1 Green Technologies (background)
Green technologies are not a new phenomenon. What is new is the sudden interest in these
technologies since the general acceptance that the world’s temperatures are rising due to an
increase in the carbon dioxide levels in the atmosphere. The economic emergence of the
world’s biggest populations such as China and India has now posed the question of how finite
our resources are that provide us with energy. These nations have the populations to consume
vast amounts of fossil fuels and other resources such as food. A worrying factor as pointed out
by Preisig and Wittgens (2012) is that we as humans have not been enabling the biosphere to
bind this carbon dioxide, instead we have been clearing vital ecosystems which help control
carbon dioxide levels in order to make way for large-scale commercial food production. In the
past such disruptions in the environment was relatively confined to specific regions and didn’t
have globally adverse effects but since it is the biosphere that is being affected by the large
scale carbon emissions, “for the first time in history, human activities are having an impact on
earth as an overall system” (Weinberger, Jörissen, & Schippl, 2012, p. 32). As part of solving
this problem a large amount of public and private investment has gone into developing and
bringing forward technologies that can help reduce our dependence on fossil fuels. The
problem is that oil, coal and gas are considered high density fuel sources each in their own right
(Droste-Franke et al., 2009) and have therefore been exploited for many years with proven and
continuously improved technologies in converting them to energy. This remains a problem for
the renewable sector in that the density of these alternative sources of energy supply are
substantially less, in the most part in terms of their storage potential. Energy storage is probably
one of the most important technologies that needs to go hand in hand with renewables. This
point is reiterated by Harell and Daim:
The need for the complementary technologies to successfully implement the new
technology is often lagging. In the case of renewable energy, many of the developing
technologies are unpredictable or intermittent in their ability to produce energy and as
such will require additional energy storage technologies to mitigate the erratic nature
of the energy production. This energy storage dilemma is a key negative attribute of
renewable energy… (2009, p. 74).
In order for renewables to compete, their technologies have to substantially improve and it is
important to understand that for them to be competitive, an energy supply system should take
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on an holistic view of these green technologies (Weinberger et al., 2012). The rollout of
renewables therefore cannot be done in isolation. Letcher (2014) holds a similar view in that
for mankind to significantly reduce carbon emissions, we cannot and are not able to fully
abandon the use of fossil fuels. Also, a holistic view is required, involving different renewable
technologies, improving energy efficiencies, pursuing carbon capture and sequestration (CCS)
and transitioning from heavy polluting coal to natural gas (the least polluting conventional
fossil fuel).
3.2 Fossil Fuel Technologies (background)
Fossil fuels are the predominant source of energy around the world. Their technologies are
entrenched and are likely to remain the base load of energy for an extended period of time.
Oliver (2008) states that globally fossil fuels will remain the dominant means of producing
electricity. This is because large scale power plants are built with considerable investment and
in order to make them financially viable they need to run for life-times of up to 40 years. The
International energy agency predicts that the use of natural gas and low-carbon fuels will grow
the strongest and will slowly start to replace oil and coal, but by 2040 the energy outlook will
still remain in strong favour of fossil fuels. “By 2040, each fossil fuel accounts for around one-
quarter of global energy demand, with the remainder from low-carbon fuels” (International
Energy Agency, 2015d, p. 1). It is known that although there is great pressure to phase-out
fossil fuels their ability to provide secure base load power cannot be discounted. The G20
leaders committed to this phasing-out in 2009 but contrary to commitments, subsidies are
growing in fossil fuels. Global Subsidies in 2011 were at $523bn (Schwanitz, Piontek, Bertram,
& Luderer, 2014) and it has more recently been reported that this figure is now 550 billion
USD. A figure four times greater than global subsidies spent on renewables.
The term ‘fossil fuel’ portrays a picture of a world with limited supply. We are told that these
sources of energy that we are pulling from the ground took millions of years to form through
natural geological processes. The rate of our consumption by far supersedes the rate of natural
fossil fuel formation but do we need to be worried? Will the world run out of fossil fuels in the
near future? This is a hotly debated question as answers can only be made based on proven
reserves. According to Dumane (2015) there is an estimated global market value of fossil fuels
of $27 trillion waiting to be tapped into (proven reserves). Fossil fuels are considered to be
relatively cheap and dependable and in the emerging countries of our time (China, India and
even SA) the need for an energy source with such attributes is perceived to be key for lifting
people out of poverty. To understand the importance and size of fossil fuel futures is knowing
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that there are nearly 1200 new coal-fired power plants proposed for development and the
majority are in China and India (The World Resources Institute, 2015). One of the worrying
facts from an emissions point of view is the lock-in that occurs with fossil fuel technologies
due to the lifespan and scale of these technologies once installed. Large capital investments are
made and so new technologies, particularly renewables, are not adopted due to the prior large
investments (Keppo & Strubegger, 2010). Not having a really progressive long term
perspective, coupled with an already secure supply of energy heavily reduces the incentive to
switch to new alternative technologies.
A great example of this exact situation is seen in SA, classified an emerging market with a
current shortage in electricity supply. The total price of its new coal-fired power station,
Medupi, is expected to eventually cost R150bn (Eberhard, 2013). Not to mention there is
another coal-fired power station, Kusile, of equal size simultaneously being built with an
estimated total cost of “118.5 billion Rand excluding interest during construction, cost of cover
and inflation” (Eskom, 2015d). The output of each of these stations is 4800 megawatts and the
country’s current plan is to only introduce 17 800 megawatts in renewable energy sources (via
private sector) from 2010-2030 as allocated by the Department of Energy (Department of
Energy, 2015d). This seems like a dwarfing amount and great for renewables but given that
upgrades will continue on existing big coal and new nuclear plans to be implemented, by 2030,
only 9% of SA’s total generation capacity will be from renewables (WWF, 2015).
3.3 Technology Foresight Framework
3.3.1 Key technologies identification
This research will focus mainly on the four types of renewable sources of energy and four
different types of fossil fuels. The technologies to be investigated are: solar, hydro, biomass,
wind, oil, coal, gas and nuclear. The basis for this choice is not only for scoping purposes but
these technologies have and are currently dominating the energy space on a global stage, by
being the most present and by attracting the most interest in terms of the global investment in
the energies sectors. Since technologies eventually get widely disseminated it is right to
identify them at this level first and then observe at the South African level. It is believed that
on these two factors alone, one can surmise that the future energy space of SA will then largely
be influenced by them, hence their relevance and choice in this study. The figure below
illustrates the estimated energy share of global final energy consumption.
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Figure 3: Estimated energy share of global final energy consumption, end 2012
Source: (Renewable Energy Policy Network for the 21st Century, 2014)
Of the fossil fuels the current investment flows can be seen in Figure 4 below which indicates
oil, coal and natural gas being the largest in the fossil fuels sector. They also consequently are
the biggest three sources of energy in the world as shown in Table 1. Hence why they have
been chosen for this study.
Figure 4: Global investment in fossil fuel supply
Source: (International Energy Agency, 2014b)
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The next largest sector for energy production is the renewable sector and the figure below
illustrates the prevalence of each renewable technology currently employed in global
production.
Figure 5: Estimated renewable energy share of global energy production, end 2013
Source: (Renewable Energy Policy Network for the 21st Century, 2014)
Furthermore the figure below illustrates the investment flows for the various renewables and
therefore confirming the choice of renewables selected in this study.
Figure 6: Global new investment in renewable energy by technology, developed and
developing countries, end 2013
Source: (Renewable Energy Policy Network for the 21st Century, 2014)
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Nuclear energy has been bundled into this study and falls under the fossil fuels bracket. It is
not exactly a fossil fuel but since its core source of fuel is mined (Uranium and Plutonium) it
will be classified as a non-renewable for this study. Its relevance is shown in Figure 3 where
nuclear power alone supplies 2.6% of the world’s energy.
SA is a fossil-fuelled economy but this is slowly being diversified through initiatives such as
the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP)
which will be discussed more in depth later in this paper. Figure 1 indicates SA’s total primary
energy consumption. One can see the heavy reliance on fossil fuels. Hence the importance of
such a study as this trend is beginning to change globally and in SA.
3.3.2 Identification, observation, analysis of technologies
Elements of Technology and Analysis
To perform identification, observation and analysis of technologies certain parameters need to
be set so as to limit the scope of what you are looking for in an energy technology. A starting
point for assessing various energy technologies can be to determine the usefulness of the
energy. Usefulness can be compared to utilisation. According to Bouffard and Kirschen (2008,
p. 4504), “The classic energy supply chain can be summarised quite succinctly. First, primary
energy is harvested remotely and may be transformed; it is then transported before it is finally
utilised.” Useful energy is then described by (Droste-Franke et al., 2009) as the actual energy
required to operate a machine and the output thereof. For example, “Useful energy includes
such things as the light required to read a book or the electricity needed to use a computer.”
(Droste-Franke et al., 2009). Energy technologies of any significance should be able to fulfil
this basic need. Certainly any technology that is involved in a foresight study should be able to
pass this test so as to be relevant in the future. All of the technologies selected for this study
haven proven themselves in terms of usefulness based on the level of their current use in the
world today. Usefulness doesn’t necessarily include all the elements of a technology. The
elements of a technology help to characterise them in relation to their market. According to
Nygaard, Hansen, Boldt and Trærup (2012) the elements include hardware, software and org-
how (orgware) as seen in the figure below. Hardware includes the tangible aspects of the
technology. Software include the processes associated with the production and use of the
hardware. The orgware includes institutional framework, or organisation, involved in the
adoption process of a new technology.
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Figure 7: The elements of technology
Source: (Nygaard et al., 2012)
It is important to understand the varying degrees of these three elements in different energy
technologies. Often in most technologies there is a strong hardware element with an embedded
software and orgware component. This can create confusion and in places like Africa, when a
TNA is done, those technologies that are lacking a strong hardware element are rarely chosen
just because its advantages aren’t as visible (Nygaard et al., 2012). Viewing technology in this
framework will help provide an objective view for this study.
3.3.3 Monitoring of technologies, research findings to date
3.3.3.1 Solar
Solar is considered to be the most abundant resource for power generation (Mai, Sandor, Wiser,
& Schneider, 2012). It is for this reason that Letcher (2014) believes the large drive in appeal
for solar power exists. For example enough solar radiation falls on the Earth at any given time
to provide an average of 20GW to every person. That is roughly the equivalent of 4 large
modern coal-fired power stations if you look at the capacity of the newly built Medupi or Kusile
stations in SA (Eskom, 2015d). The difficulty existing in solar energy is efficiently and
economically converting the sun’s rays to energy. One of the reasons for this is due to the
location of solar radiation abundance and consistency; “The equator receives the most annual
solar energy and the poles receive the least. Dry climates receive more solar energy than those
with cloud cover.” (Letcher, 2014).
Solar energy power generation is done broadly in two forms. One is the use of photovoltaic
(PV) panels and the second is via concentrated solar power (CSP). “Photovoltaic (PV) energy
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is a direct application of the photoelectric effect discovered by Edmund Becquerel in 1839,
whereby sunlight energy excites electrons present in metals. PV devices are able to convert
sunlight directly into electricity.” (Letcher, 2014, p. 383). CSP is very different to PV. It uses
the sun’s rays in a different manner which has multiple variations (see Figure 9 below). “CSP
technologies collect high temperature heat to drive a steam turbine.” (Mai et al., 2012, p. 12).
The systems involve tracking the sun’s rays so as to maximise the heat on a focal point. Glass
mirrors have been widely used as the concentrating collectors. This concentration is focused
on a heat conducting fluid which is used either directly in the in the power cycle to drive a
steam turbine or circulated to heat up another more heat holding substance such as molten salt
which is then used as energy storage to drive the steam turbine in the evenings.
Figure 8: Components of a silicon PV cell
Source: (Augustine et al., 2012, p. 77)
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Figure 9: Solar-field components of a CSP system
Source: (Augustine et al., 2012, p. 78).
Solar in SA has been implemented at scale in both PV and CSP but also through supplying
solar water heaters. The solar water heater rollout by government to many RDP
(Reconstruction and Development Programme) projects across the country has contributed to
making solar in SA as one of the biggest renewable energy providers. A major contribution to
the positive take-up of solar in SA is due to the abundance of radiation. SA has an average of
220 watts/square metre where as in the USA it is only 150 watts/square metre. This makes it
one of the highest solar radiation counts in the world (Department of Energy, 2015e).
3.3.3.2 Hydro
Hydroelectric power is generated by using water either from a reservoir such as a dam or from
a run-of-river to drive a turbine (Mai et al., 2012). The electrical energy is derived from the
potential energy of water moving from a high elevation to lower elevation (Letcher, 2014).
Hydropower constitutes 16% of worldwide electricity production which is more than nuclear,
only providing 12.9%. This 16% also staggeringly constitutes 85% of all renewable electricity
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production making it an already significant player in the alternative energies sector (Letcher,
2014). Hydropower operations depend on the environment and lay of the land, they therefore
vary in size and the way in which they operate. The technology has been around for a long
time, the first station was installed in 1882 in the USA. What is impressive is that the basic
technology used in this field of power generation is mature and many well-built plants are still
functioning a century later (Augustine et al., 2012). The technology can be classified as
relatively robust due to hydroelectric power stations being highly reliable for long periods of
time as well as their ability to upgrade and modernise in order to improve efficiency and
environmental performance. An illustrated example of a basic hydroelectric power station is
below.
Figure 10: Cross section of a large hydroelectric plant
Source: (Augustine et al., 2012, p. 41)
There are ten hydropower stations and 3 pumped storage schemes in SA. Due to the limited
hydro resources as well as the large scale environmental impacts of building dams in SA there
is not too much opportunity for expansion in this technology (Eyetwa, Mashimbye, & Goyns,
2010). There is however one large scale project under construction that does not fall under the
‘Renewable Energy Independent Power Producer Procurement Programme’ (REIPPPP). This
is the Ingula pumped storage scheme. It has been in construction since 2005 and is expected to
come online at the end of 2015. This will add 1332MW to the grid and will grow SA’s Hydro
by almost a third (Eskom, 2015b).
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3.3.3.3 Biomass
Biomass power is generated by collecting and combusting biological mass and using the heat
to drive a steam turbine (Mai et al., 2012). “Biomass is unique among renewable energy
resources in that it can be converted to carbon-based fuels and chemicals as well as electric
power” (Augustine et al., 2012, p. 30). Rittmann (2008) claims bioenergy is the best option for
reducing societies use of fossil fuels as the sun’s energy is captured in biomass and converted
to energy forms useful to modern society. Biomass residues can be in the form of agricultural,
animal, human wastes and a variety of industrial operations. According to Rittmann (2008),
microorganisms are used to convert these residues into useful energy products such as methane,
hydrogen and electricity. The other option is to produce biodiesel via the use of photosynthetic
organisms which basically means converting arable land into growing crops in order to produce
ethanol.
What is important when considering the use of biomass to produce various biofuels is ensuring
that they are biodiversity friendly. As explained earlier biomass can be in the form of grown
food crops. Intensifying agriculture in the name of energy production does not necessarily
make sense. For example at current energy extraction efficiencies, crops will have to be grown
on a massive spatial scale to replace even half of the US transportation fuel needs (Groom,
Gray, & Townsend, 2008). Rittmann (2008) agrees that diverting food crops to biofuels will
fail, as competing with food production for high-grade arable land, not to mention that the total
energy output is actually quite limited. Hence Groom et al. (2008, p. 608) states “corn-based
ethanol is the worst alternative among leading potential biofuels”. “Biofuels will only be
beneficial if they are cultivated under sustainable, biodiversity-friendly practices.” (Groom et
al., 2008, p. 608). Rittmann (2008) then suggests that the largest potential for converting
biomass into renewable energy is via the conversion of sunlight into high-value photosynthetic
microorganisms. Examples of these are certain algae which have high lipid contents which can
be extracted and converted into biodiesel at rates 100 times or more, greater than any other
plant system. Also the non-lipid biomass can then be converted to methane, hydrogen, or
electricity by the microbial conversion processes making algae and other similar photosynthetic
microorganisms the most feasible bioenergy solution (Rittmann, 2008).
Biomass is currently a very small sector of energy supply in SA. Bagasse is the largest use of
biomass as a source of energy. Bagasse is the waste fibre from sugar cane. It is used on a
decentralised basis (not being fed into the grid) at some sugar refineries to produce heat and
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electricity in the refining process. It is estimated that 245MW is currently installed throughout
SA (Eyetwa et al., 2010).
3.3.3.4 Wind
Currently wind resources on land and even offshore are relatively abundant around the world.
Wind turbines work on the premise of converting the kinetic energy of wind into electrical
energy. The amount of power a wind turbine produces relies on the available wind speed. No
wind equals no power, which causes intermittent power production. The importance for placing
wind turbines in high wind probability areas has resulted in developments of offshore wind
projects. This is an expensive option and locating the source compared to where the energy is
consumed can be very large in distance. On the upside, wind power has had more than 30 years
of development which has resulted in producing land-based wind energy at a cost of five times
less than when it began (Augustine et al., 2012). Also to highlight wind as a large scale
renewable resource for power, it is believed that globally there is sufficient kinetic energy in
wind that exceeds the world’s aggregate electricity consumption (Letcher, 2014).
Fortunately the options for improvements in offshore wind technologies looks promising which
will have large-scale positive effects on helping to further reduce man’s carbon emissions.
Offshore wind technology has roughly just more than a decade of experience and is perceived
to have greater opportunities for improvements and cost reductions than its counterpart land-
based technologies (Augustine et al., 2012). There are clear technical attractions for offshore
wind energy. Wind is stronger and more stable at sea (European Commision, 2013) due to the
lower turbulence levels experienced because of the more favourable surface roughness’s.
Offshore has the second lowest level of surface roughness (calm sea), the lowest level of
surface roughness is ice and mud flats which is not always geo-located very well (see Table 2).
Wind speed also increases with height and tends to reach its limit at 2000 metres known as the
gradient height (Letcher, 2014). This height factor is more suited to offshore as the technology
can still progress and the size of wind turbines is expected to increase to heights of 250 metres
in order to capture the more consistent and higher wind speeds. Construction and logistics of
these impressive pieces of equipment becomes more difficult with size but by moving offshore
it is believed this will be eased as road transportation is eliminated and transportation via boat
and barge to construction site is much more viable (Letcher, 2014).
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Table 2: Typical Values of Surface Roughness Length z0 in Metres for Various Types of
Terrain
Source: (Letcher, 2014, p. 318)
SA’s coastal region has a fair wind potential especially in the Eastern and Western Cape. A
number of wind farms have been installed both by Eskom itself as well as privately through
the REIPPPP. It has proven to supply some of the cheapest electricity in SA. The current
rewarded capacity for construction in SA is over 2GW (Department of Energy, 2015f).
3.3.3.5 Oil
Oil is the single largest source of energy and constitutes 35.3% of global energy consumption
(Table 1). Oil can be obtained via conventional and unconventional methods. Conventional oil
drilling involves tapping into wells and pumping the oil to the surface. The more costly and
often more difficult methods known as unconventional involve extracting the oil from shale
and tar sands. There are some bodies of evidence which suggest that conventional oil
production has a limited capacity and any major global additional demands will have to be met
by the more unconventional sources (Owen, Inderwildi, & King, 2010). Unconventional is said
to be more expensive due to the nature of their reservoirs but as known deposits in conventional
oil have dwindled, the large scale investment in the unconventional extraction methods has led
to some technological breakthroughs drastically bringing down prices that these sources should
now be considered conventional (Letcher, 2014). Unlocking these unconventional sources of
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oil in the USA (tight oil) and Canada (tar sands) is described as having brought in an era of
renewed energy abundance (International Energy Agency, 2014a).
Either way, the need for oil remains massive, it is an embedded energy source as the
technologies around it rely heavily on its availability. It provides us with petroleum for
vehicles; the base power for global transport. In this study oil is viewed with the perspective of
being manufactured into diesel which is used at SA’s open cycle gas turbine (OCGT) power
stations that are mostly used to provide grid stability. Currently there is 2.1GW of OCGT
stations in SA that run off diesel and 670MW in construction (Eskom, 2015a).
Getting oil to consumers is expensive. It is estimated that over three quarters of all investment
spend in this industry is involved in the transportation of oil. This is a clear inhibitor to the
price and even the consumption of oil, especially for those countries that have to import it from
different regions (International Energy Agency, 2014b) such as SA. The refining industry is in
part to blame for these rises in costs, especially since the global financial crisis where many
refineries were closed due to not being able to operate at fair margins. The result is a shift in
refining to many non-OECD (organisation for economic cooperation and development)
countries, making it truly globalised and leaving many markets highly dependent on imports.
Large scale imports provide an opportunity for other technologies to fill the gap against the
GHG producing oil technologies.
The petrochemical industry is mainly represented by Sasol which is the world’s largest coal-
to-chemicals producer. Sasol uses the Fisher-Tropsch process whereby liquid fuels are
produced using natural gas and coal. This programme was implemented in the 1950’s as an
attempt to secure SA’s supply of liquid fuels which became even more prevalent in the times
of sanctions during the Apartheid era (Eyetwa et al., 2010). SA has very small oil reserves
hence the need for previous state-owned Sasol. SA is able to meet about 36% of its fuel demand
with synthetic fuels made in the gas/coal-to-liquids process (Department of Energy, 2015c).
The rest is imported crude oil that is refined locally at a host of refineries; Sapref, Natref, Enref,
Calref, Secunda and PetroSA (Mosgas).
3.3.3.6 Coal
Coal is the main source for global electricity generation. This is due to it being cheap and
readily available locally in many regions of the world. It is more abundant than oil and gas and
its history can be traced back thousands of years (Letcher, 2014). It made its mark during the
industrial revolution where it became the fuel of choice in machines and engines that ran off
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steam turbines. The technology progressed into large-scale electricity production and already
has surpassed oil in metric tonnes of consumption but due to its lower density it still does not
provide more energy to the global market than oil. This however is changing with the rise of
emerging markets such as India and China (International Energy Agency, 2015b). The world’s
largest steam coal production nations can be seen in Table 3 below. This table indicates the
significance of the developing world and its insatiable appetite for coal that is used in
generating electricity. South Africa is not far down the list.
Table 3: Major steam coal producers (million tonnes)
Source: (International Energy Agency, 2015b)
With emerging markets leading the way in production and consumption it is no surprise that
this demand is expected to grow. The IEA expects that coal demand for electricity production
will grow in every region of the world with the exception of the United States, due to the rapid
increase in non-conventional shale gas (International Energy Agency, 2015b). Coal
unfortunately has the highest carbon dioxide footprint as compared to other combustion
technologies, it also when burned, has trace metals that can be volatised increasing pollution
and adding to its negative perception (Letcher, 2014). Combined as a major GHG producer and
polluter you can see that the world needs cleaner burning coal technology as we are not able to
simply walk away from coal as an energy source. Fortunately there are options for clean coal
technologies (CCT) which are realisable and can be improved on, these are the removing of
sulphur, nitrogen and trace metals before it is burned which will reduce pollution and make it
more efficient (Letcher, 2014). Improvements in the methods used in burning various types of
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coals based on rank (hardness) and moisture have been successful and need to be encouraged
further.
As an entrenched technology it does face challenges such as rising mining, processing and
transportation costs along with increased environmental regulations, but if CCT and other
complimentary technologies such as CCS evolve, then coal should have a future with less of a
negative perception.
The South African energy sector is largely dominated by coal. Up to 77% of SA’s primary
energy needs are provided by coal (Department of Energy, 2015a) of which it supplies 93% of
all electricity production. Currently many of the country’s coal deposits can be exploited at
extremely favourable costs which makes it the fourth largest coal exporter in the world. SA’s
coal production is largely embedded in a number of local industries, 62% is used for electricity
production, 23% for the petrochemical industry, 8% is used in general industry and 4% used in
the steel industry (Department of Energy, 2015a). These statistics already speak volumes for
the state of SA in terms of its energy supply as it is stated by Menyah and Wolde-Rufael (2010)
“South Africa is confronted with the crucial issue of producing more coal to meet its energy
requirements, while at the same time grappling with the issue of reducing greenhouse gas
(GHG) emissions”.
3.3.3.7 Gas
Electricity generation is the largest energy user in the world and most of it is produced using
coal and gas. Gas is seen as the medium term transition solution in an effort to reduce the use
of dirty coal. Any intensification of environmental policy should be broadly beneficial for gas
and as the price gap between gas and coal has narrowed, its demand has increased. In the
medium term gas report (International Energy Agency, 2015a), gas demand is expected to re-
accelerate following its slump of 2013-2014 and the growth rate to 2020 is estimated to be at
2% per year. Natural gas does have certain barriers which have historically made it more
expensive, this is due to its lack of availability and proximity to markets. Developing gas-
producing infrastructure is therefore expensive and considering that most natural gas is
methane (a GHG) has also inhibited its production under environmental policies. Currently the
capital-intensive nature has caused many gas projects to be put on hold due to the current prices
of gas not being able to cover the capital costs but fracking has created an unparalleled
resilience to this in the USA.
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Most conventional gas known as free gas is normally trapped in small porous pockets which
adds to the cost of extraction due to the lower volumes gained as compared to capital
investment. This environment is changing through the use of new techniques known as
fracking. Fracking is bringing the location of gas production much closer to its markets. It is
the hydraulic fracturing of low permeable rock formations in order to create cracks and gaps
for the gas to flow towards the production well (Letcher, 2014). These formations are normally
in much larger volumes but do present an environmental hazard as gasses can flow into
groundwater reserves. Professor Phillip Lloyd of the energy institute at the Cape Peninsula
University of Technology doesn’t foresee any hazard. He claims that in over one million holes
that have been stimulated hydraulically in the past 20 years there has been one documented
leak which caused minimal damage due to the drillers stopping pumping immediately. They
stopped pumping because if there is a leak there is no high pressure to create the gaps for the
gas to flow (Lloyd, 2015). Hence it is in drillers interests to not have any leaks.
SA has small gas reserves. The gas fields that are being exploited are off the coast of Mossel
bay. The gas is piped to Mosgas (PetroSA) where a host of products are produced including
petroleum. As for Sasol, it has a much larger gas network where it runs an 865km pipeline from
the Temane and Pande gas fields in Mozambique. The gas is piped to Secunda where it is either
used to produce liquid fuel and other chemicals or is piped to gas users in the greater
Johannesburg metropolitan area (Sasol, 2015). Shale gas in the Karoo of SA probably poses
the greatest opportunity for SA to secure its energy supplies as most of South Africa’s OCGT
can be converted from using diesel to natural gas. The size of this resource is unknown but it
is said to be vast. If it is as big as hoped it will prompt large scale investment in this technology
to supply power. The only issue that surrounds it is that it requires horizontal drilling and
fracturing of the subsurface in order to release the methane embedded below. Some have
indicated that this poses environmental concerns such as scarring the local landscape and
possibly chemically polluting the regions’ limited underground water reserves (De Wit, 2011).
3.3.3.8 Nuclear
Nuclear power is probably the most controversial energy source. Its association with weapons
and radioactive waste has portrayed it to be a villain in the arsenal of energy production. Yet
due to the clean nature of its emissions its role in reducing GHG is vital. The 2°C scenario
(2DS) is a scenario where the global energy system is able to move towards an 80% chance of
limiting global average temperatures rising by 2°C. Nuclear is said to be key in helping achieve
this as it is a proven clean technology with secure supply. The figures state that the accumulated
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power generated from nuclear would have to be more than double than what it is in order to
avoid the 2DS (396 GW to 930 GW) (International Energy Agency, 2015c) (see Figure 11
below). Nuclear energy has recently taken a dip due to the recent Fukushima disaster as well
as the financial crisis putting a halt on these capital-intensive projects. However in the medium
term it should see a revival because as of the beginning of 2014 there were 72 reactors under
construction. Being a mature low-carbon energy, room for technological growth and
opportunity may lie in small modular reactors that supply isolated markets and avoid the capital
intensive nature of the technology (International Energy Agency, 2015c).
Figure 11: Grid connection rates and the required rates to reach the 2DS targets
Source: (International Energy Agency, 2015c)
Nuclear energy also has proven itself to be a long term solution. More than 70% of operating
reactors in the USA have been granted 20 year extension licenses allowing them to operate up
to 60 years. Europe has granted extension licenses for another 10 years making these plants
very economical. Safety as always is a critical factor when doing this and licenses are granted
provided regular upgrades are performed on these plants (International Energy Agency, 2015c).
Some greater safety issues that involve the day to day running is the nuclear waste generated.
Since the plants run for such long times waste is accumulated over two generations and it is
important to not burden future society with poor plans for effective and safe disposal (Letcher,
2014). One way this can be reduced is by developing and selecting reactor technologies to
actually reduce the radiotoxicity of nuclear waste by exhausting the fuel through a closed fuel
cycle. The Liquid Metal fast cooled reactor (LMFR) is said to have this capability (Letcher,
2014). In the nuclear road mapping report of 2015 (International Energy Agency, 2015c) it is
said that a lead-cooled fast reactor (LFR) known as a generation IV nuclear system is a type of
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LMFR which can produce 60 or more times the energy than other reactors by multi-recycling
the fuel, resulting in improved waste management.
Part of the large scale centralised energy network in SA is the Koeberg nuclear power station
which has a capacity of 1800MW, this constitutes less than 2% of SA’s energy supply (Eskom,
2015c) and 6% of electricity supply (Department of Energy, 2015b). Koeberg has been the
most secure power station for supply and has in the recent past been vital for grid stability in
the Cape. The success of the Koeberg station in terms of safety and reliability has prompted
the DoE to further pursue and build up SA’s nuclear power supply. This has been opted for in
response to the failing of the supposedly reliable coal-fired power stations to meet the current
demand. It also presents an opportunity for cleaner energy. SA has vast supplies of uranium
making it an attractive market to install greater nuclear capacity (Department of Energy,
2015b). The plan is to install a nuclear capacity of 9600MW by 2030 which would inexplicably
change the energy supply landscape.
3.3.4 Technology analysis in the context of competitiveness
Secure and Continuous Supply
Competitiveness in technologies is difficult to assess given the volatile environment and the
fast moving rate of technological change. This ultimately makes it hard to pinpoint which
energy technology is the best. They will all have varying constraints in different environments
and markets around the world. These constraints can be skills, finances and obviously
resources. Solar would not be competitive in places like the United Kingdom but wind is more
likely to perform better. A better way to measure the competitiveness of energy technologies
is to assess their ability to provide a secure and continuous supply in their respective markets.
A discussion below is intended to clarify the elements of a secure and continuous supply.
Before any institution begins to plan for an energy system it is of utmost importance to
determine the security of supply for an extended period of time so that the investment is
warranted. Historically a centralised energy supply system was perceived to be more efficient,
secure and economic (Haeseldonckx & D’haeseleer, 2008). This security of supply produced
a more continuous supply allowing easier management (and management of costs) of the
centralised grid. Droste-Franke et al. (2009) state that for a safe and secure energy supply the
technology used in generating power must have dynamic stability and be socially robust.
Dynamic stability applies to secure and continuous supply as it encompasses two notions.
Firstly an energy supply system must be robust “i.e., stable against adverse impacts from the
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outside including natural fluctuations, changes in demand, and technological innovations” and
secondly “opportuneness should be ensured, which means the ability to take advantage of
unexpected, fortunate developments in the technological or socio-political realm” (Droste-
Franke et al., 2009, p. xxiii). Some energy technologies cannot fulfil the needs of having
complete dynamic stability on their own due to a lack in either its hardware, software or
orgware. But if an energy supply system is well planned and multiple sources of power
technologies are utilised then this diversification enables an increased level of dynamic
stability. It is important to pursue technologies that may not be entirely dynamically stable on
their own but have the ability to fit in with other technologies and work with them. The
importance of dynamic stability is highlighted by the studies of Wang, Yu and Chen (2011)
where the main challenges of wind power are known to be intermittency and energy storage
(hardware). Their attempt to integrate energy storage systems in a wind farm via a flywheel
and batteries indicate the need to make a decentralised isolated renewable energy system
robust, yet this option has not proved widely successful yet.
In contrast to the worries of the level of robustness posed by Wang et al. (2011) with regards
to certain renewable energies. Eberhard (2013, p. 1) aptly named a report about secure and
sustainable electricity supply as the “The folly of big coal, big nuclear and big networks”. His
argument is based specifically around the South African context where weaknesses in large
centralised networks have been exposed impeding the security of supply. Some weaknesses
include factors up the chain of supply such as the volatility in the coal mining industry and this
effect on a system to provide secure and continuous energy. Allan et al. (2015) supports the
idea that renewable distributed generation systems can be more secure. Several reasons include;
distributed generation technologies are located closer to the demand source and because they
can be stand alone or grid connected. They produce smaller amounts of energy and the
operational capacity is matched to the demand more easily, providing ‘useful’ energy. There is
less waste as the transportation of electricity via a grid over long distances is eliminated.
Overall as a whole, the system is more flexible. It is also believed that a community-based
energy supply system will result in greater awareness about energy consumption, hence it could
lead to more efficient use on part of the consumers. The problem noted by Bouffard and
Kirschen (2008) is that historically over the last half century centrally structured systems have
been quite successful in providing consumers with a reliable flow of energy. Consumers have
become inflexible due to society and the economy being blissfully maintained, rendering them
unaware of the impact of their energy use. In order for flexible networks to become the norm
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it is agreed that society needs to move toward an active demand side. Having an active demand
requires community involvement which is enabled by more distributed sources of energy
supply such as renewables. See Figure 12 below for an example of a centralised network and
a distributed generative network, the power flows as indicated by the thickness of the lines
indicate the increased level of flexibility provided by a distributed generative network.
Figure 12: (a) Conventional electricity distribution network. (b) Electricity distribution
network with distributed generation
Source: (Allan et al., 2015)
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3.3.5 Evaluation of opportunities and threats associated with technological development
Social Acceptance: An Opportunity and Threat
Social acceptance is identified by Gudanowska (2014) as a major part of strategic research that
should go into the analysis of technologies so that the potential consequences are properly
addressed and problems solved prior to the installation of technologies. Understanding that
today’s environment in which technologies operate often involve people with the ability to
adopt or reject them. Gaining social acceptance creates further opportunities for technology
diffusion and failing to do so can rapidly halt it. Essentially it is a barrier to large-scale
deployment which, if managed properly, presents great opportunity.
It is therefore necessary, when assessing the future energy needs of the world, to understand
the impact that new and existing technologies may have on the environment and the effect this
will have on people living in those environments. Ultimately it is the responsibility of those
installing these technologies to ensure that all stakeholders concerned are okay with the
impacts. Yet more often than not there is always a party that is required to be satisfied to a
greater extent in terms of accepting new projects and passing new technologies for
development. Gross (2007, p. 2728) explains this concept as “NIMBYism” (not-in-my-
backyard syndrome). This phrase is frequently used to describe a community that is opposed
to local infrastructure projects that purportedly have a greater social good. Renewable energy
technologies as discussed earlier tend to be more on-site, larger in size and closer to a
community therefore raising the specific social costs. In the case of wind energy, the
construction of large wind turbines have a visual and noise impact on the landscape. In
Germany, the country with the most installed wind turbines, it has been recognised that social
acceptance may be the biggest opposing factor to renewable energies (Wustenhagen, Wolsink,
& Burer, 2007). Social acceptance can be conceptualised into 3 categories; Socio-political
acceptance, community acceptance and market acceptance (Wustenhagen et al., 2007) (See
Figure 13 below). To understand these three spheres of society it is important to understand
that siting decisions is the crux of controversy in building renewables. Often the general public
(market) support the idea of renewables leading governments (socio-political) to believe that
acceptance will be high yet local communities in the vicinity of these projects almost always
have concerns (Bell, Gray, & Haggett, 2005). One of the reasons for concerns is due to the
level of trust a community has with the authorities involved with a project. Huijts, Midden and
Meijnders (2007) found that in a study surrounding carbon capture and storage technologies,
NGO’s (Non-Governmental organisations) were found to be trusted the most and state industry
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the least. This is of particular concern when NGO’s are less able to invest the large sums of
money in new technologies as the state possibly could. In an article by Dumane (2015) a point
is made that state energy companies (mostly state-run) are pulling back their investments in
clean technologies due to the long term investment horizons and a void has been created and
is being filled by wealthy individuals and venture capitalists. The length of investment is further
exacerbated in renewable energy projects as such projects are often located in environmentally-
sensitive areas and land-use for large wind and solar plants can be quite extensive. Furthermore,
large scale grid extensions are often required as locations are far from existing infrastructure
(The World Bank, 2013) causing a bit of disparity in the needs of private developers and the
supply of grid infrastructure which is often state-run. Both these two points make acceptance
of projects significantly tougher on more than one level.
Figure 13: The triangle for social acceptance of renewable energy innovation
Source: (Wustenhagen et al., 2007)
With regards to non-renewable energy sources one of the fossil-fuels that comes with a
significant benefit is nuclear power. Nuclear Power exhibits negligible emission levels for
greenhouse gases during power generation (Dones, Heck, & Hirschberg, 2003). The problem
is that many countries remain ambivalent on the issue of pursuing nuclear power as nuclear
meltdowns such as Chernobyl and Fukushima showed us the dangers of nuclear, let alone the
waste disposal issue. To create a socially accepted nuclear power plant, it is important to focus
on the perceived climate change and secure supply benefit that nuclear energy provides
(Visschers, Keller, & Siegrist, 2011). Contrastingly sources of energy such as oil and coal emit
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much higher levels of carbon dioxide adding to the greenhouse gasses that are causing worries
for climate change. The social acceptance of oil and coal technologies is often overridden by
socio-political forces due to their readiness and the modern world infrastructure already geared
to these forms of energy, let alone their competitive costs. It is believed that shale drilling,
considered an unconventional oil production method, is now 50% more efficient than it was in
2014 (Treadgold, 2015). This increases social acceptance of fossil fuels to the market purely
from a price point of view and should do the same for the socio-political forces but drilling for
anything always raises attention and there will most likely be factions of the community that
may cause a stir.
Path Dependency and the Minerals-Energy Complex
In SA, it is clear by looking at its current infrastructure that certain socio-political factors
dominated policymaking of the past. These past policies pose a massive threat to the
development of new energy technologies in SA. Those policy makers were heavily influenced
by the autocratic government that was in charge during the time. They were further bolstered
by the sanctions imposed during apartheid. The apartheid regime required “energy autarky”
and this therefore “reinforced the nature-induced coal path.” (Scholvin, 2014, p. 186). This coal
path is explained by the ‘minerals-energy complex’ developed by Fine and Rustomjee (1996)
in their study of the political economy of SA. The concept was developed on the evidence that
showed very close ties between certain sectors of the South African economy. These sectors
included mining, energy and the manufacturing sector which serviced them (Fine & Rustomjee,
1996). It was based initially on mining and then on the beneficiation which followed, this
created some of the cheapest electricity in the world (Winkler & Marquand, 2009). It was a
system of accumulation. (IIPPE, 2015). Cheap electricity followed allowing industry to
flourish and so the financial services sector began to grow and served as a conveyor belt linking
the aforementioned sectors. Due to the power of this complex in the South African economy it
began to be dominated by six conglomerates known as the six capital axes because of their
simultaneous control of the mining, manufacturing and financial sectors (Fine & Rustomjee,
1996). The six axes are shown in the figure below and were at their peak of power in the
1980’s/1990’s.
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Figure 14: The Six Capital Axes
Source: (Fine & Rustomjee, 1996, p. 108)
Eskom ended up with significant overcapacity which caused the electricity prices in the late
1980’s and 1990’s to be amongst the cheapest in the world (Eberhard, Leigland, & Kolker,
2014). This prompted no-new builds for almost 20 years since the commissioning of the Kendal
power station in 1988 (Scholvin, 2014). The energy policy that has then followed in SA has
seemed to follow this complex and has created path-dependent outcomes. The definition of
path dependence is:
The idea that decisions we are faced with depend on past knowledge trajectory and
decisions made, and are thus limited by the current competence base. In other words,
history matters for current decision-making situations and has a strong influence on
strategic planning. Competences that have been built in the past define the option range
for today’s moves. New business opportunities, in particular those based on
technological progress, emerge gradually as a consequence of competencies acquired
prior to new discoveries and over time (Financial Times, 2015).
Scholvin (2014) describes SA’s path dependency as something that is extremely difficult to
alter at a later point in time because it has large infrastructure in pre-determined geographical
spaces as a result of past energy policies which were based on the abundant coal resources.
Changing the landscape of the South African energy space and therefore meeting shortages in
supply requires policy changes. It also requires new policies altogether. This needs to
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encompass managing the expansion of coal, regional cooperation on gas reserves
(Mozambique) and hydropower (Democratic Republic of Congo), a nuclear build- up
programme and renewable energy development to achieve energy security (Scholvin, 2014).
3.3.6 A vision of future technological trends
Decentralised and Centralised energy supply systems
The current trend in the energy sector is seeing the continued investment in fossil fuels but with
rising interest and investment in green technologies due to global environmental policies being
enacted. As a result of this, renewables are being added to grids but depending on scale and
location they also operate in isolation. This decentralisation is a new trend that has become
associated with renewable technologies. A discussion on decentralised and centralised energy
supply systems follows.
Building an energy supply system requires intense planning as to what type of system is to be
installed. This analyses has become increasingly important since the advent of commercial
alternative energies. Alternative energies are being introduced as a means of reducing the
carbon dioxide emissions. According to Droste-Franke et al (2009) a substantial change in
many of the world’s current energy systems will see a move from a centralised energy structure
to a more decentralised structure. Furthermore it is highlighted by Gullí (2006) that the world
is already seeing restructuring and privatisation of the electricity and gas industries where
traditional large firms are being abandoned. An example of this, is the policy that has been
adopted by the UK, the UK climate change Act, which is legally binding and stipulates an 80%
reduction in greenhouse gas emissions by 2050 as compared to 1990 levels (Chmutina,
Wiersma, Goodier, & Devine-wright, 2014). One of the avenues for reducing emissions is via
a decentralised energy system. Decentralised energy systems are not only driven by societies
attempt to reduce emissions but by societies attempts to be more politically, socially and
economically innovative (Chmutina & Goodier, 2014). Distributed generation means that a
more diverse mix of energy sources is included such as renewables in order to have a more
secure supply. How can distributed generation be more secure? One of the arguing factors is
due to the locality of power generation. Smaller power technologies are beginning to perform
better than ever before and are generally located closer to the point of consumption (Chmutina
& Goodier, 2014). This locality reduces waste, making it more secure and more suited in supply
of becoming ‘useful energy’ (Droste-Franke et al., 2009). Feizollahi, Costley, Ahmed and
Grijalva (2015) state that decentralised systems are a compelling alternative to centralised
systems, one of the reasons for this is due to the software systems being able to manage smaller
31 | P a g e
problems more effectively. The level of decentralisation will affect the technology and software
employed. Energy supply systems have been categorised by Regina de Casas Castro Marins
(2014) as regional, district and building-scale. Regional systems are high capacity systems
which include large-scale power plants with big hardware requirements and are classified as
centralised. These have been traditionally the energy supply system of choice across the world
and according to Bouffard and Kirschen (2008) are more vulnerable due to disturbances in the
supply chain, additionally they are beginning to be seen as less popular due to other aggravating
factors such as their dependence on fossil fuels. District systems are located close to the urban
environment and building-scale are located within the urban environment. These systems are
far more decentralised and are required to be extremely efficient to remain competitive due to
their lower capacity.
Planning is essential in the design of decentralised systems as the level of ‘useful energy’
(Droste-Franke et al., 2009) must be determined so that there is limited waste and spend on
overcapacity. As stated by Regina de Casas Castro Marins (2014, p. 136) “the installed capacity
(CIE) is designed according to the total electricity (CE) required in the buildings, and the
rejected heat is assumed to meet the heating and cooling demand via a district heating network.”
On the point of heat, it is important to realise the diversity of possible decentralised systems.
Not all systems may be required to produce electricity as stated, “The primary electrical
renewable technologies for on-site use are photovoltaics, wind and hydro” (Wolfe, 2008, p.
4510). Different energies can be used with the sole purpose of producing energy/heat such as
the use of biological processes in converting biomass. This once again highlights the role of
identifying what is the ‘useful energy’ required at the point of consumption when determining
the type of decentralised/microgeneration system.
Centralised systems were originally developed on the basis of fossil fuels as the source of
energy. Hence the locations of the large-scale plants being placed close in proximity to the
resource (Droste-Franke et al., 2009). Extensive grid networks are then required to transport
the power to places of consumption. This is how the South African power system is designed,
“large power stations that are concentrated in the interior of the country near the mines and
industries of Gauteng province, and long transmission lines down to coastal areas.” (Eberhard
et al., 2014). Allan, Eromenko, Gilmartin, Kockar and McGregor (2015) claim that 6.5% of
generated electricity is lost when distributed to consumers causing costs to rise. The need for
more infrastructure is also costly and so the case is made for placing power supply closer to
the point of use. Those that fall into places where there is limited demand may cause the
32 | P a g e
economic distance limit (EDL) of grid extension to be reached. The EDL is compared to the
life cycle cost (LCC) of an alternative energy and if the LCC is cheaper, a case can be made
for investing in a micro-generative alternative energy source (Mahapatra & Dasappa, 2012).
The challenge for existing centralised infrastructure is its need to adapt not in isolation of the
new sources of energy but to allow feed-in. It is expected that initially decentralised units will
be installed in isolation but as these alternative forms of energy become more efficient and
create an excess supply, producers will be looking to existing networks to dispatch this power.
Existing networks are primarily centralised and the production of on-site energy will have new
requirements on centralised networks such as software systems to manage the flow of
electricity both ways and the hardware infrastructure to support such a design. Wolfe (2008)
states that stability management in decentralised networks will be the biggest issue as size and
direction of power flows will be less predictable. See Figure 12 for an example of a
conventional electricity distribution network and an electricity distribution network with
distributed generation.
3.3.7 Identification of actions supporting the development of desired technologies
Desired technologies would almost entirely be those that are low carbon dioxide-emitting
whilst able to provide secure and sustainable energy. As explained earlier each of the
technologies in this study warrant clear benefits as well as disadvantages, none of them are
sufficient enough in their own capacity to provide a competitive and sustainable solution. This
has been realised by many governments and international organisations around the world.
Based on that conclusion policies have been ushered in to introduce cleaner, safer and more
secure whole energy supply systems. Policymakers have realised that renewables can achieve
a number of goals beyond energy security and environmental well-being. These include
reducing the health effects of burning dirty fossil fuels and creating opportunities for education,
jobs and rural economic development. This positive thinking is shown in Figure 15 below
where a staggering large amount of countries (138) had renewable energy support policies in
place by 2014 (Renewable Energy Policy Network for the 21st Century, 2014).
33 | P a g e
Figure 15: Countries with renewable energy policies, early 2014
Source: (Renewable Energy Policy Network for the 21st Century, 2014)
Policies can also only do so much. At the end of 2013, eight out of twelve countries that had
renewable energy targets failed to meet their targets by year’s end (Renewable Energy Policy
Network for the 21st Century, 2014). One of the reasons for this is usually due to financing
issues. This however is not exclusive to renewable energy policies. In cases where there is
finance available for fossil fuel projects deadlines are also missed. This is because energy
investments in general are subject to lengthy processes; delays are most likely in cases where
projects involve areas that are socially and environmentally sensitive (International Energy
Agency, 2014c). The messages received from the public all over the world are in abundance
and often conflicting. In the case of renewables there has been a backlash against the cost of
subsidies to renewables as well as the multiple cases of “NIMBYism”. In the case of other
energy technologies there are numerous activists that are opposed to fracking, nuclear, CCS
scepticism and even coal-fired plants. This has caused a lot of back and forth for policy makers
who are the first step in implementing the development of desired technologies.
The renewable energy sector in SA is young but vibrant. The National Development Plan
(NDP) has proposed to build up the country’s renewable energy supply to account for 9% of
its electricity supply by 2030 (WWF, 2015). This was launched in 2011 under the Renewable
Energy Independent Power Producer Procurement Programme (REIPPPP) by the Department
of Energy. The programme is a tender process consisting of rounds where the most competitive
bids are awarded a 20 year power purchase agreement with Eskom. The National Treasury has
34 | P a g e
fully underwritten the power purchase agreements. The bids involve solar, wind, hydro and
other small-scale renewable technologies that will be fed into the national grid (Boulle,
Cuncliffe, & Boyd, 2015). This programme has been identified as a key action that supports
the development of desired technologies. The plan is to rollout 17 800MW up to the year 2030
and so far already 1500MW has come online in over 32 different projects (Creamer, 2015).
These projects are spread over a variety of technologies with the bulk going towards wind,
solar, hydro and biomass as seen in the table below.
Table 4: Summarised results for REIPPPP Windows 1, 2 and 3
Window 1 Wind PV CSP Hydro Biomass Biogas Landfill Total
Capacity
offered (MW)
1850 1450 200 75 12.5 12.5 25 3625
Capacity
awarded
(MW)
634 631.5 150 0 0 0 0 1415.5
Total
investment
(ZAR mill)
13312 23115 11365 0 0 0 0 47792
Window 2
Capacity
offered (MW)
650 450 50 75 12.5 12.5 25 1275
Capacity
awarded
(MW)
562.5 417.1 5 14.3 0 0 0 1043.9
Total
investment
(ZAR mill)
10897 12048 4483 631 0 0 0 28059
Window 3
Capacity
offered (MW)
654 401 200 121 60 12 25 1473
Capacity
awarded
(MW)
787 435 200 0 16 0 18 1456
Total
investment
(ZAR mill)
16969 8145 17949 0 1061 0 288 120263
Source: (Eberhard et al., 2014)
35 | P a g e
4. CONCLUSION
Technology development is of great significance and is a major driver in any economy. A lot
of time is spent innovating and inventing so that one day a product can be put out into the
market which not only does great for itself but is hugely beneficial for its environment. These
benefits are enablers to the economy and can help spur on the development in fields completely
unrelated. It is no wonder why such large investments are made in research and development
by many governments as it can, and often does, yield great results for the economy at large.
Research and development does not always have the capitalist intent at heart, it can be driven
by pressing needs that are facing society. In this context the pressing need is the threat of our
finite resources not meeting the energy demands of the future and the current use of them
emitting carbon dioxide which could cause drastic climate change. Finding global solutions to
these problems encompasses an array of factors and in order to determine the direction
organisations and countries should take in addressing these problems foresight studies must be
done. More importantly, country-specific foresight needs to be done. In this case the solution
lies in energy technologies, yet knowing which one or which array can help us requires intense
investigation. These investigations need to delve deep into the current state of technologies and
then determine what their trajectory for development can be within a specific context.
Understanding the mix of technologies available, their opportunity for improvement and ability
for viable adoption can provide the powers that be with the knowledge to make the right choices
in energy technology decisions. We have mature fossil fuel and nuclear technologies which, as
explained, have large room for improvement through improved efficiencies, cleaner burning
processes and exploring CCS. These technologies are vital to modern day man and without
them the opportunity for development in other technologies would not be possible. The
software and orgware of fossil-fuelled technologies are deeply embedded in the hardware
which are widely used due to their ability to provide base load power. Base load power has to
be secure and continuous but the technologies that can supply this have waning social
acceptance levels due to their emissions. These technologies are also largely centralised due to
the ability of their established strong hardware element. The decreasing levels of social
acceptance and the green policies coming through have opened the door for renewables which
can provide both centralised and decentralised power. The security of supply is however
impeding their growth as all three elements of these technologies are fairly new (except in the
case of hydro). This makes it harder for them to breakthrough in economies that are energy
hungry. The market acceptance however is generally high and so there is a strong need to map
36 | P a g e
the future of these technologies alongside their fossil fuel counterparts so that the correct levels
of attention in research & development and investment flows toward them.
37 | P a g e
5. RESEARCH METHODOLOGY
5.1 Research Approach and Strategy
The aim of this research is to determine the trajectory of current energy technologies in SA and
what sort of presence they will have 20 to 30 years from now. The research is qualitative
inductive and descriptive-predictive in nature. It therefore aims to reach a result based on
theoretical insights (Bryman & Bell, 2007). Reaching a result requires inductive reasoning
whereby there are no assumptions and only observations, conclusions are then drawn from the
observations (Leedy & Ormond, 2010).
Initially the research takes on a descriptive approach as all the research propositions were
developed from existing literature and reports. According to Cooper and Schindler (1998)
descriptive research is applied to determine the reality of a topic through the formation of
hypotheses about the existence of a variable. Since the study is foresight oriented, the research
propositions that were formulated are then used in a predictive way. According to Adams,
Khan, Raeside and White (2007, p. 21) predictive research “is an attempt not only to explain
behaviour but to predict future behaviour given a change in any of the explanatory variables
relevant to a particular phenomenon.” They then further explain that if we are able to
understand physical or human phenomena, we will end up being in a much better position to
predict future paths, this type of research is very important to governments in the design and
application of policy. It is clear that this approach fits well with the proposed research topic as
energy is a key aspect of market-wide planning that has to be done at the national levels.
A common technique specifically used in foresight studies is the Delphi method. Certain
aspects of the Delphi method have been implemented in this research. Following is a concise
explanation of the Delphi method; The Delphi method is particularly used in matters
concerning science and technology that should be achieved in the future (Martin G. Moehrle
et al., 2013). The Delphi method was first successfully used in 1971 by the Japanese and has
been conducted every five years since then. The forecast of the fax machine is one such
example of success using the Delphi method. Cuhls states:
The basic idea of a Delphi survey is to interview experts on a set of topics (the case
presented here deals with major discoveries, technical innovations or a large diffusion
of technologies). The set of topics can be generated by the experts themselves or from
elsewhere. The aim is not only to collect the rough opinions of experts on certain future-
38 | P a g e
oriented topics, but also to get each expert to react to the general opinion of his peers
(2001, p. 555).
Kanama (2013, p. 154) confirms the proposed timeline for predictions as well as the use of
experts in this study, “The Delphi method usually forecasts technology trends in 20–30 years’
time. Normally, the only source that can be relied on for making a forecast for such a long-
term span is said to be the opinions of specialists in each field”. For this study the aspects of
the Delphi method used were:
 The use of experts in the fields of various energy technologies.
 The set of topics were generated through the themes of the literature review.
 Forecasting of 20-30 years from now.
Another method of doing research in technology foresight is roadmapping. Roadmapping is:
The creation of a roadmap begins from the establishment of the concept. The issues are
gradually broken down and linked to the element technology topics necessary to achieve
the projected timing of realization of a technology (Kanama, 2013, p. 158).
There are 3 major reasons for performing technology roadmapping (Kanama, 2013, p. 156):
 “First, because of the rapid increase in technological complexity and diversification of
market needs, it has become necessary to grasp technological trends and market needs
strategically based on technology foresight”
 “Second, due to the increasing complexity of technology in recent years, it is more
difficult to conduct all R&D in only one company or one country”
 “Third, recent global competition in creating innovation now requires clear cost-
effectiveness in R&D investments”
The roadmapping method is more qualitative than quantitative, while the Delphi method uses
statistical techniques to quantify forecasts. The roadmap is able to predict technological
difficulty and global competitiveness of each element but it is difficult to measure empirically
and quantitatively whereas the Delphi can. Kanama therefore states:
The accuracy of the results depends on the scale of the survey and the number of
respondents. However, with Delphi results, it is difficult to grasp the connection of the
technological topics or the future vision of the society that those technologies will create
(2013, p. 159).
39 | P a g e
Roadmapping therefore requires semi-structured interviews to obtain the qualitative data such
as “R&D targets, an image of society, a vision of the future, and concepts.” (Kanama, 2013, p.
158).
For this study an integration of the Delphi technique along with roadmapping was done so that
a fuller picture could be achieved. Kanama (2013) suggests that such an integration is possible
and more accurate as long as technology foresight takes advantage of the strengths of both
methods.
5.2 Research Design, Data Collection Methods and Research Instruments
Unfortunately for this study the possibility of obtaining surveys from thousands of experts was
limited due to resources and time. Instead a handful of energy technology experts were selected
and certain aspects of the Delphi method were applied along with the roadmapping technique
which involved the semi-structured interview. Interviews were conducted individually and
interviewees were sent the interview guide with its outline of questions prior to the actual
interview so that they could prepare their answers accordingly. This enabled the participants to
prepare which allowed the discussion to be more direct and focused on the topics that are of
interest and relevance to the research report. All interviews were recorded so that they could
be fully transcribed and then coded. Designing a questionnaire guide required looking at
aspects of the Delphi and roadmapping techniques and replicating what was possible within
the limitations of the study.
Aspects of the Delphi technique are explained; According to Ludwig (1997) participants in a
Delphi agree to receive and respond to a series of questionnaires, usually at least three different
rounds are used. The rounds are used to so that a level of consensus is able to be achieved. Due
to limitations in this study a real Delphi could not be undergone but using the semi-structured
interview technique allowed a dialogue where the researcher could direct the participants
towards a level of consensus which is representative in the Delphi technique.
Designing a semi-structured interview guide requires an understanding of this research
instrument. Adams et al. (2007) states that in a semi-structured interview there is a ‘road-map’
of questions to be asked which guides the interview but allows further probing questions to
gather rich data. These probing questions were the tools for directing participants towards a
level of consensus. This consensus was reached just as in the Delphi method. Ensuring the
correct qualitative data was derived that enabled the roadmapping aspect of this research, four
40 | P a g e
criteria provided by Merton and Kendall (1946) as cited in Flick (2011, p. 112) were used in
the formulation of the interview guide :
 Non-direction in relation with the interviewee
 Specificity of the views and definition of the situation from their point of view
 Covering a broad range of meanings of the issue
 The depth and personal context shown by the interviewee
The first point was followed initially so that a simple dialogue began. These questions are there
to initiate dialogue (Flick, 2011). The second point was carried out by not having a list of
possible answers but rather allowing the participants to freely give their own point of view on
defined situations. The participants were then probed on topics once a broad range of meanings
of the issue in the question were covered. The probing also included looking for depth and
insight in personal context/experience so that topics such as; “R&D targets, an image of
society, a vision of the future, and concepts” (Kanama, 2013, p. 158) that normally cannot be
covered empirically are properly addressed. These questions were then asked in a way
assuming there is an inter-relationship between the themes of research. This prompting of
participants enabled them to be more direct in their answers, further enhancing the quality and
richness of the data. The reason for doing this was to mitigate biases from using a small sample
of semi-structured interviews for data collection.
5.3 Sampling
The sample method that was used was the purposive method. A non-probability sample was
chosen according to certain criteria. The criteria was set by the judgement sampling technique
(Adams et al., 2007). This technique ensured that participants were selected based on their
attributes. According to Ludwig (1997) randomly selecting participants is not acceptable.
Instead for this research, accreditation, experience and qualifications were identified so that an
adequate nomination process was used to select participants who are then deemed experts in
the energies sector. Six industry experts were selected for this study:
41 | P a g e
Table 5: Participants interviewed
Participant Qualification Position Expertise Experience
(years)
Reference
key with
Atlas.ti
1
29/10/2015
MPhil Energy and
Development Studies,
Energy Research Centre,
University of Cape
Town (2013), BSc and
BSc Honours,
Geography, Rhodes
University (2007 & 8)
Researcher at the
Energy Research
Centre: Energy,
environment and
climate change
Climate change,
mitigation and
development
7 P1
2
02/11/2015
Professor (MIT) 1. Cape Peninsula
University of
Technology,
2. Industrial &
Petrochemical
Consultants
Energy, petroleum
industry, mining
industry, extractive
metallurgy, climate
change
50 P2
3
03/11/2015
MSc Bioprocess
Engineering (UCT), PhD
Chemical engineering
and Biotechnology
(Cambridge)
Director at a waste to
energy plant building
business.
Waste to energy,
Biomass, gas, feed
business, algae
growth and
manufacture, solar
(PV).
3 P3
4
04/11/2015
MBA (Oxford) CEO of a solar
business
Financial modelling,
Solar
15 P4
5
04/11/2015
BSc and MSc Electrical
Engineering (Wits)
Senior Researcher at
the Energy Research
Centre, University of
Cape Town working
primarily in policy
analysis in energy,
socio-economy and
environment.
Energy policy
analysis, public
interest policy
advocacy, energy
planning, public and
private sector
company
management, project
management,
research and
teaching
32 P5
6
18/11/2015
Professor, BSc (Chem
Eng.) Cape Town
BA UNISA
PhD Edinburgh
Director of the
Management
Programme in
Infrastructure
Reform and
Regulation
Management,
restructuring and
regulation of
network/infrastructu
re industries.
33 P6
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DonovanTraubeFinalReport

  • 1. | P a g e Fossil Fuels vs Green Energy Technologies: A Foresight Technology Mapping of South Africa A DISSERTATION PRESENTED TO The Graduate School of Business University of Cape Town In Partial Fulfilment of The Requirements for the Master of Business Administration Degree BY Donovan Traube MBA Full Time 2015 Exam number: 419
  • 2. i | P a g e Plagiarism Declaration 1. I know that plagiarism is wrong. Plagiarism is the use of another’s and to pretend that it is one’s own. 2. I have used the recognised American Psychological Association (APA) convention for citation. Each significant contribution and quotation from the works of other people has been attributed, cited and referenced. 3. I certify that this research report is my own work. 4. I have not allowed, and will not allow, anyone to copy this research report with the intention of passing it off as their own work. 5. I acknowledge that copying someone else’s research report is wrong and declare this my own work. Name: Donovan Traube Signature: Date: 09/12/2015 Place: Graduate School of Business – University of Cape Town
  • 3. ii | P a g e Acknowledgements I would like to thank my family; especially my parents for getting behind me in my choice to study further. Their support has been unconditional and really appreciated. Secondly I would like to thank my sister for her help with editing from abroad. Thanks also goes to my younger sister for simply being my younger sister (not thanking her will get me in trouble. I would like to Mary Lister for her Mendeley referencing skills and patience (this wasn’t the only assignment she fixed this year). Lastly, I’d like to thank my fellow students for making the MBA process an unforgettable experience. More specifically my close mates this year, you know who you are, we had some great fun writing our dissertations in the knowledge hub (Seminar Room 33).
  • 4. iii | P a g e ABSTRACT The purpose of this research is to build a technology foresight map of South Africa’s energy supply environment in relation to the generation of electricity. Currently the South African energy sector is dominated by coal power which provides up to 77% of South Africa’s primary energy needs and 93% of all electricity production (Department of Energy, 2015a). Due to the global emphasis on carbon emissions which are produced through the burning of fossil fuels, there is now a drive to reduce our reliance on mature fossil fuel technologies. The actions being taken involve the introduction of newer green technologies to mitigate carbon emissions and their subsequent environmental impact. This study attempts to observe the various fossil fuel and green energy technologies available and in use within South Africa and then determine what their development schemes are. These development schemes are reliant on more than just technological capability. To encompass these factors a technology foresight framework is used to structure the study and provide guidance for assessing energy technologies in the case of South Africa. The data collection method used was a hybrid of the Delphi and roadmapping techniques. Various aspects of each style were adapted within the limitations and a structured questionnaire guide was designed to help achieve consensus in the trajectories of the various fossil fuel and green energy technologies. The results of the study indicated which factors need to be strongly evaluated when mapping both green energy technologies and fossil fuel technologies on a case basis in an overwhelmingly fossil-fuelled environment (South Africa). They are briefly described below; Technology implementation in South Africa is largely affected by the socio-political landscape which has produced a centralised system that is supply-heavy and fossil fuel based. The mature technologies are found to be robust within themselves but have limits due to externalities. Diversification via renewables introduces varying levels of robustness (dependent on the technology) and therefore improves the security of supply to a certain extent. These changes include, becoming more demand-oriented through smaller capacities and increased energy services therefore introducing decentralisation onto South Africa’s centralised system.
  • 5. iv | P a g e List of Acronyms CCS Carbon Capture and Sequestration CCGT Closed Cycle Gas Turbines CCT Clean Coal Technologies CSP Concentrated Solar Power DoE Department of Energy EDL Economic Distance Limit ESKOM Electricity Supply Commission (State owned electricity supplier) GHG Greenhouse House Gas GW Gigawatt LCC Lifecycle Cost LFR Lead cooled fast reactor LMFR Liquid metal fast reactor MEC Minerals-Energy Complex MW Megawatt NDP National Development Plan NGO Non-Governmental Organisation OCGT Open Cycle Gas Turbines PV Photovoltaic RDP Reconstruction and Development Programme REIPPPP Renewable Energy Independent Power Producer Procurement Programme SA South Africa TNA Technology Needs Assessment 2DS 2°C Scenario
  • 6. v | P a g e Table of Contents 1. RESEARCH TITLE...............................................................................................................1 2. INTRODUCTION .................................................................................................................1 2.1 Research Area and Problem.............................................................................................1 2.2 Research Questions and Scope.........................................................................................4 2.3 Research Assumptions .....................................................................................................4 2.4 Research Ethics ................................................................................................................4 3. LITERATURE REVIEW ......................................................................................................5 3.1 Green Technologies (background)...................................................................................5 3.2 Fossil Fuel Technologies (background)...........................................................................6 3.3 Technology Foresight Framework ...................................................................................7 3.3.1 Key technologies identification.................................................................................7 3.3.2 Identification, observation, analysis of technologies...............................................10 3.3.3 Monitoring of technologies, research findings to date ............................................11 3.3.4 Technology analysis in the context of competitiveness ..........................................23 3.3.5 Evaluation of opportunities and threats associated with technological development ..........................................................................................................................................26 3.3.6 A vision of future technological trends ...................................................................30 3.3.7 Identification of actions supporting the development of desired technologies .......32 4. CONCLUSION....................................................................................................................35 5. RESEARCH METHODOLOGY.........................................................................................37 5.1 Research Approach and Strategy ...................................................................................37 5.2 Research Design, Data Collection Methods and Research Instruments ........................39 5.3 Sampling.........................................................................................................................40 5.4 Data Analysis Methods ..................................................................................................42 6. RESEARCH FINDINGS, ANALYSIS AND DISCUSSION.............................................44 6.1 Research Analysis ..........................................................................................................44
  • 7. vi | P a g e 6.2 Research Findings ..........................................................................................................46 6.2.1 Secure and Continuous Supply................................................................................46 6.2.2 Social Acceptance....................................................................................................48 6.2.3 Decentralised and Centralised energy supply systems............................................51 6.2.4 Elements of Technology and Analysis ....................................................................56 6.3 RESEARCH DISCUSSION ..........................................................................................59 6.3.1 Fossil Fuel Technologies vs Green Energy Technologies ..........................................60 6.3.1.1 Identification, observation and analysis of technologies......................................60 6.3.1.2 Technology analysis in the context of competitiveness .......................................61 6.3.1.3 Evaluation of opportunities and threats associated with technological development......................................................................................................................64 6.3.1.4 A vision of future technological trends ................................................................66 6.3.1.5 Identification of actions supporting the development of desired technologies ....68 6.4 Research Limitations......................................................................................................69 7. RESEARCH CONCLUSIONS............................................................................................70 7.1 Identification, observation and analysis of technologies ...............................................70 7.2 Technology analysis in the context of competitiveness.................................................71 7.3 Evaluation of opportunities and threats associated with technological development....72 7.4 A vision of future technological trends..........................................................................73 7.5 Identification of actions supporting the development of desired technologies..............73 7.6 Key technologies identification......................................................................................74 8. FUTURE RESEARCH DIRECTIONS ...............................................................................76 LIST OF REFERENCES.........................................................................................................77 APPENDICES .........................................................................................................................84 Appendix A: Questionnaire Guide.......................................................................................84 Appendix B: List of cited quotes from interviews as imported from Atlas.ti......................86
  • 8. vii | P a g e Table of Figures Figure 1: Total primary energy consumption for South Africa, 2013 .......................................2 Figure 2: The technological context in foresight research.........................................................3 Figure 3: Estimated energy share of global final energy consumption, end 2012.....................8 Figure 4: Global investment in fossil fuel supply......................................................................8 Figure 5: Estimated renewable energy share of global energy production, end 2013...............9 Figure 6: Global new investment in renewable energy by technology, developed and developing countries, end 2013 .................................................................................................9 Figure 7: The elements of technology .....................................................................................11 Figure 8: Components of a silicon PV cell ..............................................................................12 Figure 9: Solar-field components of a CSP system .................................................................13 Figure 10: Cross section of a large hydroelectric plant ...........................................................14 Figure 11: Grid connection rates and the required rates to reach the 2DS targets...................22 Figure 12: (a) Conventional electricity distribution network. (b) Electricity distribution network with distributed generation ........................................................................................25 Figure 13: The triangle for social acceptance of renewable energy innovation ......................27 Figure 14: The Six Capital Axes..............................................................................................29 Figure 15: Countries with renewable energy policies, early 2014...........................................33 Figure 16: Data Structure example ..........................................................................................43 List of Tables Table 1: Total Global Energy Consumption..............................................................................2 Table 2: Typical Values of Surface Roughness Length z0 in Metres for Various Types of Terrain......................................................................................................................................17 Table 3: Major steam coal producers (million tonnes) ............................................................19 Table 4: Summarised results for REIPPPP Windows 1, 2 and 3.............................................34 Table 5: Participants interviewed.............................................................................................41 Table 6: Data Structure ............................................................................................................45
  • 9. 1 | P a g e 1. RESEARCH TITLE Fossil fuels vs Green Energy Technologies: A foresight technology mapping of South Africa. 2. INTRODUCTION 2.1 Research Area and Problem The purpose of this research was to develop a technology foresight map of the energy supply environment in relation to the production of electricity so as to provide insights as to what technologies will be present and/or prevalent in the next 20-30 years within South Africa (SA). It also details the possible changes these technologies may undergo. The scope of technology for this research assignment was focused on energy technologies that are either fossil fuels- based or part of the renewables sector. The context for this study was derived from the big push we see in the world to move from carbon-based fossil fuel technologies towards more sustainable and green technologies in order to reduce the impact of global warming and climate change. It is a comforting notion to behold that the world’s future energy is to come from green technologies but given limitations in these alternative energy sources it is necessary to understand that they will share this space with the fossil fuels sector, as they already are and will most likely continue to do so. Table 1 below indicates to us that a staggering 87.8% of the world’s energy is currently derived from non-renewable fossil fuels. Further reasons for conducting this research was to ascertain the relevance of certain technologies in the future. According to the European Commission (2013) there is no single renewable energy technology that alone can sustain a complete transformation from fossil fuels. This is because most energy sources in the renewable sector are not sufficiently abundant or they have drawbacks in terms of security of supply. This means that the development of multiple technologies is required to help wane society off fossil fuels. Ultimately pressure falls on governments around the world to implement large scale energy policy changes. In this scramble for changing the energy supplies there can be an element of oversight as certain technologies are pushed through without properly assessing whether they are not only viable but technologically ready in a feasible sense.
  • 10. 2 | P a g e Table 1: Total Global Energy Consumption Source: (Letcher, 2014) In order to build a technology foresight map for SA, a technology needs assessment (TNA) was conducted. A TNA is “a set of country-driven activities that identify and determine the mitigation and adaptation technology priorities of countries” (Technology Needs Assessment, 2015). In this study the TNA was focused on the green technologies and fossil fuels sectors of SA. It indicated what the needs are, “for new equipment, techniques, services, capacities and skills necessary to mitigate GHG emissions and reduce the vulnerability of sectors and livelihoods to climate change” (Technology Needs Assessment, 2015). Below is a pie-chart of the South African energy consumption and you can immediately see the disparity in energy sources used as compared to the global energy sources in Table 1. Figure 1: Total primary energy consumption for South Africa, 2013 Source: (BP, 2013).
  • 11. 3 | P a g e Not only does both the world and SA overly rely on fossil fuels, SA indicates a significant over-reliance on coal which makes for new energies and diversification much harder to breakthrough as the energy supply environment and infrastructure is significantly biased towards this particular energy source. Another method used was technology roadmapping. Technology roadmapping provides navigational assistance for interested parties whilst travelling through partly known and partly unknown territories. It encompasses all activities including technologies, products, processes, functions, market agents, competencies, projects and further aspects (Martin G. Moehrle, Isenmann, & Phaal, 2013). A framework is required to encompass the above two definitions and to build a technology foresight map of SA. The framework below was used to assess the energy technologies. It is taken from Gudanowska (2014). Figure 2: The technological context in foresight research Source: (Gudanowska, 2014). This research was predictive and the results obtained will hopefully be useful in the development of a safe, secure and sustainable energy supply system as the scientific realm of policy decisions regarding the different types of technology are brought forward.
  • 12. 4 | P a g e 2.2 Research Questions and Scope Some questions that need to be answered in this study include finding out what is required for the world to begin shifting its sources of energy supply so that it encompasses the green technologies but does not exclude the improvement of the current embedded technologies of fossil fuels. The predominant source of energy for the planet comes from fossil fuels and it is known that large industries with important skills are involved and rely on these sources. It is unrealistic to assume a rapid global shift in energy supply systems since developed and developing countries have differing future energy needs, let alone resources. The question is; when will these technologies be an optimum choice for energy supply within a greater energy supply system of SA? According to Keppo and Strubegger (2010) the constraints such as resource availability, energy transmission and distribution infrastructures, possible environmental restrictions and costs need to be included in a foresight decision. These factors have been explored. 2.3 Research Assumptions As a researcher interviewing experts in various fields of energy, it is assumed that answers obtained from interviewees were accurate and true. The experts interviewed were carefully selected based on academic and industry experience credentials. As part of the literature review of this paper, a sound background understanding was gained through thorough analysis of accredited journals and other various up-to-date sources. This accumulation of knowledge on the subject of fossil fuels and green technologies in SA mitigated as many inaccuracies that protruded in the interview responses. 2.4 Research Ethics This research project was conducted in a professional manner. All participants involved were privy to any information they requested. This was done to ensure that they understood that all research conducted was done transparently. Individuals interviewed were made aware of the purpose of the study and a confirmation of their understanding was made prior to the start of the interviews through the signing of a consent form. All those interviewed were made aware that they were allowed to withdraw from the research at any time. All interviews were recorded using a recording device and transcribed timeously. The details of interviewees are kept confidential.
  • 13. 5 | P a g e 3. LITERATURE REVIEW 3.1 Green Technologies (background) Green technologies are not a new phenomenon. What is new is the sudden interest in these technologies since the general acceptance that the world’s temperatures are rising due to an increase in the carbon dioxide levels in the atmosphere. The economic emergence of the world’s biggest populations such as China and India has now posed the question of how finite our resources are that provide us with energy. These nations have the populations to consume vast amounts of fossil fuels and other resources such as food. A worrying factor as pointed out by Preisig and Wittgens (2012) is that we as humans have not been enabling the biosphere to bind this carbon dioxide, instead we have been clearing vital ecosystems which help control carbon dioxide levels in order to make way for large-scale commercial food production. In the past such disruptions in the environment was relatively confined to specific regions and didn’t have globally adverse effects but since it is the biosphere that is being affected by the large scale carbon emissions, “for the first time in history, human activities are having an impact on earth as an overall system” (Weinberger, Jörissen, & Schippl, 2012, p. 32). As part of solving this problem a large amount of public and private investment has gone into developing and bringing forward technologies that can help reduce our dependence on fossil fuels. The problem is that oil, coal and gas are considered high density fuel sources each in their own right (Droste-Franke et al., 2009) and have therefore been exploited for many years with proven and continuously improved technologies in converting them to energy. This remains a problem for the renewable sector in that the density of these alternative sources of energy supply are substantially less, in the most part in terms of their storage potential. Energy storage is probably one of the most important technologies that needs to go hand in hand with renewables. This point is reiterated by Harell and Daim: The need for the complementary technologies to successfully implement the new technology is often lagging. In the case of renewable energy, many of the developing technologies are unpredictable or intermittent in their ability to produce energy and as such will require additional energy storage technologies to mitigate the erratic nature of the energy production. This energy storage dilemma is a key negative attribute of renewable energy… (2009, p. 74). In order for renewables to compete, their technologies have to substantially improve and it is important to understand that for them to be competitive, an energy supply system should take
  • 14. 6 | P a g e on an holistic view of these green technologies (Weinberger et al., 2012). The rollout of renewables therefore cannot be done in isolation. Letcher (2014) holds a similar view in that for mankind to significantly reduce carbon emissions, we cannot and are not able to fully abandon the use of fossil fuels. Also, a holistic view is required, involving different renewable technologies, improving energy efficiencies, pursuing carbon capture and sequestration (CCS) and transitioning from heavy polluting coal to natural gas (the least polluting conventional fossil fuel). 3.2 Fossil Fuel Technologies (background) Fossil fuels are the predominant source of energy around the world. Their technologies are entrenched and are likely to remain the base load of energy for an extended period of time. Oliver (2008) states that globally fossil fuels will remain the dominant means of producing electricity. This is because large scale power plants are built with considerable investment and in order to make them financially viable they need to run for life-times of up to 40 years. The International energy agency predicts that the use of natural gas and low-carbon fuels will grow the strongest and will slowly start to replace oil and coal, but by 2040 the energy outlook will still remain in strong favour of fossil fuels. “By 2040, each fossil fuel accounts for around one- quarter of global energy demand, with the remainder from low-carbon fuels” (International Energy Agency, 2015d, p. 1). It is known that although there is great pressure to phase-out fossil fuels their ability to provide secure base load power cannot be discounted. The G20 leaders committed to this phasing-out in 2009 but contrary to commitments, subsidies are growing in fossil fuels. Global Subsidies in 2011 were at $523bn (Schwanitz, Piontek, Bertram, & Luderer, 2014) and it has more recently been reported that this figure is now 550 billion USD. A figure four times greater than global subsidies spent on renewables. The term ‘fossil fuel’ portrays a picture of a world with limited supply. We are told that these sources of energy that we are pulling from the ground took millions of years to form through natural geological processes. The rate of our consumption by far supersedes the rate of natural fossil fuel formation but do we need to be worried? Will the world run out of fossil fuels in the near future? This is a hotly debated question as answers can only be made based on proven reserves. According to Dumane (2015) there is an estimated global market value of fossil fuels of $27 trillion waiting to be tapped into (proven reserves). Fossil fuels are considered to be relatively cheap and dependable and in the emerging countries of our time (China, India and even SA) the need for an energy source with such attributes is perceived to be key for lifting people out of poverty. To understand the importance and size of fossil fuel futures is knowing
  • 15. 7 | P a g e that there are nearly 1200 new coal-fired power plants proposed for development and the majority are in China and India (The World Resources Institute, 2015). One of the worrying facts from an emissions point of view is the lock-in that occurs with fossil fuel technologies due to the lifespan and scale of these technologies once installed. Large capital investments are made and so new technologies, particularly renewables, are not adopted due to the prior large investments (Keppo & Strubegger, 2010). Not having a really progressive long term perspective, coupled with an already secure supply of energy heavily reduces the incentive to switch to new alternative technologies. A great example of this exact situation is seen in SA, classified an emerging market with a current shortage in electricity supply. The total price of its new coal-fired power station, Medupi, is expected to eventually cost R150bn (Eberhard, 2013). Not to mention there is another coal-fired power station, Kusile, of equal size simultaneously being built with an estimated total cost of “118.5 billion Rand excluding interest during construction, cost of cover and inflation” (Eskom, 2015d). The output of each of these stations is 4800 megawatts and the country’s current plan is to only introduce 17 800 megawatts in renewable energy sources (via private sector) from 2010-2030 as allocated by the Department of Energy (Department of Energy, 2015d). This seems like a dwarfing amount and great for renewables but given that upgrades will continue on existing big coal and new nuclear plans to be implemented, by 2030, only 9% of SA’s total generation capacity will be from renewables (WWF, 2015). 3.3 Technology Foresight Framework 3.3.1 Key technologies identification This research will focus mainly on the four types of renewable sources of energy and four different types of fossil fuels. The technologies to be investigated are: solar, hydro, biomass, wind, oil, coal, gas and nuclear. The basis for this choice is not only for scoping purposes but these technologies have and are currently dominating the energy space on a global stage, by being the most present and by attracting the most interest in terms of the global investment in the energies sectors. Since technologies eventually get widely disseminated it is right to identify them at this level first and then observe at the South African level. It is believed that on these two factors alone, one can surmise that the future energy space of SA will then largely be influenced by them, hence their relevance and choice in this study. The figure below illustrates the estimated energy share of global final energy consumption.
  • 16. 8 | P a g e Figure 3: Estimated energy share of global final energy consumption, end 2012 Source: (Renewable Energy Policy Network for the 21st Century, 2014) Of the fossil fuels the current investment flows can be seen in Figure 4 below which indicates oil, coal and natural gas being the largest in the fossil fuels sector. They also consequently are the biggest three sources of energy in the world as shown in Table 1. Hence why they have been chosen for this study. Figure 4: Global investment in fossil fuel supply Source: (International Energy Agency, 2014b)
  • 17. 9 | P a g e The next largest sector for energy production is the renewable sector and the figure below illustrates the prevalence of each renewable technology currently employed in global production. Figure 5: Estimated renewable energy share of global energy production, end 2013 Source: (Renewable Energy Policy Network for the 21st Century, 2014) Furthermore the figure below illustrates the investment flows for the various renewables and therefore confirming the choice of renewables selected in this study. Figure 6: Global new investment in renewable energy by technology, developed and developing countries, end 2013 Source: (Renewable Energy Policy Network for the 21st Century, 2014)
  • 18. 10 | P a g e Nuclear energy has been bundled into this study and falls under the fossil fuels bracket. It is not exactly a fossil fuel but since its core source of fuel is mined (Uranium and Plutonium) it will be classified as a non-renewable for this study. Its relevance is shown in Figure 3 where nuclear power alone supplies 2.6% of the world’s energy. SA is a fossil-fuelled economy but this is slowly being diversified through initiatives such as the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) which will be discussed more in depth later in this paper. Figure 1 indicates SA’s total primary energy consumption. One can see the heavy reliance on fossil fuels. Hence the importance of such a study as this trend is beginning to change globally and in SA. 3.3.2 Identification, observation, analysis of technologies Elements of Technology and Analysis To perform identification, observation and analysis of technologies certain parameters need to be set so as to limit the scope of what you are looking for in an energy technology. A starting point for assessing various energy technologies can be to determine the usefulness of the energy. Usefulness can be compared to utilisation. According to Bouffard and Kirschen (2008, p. 4504), “The classic energy supply chain can be summarised quite succinctly. First, primary energy is harvested remotely and may be transformed; it is then transported before it is finally utilised.” Useful energy is then described by (Droste-Franke et al., 2009) as the actual energy required to operate a machine and the output thereof. For example, “Useful energy includes such things as the light required to read a book or the electricity needed to use a computer.” (Droste-Franke et al., 2009). Energy technologies of any significance should be able to fulfil this basic need. Certainly any technology that is involved in a foresight study should be able to pass this test so as to be relevant in the future. All of the technologies selected for this study haven proven themselves in terms of usefulness based on the level of their current use in the world today. Usefulness doesn’t necessarily include all the elements of a technology. The elements of a technology help to characterise them in relation to their market. According to Nygaard, Hansen, Boldt and Trærup (2012) the elements include hardware, software and org- how (orgware) as seen in the figure below. Hardware includes the tangible aspects of the technology. Software include the processes associated with the production and use of the hardware. The orgware includes institutional framework, or organisation, involved in the adoption process of a new technology.
  • 19. 11 | P a g e Figure 7: The elements of technology Source: (Nygaard et al., 2012) It is important to understand the varying degrees of these three elements in different energy technologies. Often in most technologies there is a strong hardware element with an embedded software and orgware component. This can create confusion and in places like Africa, when a TNA is done, those technologies that are lacking a strong hardware element are rarely chosen just because its advantages aren’t as visible (Nygaard et al., 2012). Viewing technology in this framework will help provide an objective view for this study. 3.3.3 Monitoring of technologies, research findings to date 3.3.3.1 Solar Solar is considered to be the most abundant resource for power generation (Mai, Sandor, Wiser, & Schneider, 2012). It is for this reason that Letcher (2014) believes the large drive in appeal for solar power exists. For example enough solar radiation falls on the Earth at any given time to provide an average of 20GW to every person. That is roughly the equivalent of 4 large modern coal-fired power stations if you look at the capacity of the newly built Medupi or Kusile stations in SA (Eskom, 2015d). The difficulty existing in solar energy is efficiently and economically converting the sun’s rays to energy. One of the reasons for this is due to the location of solar radiation abundance and consistency; “The equator receives the most annual solar energy and the poles receive the least. Dry climates receive more solar energy than those with cloud cover.” (Letcher, 2014). Solar energy power generation is done broadly in two forms. One is the use of photovoltaic (PV) panels and the second is via concentrated solar power (CSP). “Photovoltaic (PV) energy
  • 20. 12 | P a g e is a direct application of the photoelectric effect discovered by Edmund Becquerel in 1839, whereby sunlight energy excites electrons present in metals. PV devices are able to convert sunlight directly into electricity.” (Letcher, 2014, p. 383). CSP is very different to PV. It uses the sun’s rays in a different manner which has multiple variations (see Figure 9 below). “CSP technologies collect high temperature heat to drive a steam turbine.” (Mai et al., 2012, p. 12). The systems involve tracking the sun’s rays so as to maximise the heat on a focal point. Glass mirrors have been widely used as the concentrating collectors. This concentration is focused on a heat conducting fluid which is used either directly in the in the power cycle to drive a steam turbine or circulated to heat up another more heat holding substance such as molten salt which is then used as energy storage to drive the steam turbine in the evenings. Figure 8: Components of a silicon PV cell Source: (Augustine et al., 2012, p. 77)
  • 21. 13 | P a g e Figure 9: Solar-field components of a CSP system Source: (Augustine et al., 2012, p. 78). Solar in SA has been implemented at scale in both PV and CSP but also through supplying solar water heaters. The solar water heater rollout by government to many RDP (Reconstruction and Development Programme) projects across the country has contributed to making solar in SA as one of the biggest renewable energy providers. A major contribution to the positive take-up of solar in SA is due to the abundance of radiation. SA has an average of 220 watts/square metre where as in the USA it is only 150 watts/square metre. This makes it one of the highest solar radiation counts in the world (Department of Energy, 2015e). 3.3.3.2 Hydro Hydroelectric power is generated by using water either from a reservoir such as a dam or from a run-of-river to drive a turbine (Mai et al., 2012). The electrical energy is derived from the potential energy of water moving from a high elevation to lower elevation (Letcher, 2014). Hydropower constitutes 16% of worldwide electricity production which is more than nuclear, only providing 12.9%. This 16% also staggeringly constitutes 85% of all renewable electricity
  • 22. 14 | P a g e production making it an already significant player in the alternative energies sector (Letcher, 2014). Hydropower operations depend on the environment and lay of the land, they therefore vary in size and the way in which they operate. The technology has been around for a long time, the first station was installed in 1882 in the USA. What is impressive is that the basic technology used in this field of power generation is mature and many well-built plants are still functioning a century later (Augustine et al., 2012). The technology can be classified as relatively robust due to hydroelectric power stations being highly reliable for long periods of time as well as their ability to upgrade and modernise in order to improve efficiency and environmental performance. An illustrated example of a basic hydroelectric power station is below. Figure 10: Cross section of a large hydroelectric plant Source: (Augustine et al., 2012, p. 41) There are ten hydropower stations and 3 pumped storage schemes in SA. Due to the limited hydro resources as well as the large scale environmental impacts of building dams in SA there is not too much opportunity for expansion in this technology (Eyetwa, Mashimbye, & Goyns, 2010). There is however one large scale project under construction that does not fall under the ‘Renewable Energy Independent Power Producer Procurement Programme’ (REIPPPP). This is the Ingula pumped storage scheme. It has been in construction since 2005 and is expected to come online at the end of 2015. This will add 1332MW to the grid and will grow SA’s Hydro by almost a third (Eskom, 2015b).
  • 23. 15 | P a g e 3.3.3.3 Biomass Biomass power is generated by collecting and combusting biological mass and using the heat to drive a steam turbine (Mai et al., 2012). “Biomass is unique among renewable energy resources in that it can be converted to carbon-based fuels and chemicals as well as electric power” (Augustine et al., 2012, p. 30). Rittmann (2008) claims bioenergy is the best option for reducing societies use of fossil fuels as the sun’s energy is captured in biomass and converted to energy forms useful to modern society. Biomass residues can be in the form of agricultural, animal, human wastes and a variety of industrial operations. According to Rittmann (2008), microorganisms are used to convert these residues into useful energy products such as methane, hydrogen and electricity. The other option is to produce biodiesel via the use of photosynthetic organisms which basically means converting arable land into growing crops in order to produce ethanol. What is important when considering the use of biomass to produce various biofuels is ensuring that they are biodiversity friendly. As explained earlier biomass can be in the form of grown food crops. Intensifying agriculture in the name of energy production does not necessarily make sense. For example at current energy extraction efficiencies, crops will have to be grown on a massive spatial scale to replace even half of the US transportation fuel needs (Groom, Gray, & Townsend, 2008). Rittmann (2008) agrees that diverting food crops to biofuels will fail, as competing with food production for high-grade arable land, not to mention that the total energy output is actually quite limited. Hence Groom et al. (2008, p. 608) states “corn-based ethanol is the worst alternative among leading potential biofuels”. “Biofuels will only be beneficial if they are cultivated under sustainable, biodiversity-friendly practices.” (Groom et al., 2008, p. 608). Rittmann (2008) then suggests that the largest potential for converting biomass into renewable energy is via the conversion of sunlight into high-value photosynthetic microorganisms. Examples of these are certain algae which have high lipid contents which can be extracted and converted into biodiesel at rates 100 times or more, greater than any other plant system. Also the non-lipid biomass can then be converted to methane, hydrogen, or electricity by the microbial conversion processes making algae and other similar photosynthetic microorganisms the most feasible bioenergy solution (Rittmann, 2008). Biomass is currently a very small sector of energy supply in SA. Bagasse is the largest use of biomass as a source of energy. Bagasse is the waste fibre from sugar cane. It is used on a decentralised basis (not being fed into the grid) at some sugar refineries to produce heat and
  • 24. 16 | P a g e electricity in the refining process. It is estimated that 245MW is currently installed throughout SA (Eyetwa et al., 2010). 3.3.3.4 Wind Currently wind resources on land and even offshore are relatively abundant around the world. Wind turbines work on the premise of converting the kinetic energy of wind into electrical energy. The amount of power a wind turbine produces relies on the available wind speed. No wind equals no power, which causes intermittent power production. The importance for placing wind turbines in high wind probability areas has resulted in developments of offshore wind projects. This is an expensive option and locating the source compared to where the energy is consumed can be very large in distance. On the upside, wind power has had more than 30 years of development which has resulted in producing land-based wind energy at a cost of five times less than when it began (Augustine et al., 2012). Also to highlight wind as a large scale renewable resource for power, it is believed that globally there is sufficient kinetic energy in wind that exceeds the world’s aggregate electricity consumption (Letcher, 2014). Fortunately the options for improvements in offshore wind technologies looks promising which will have large-scale positive effects on helping to further reduce man’s carbon emissions. Offshore wind technology has roughly just more than a decade of experience and is perceived to have greater opportunities for improvements and cost reductions than its counterpart land- based technologies (Augustine et al., 2012). There are clear technical attractions for offshore wind energy. Wind is stronger and more stable at sea (European Commision, 2013) due to the lower turbulence levels experienced because of the more favourable surface roughness’s. Offshore has the second lowest level of surface roughness (calm sea), the lowest level of surface roughness is ice and mud flats which is not always geo-located very well (see Table 2). Wind speed also increases with height and tends to reach its limit at 2000 metres known as the gradient height (Letcher, 2014). This height factor is more suited to offshore as the technology can still progress and the size of wind turbines is expected to increase to heights of 250 metres in order to capture the more consistent and higher wind speeds. Construction and logistics of these impressive pieces of equipment becomes more difficult with size but by moving offshore it is believed this will be eased as road transportation is eliminated and transportation via boat and barge to construction site is much more viable (Letcher, 2014).
  • 25. 17 | P a g e Table 2: Typical Values of Surface Roughness Length z0 in Metres for Various Types of Terrain Source: (Letcher, 2014, p. 318) SA’s coastal region has a fair wind potential especially in the Eastern and Western Cape. A number of wind farms have been installed both by Eskom itself as well as privately through the REIPPPP. It has proven to supply some of the cheapest electricity in SA. The current rewarded capacity for construction in SA is over 2GW (Department of Energy, 2015f). 3.3.3.5 Oil Oil is the single largest source of energy and constitutes 35.3% of global energy consumption (Table 1). Oil can be obtained via conventional and unconventional methods. Conventional oil drilling involves tapping into wells and pumping the oil to the surface. The more costly and often more difficult methods known as unconventional involve extracting the oil from shale and tar sands. There are some bodies of evidence which suggest that conventional oil production has a limited capacity and any major global additional demands will have to be met by the more unconventional sources (Owen, Inderwildi, & King, 2010). Unconventional is said to be more expensive due to the nature of their reservoirs but as known deposits in conventional oil have dwindled, the large scale investment in the unconventional extraction methods has led to some technological breakthroughs drastically bringing down prices that these sources should now be considered conventional (Letcher, 2014). Unlocking these unconventional sources of
  • 26. 18 | P a g e oil in the USA (tight oil) and Canada (tar sands) is described as having brought in an era of renewed energy abundance (International Energy Agency, 2014a). Either way, the need for oil remains massive, it is an embedded energy source as the technologies around it rely heavily on its availability. It provides us with petroleum for vehicles; the base power for global transport. In this study oil is viewed with the perspective of being manufactured into diesel which is used at SA’s open cycle gas turbine (OCGT) power stations that are mostly used to provide grid stability. Currently there is 2.1GW of OCGT stations in SA that run off diesel and 670MW in construction (Eskom, 2015a). Getting oil to consumers is expensive. It is estimated that over three quarters of all investment spend in this industry is involved in the transportation of oil. This is a clear inhibitor to the price and even the consumption of oil, especially for those countries that have to import it from different regions (International Energy Agency, 2014b) such as SA. The refining industry is in part to blame for these rises in costs, especially since the global financial crisis where many refineries were closed due to not being able to operate at fair margins. The result is a shift in refining to many non-OECD (organisation for economic cooperation and development) countries, making it truly globalised and leaving many markets highly dependent on imports. Large scale imports provide an opportunity for other technologies to fill the gap against the GHG producing oil technologies. The petrochemical industry is mainly represented by Sasol which is the world’s largest coal- to-chemicals producer. Sasol uses the Fisher-Tropsch process whereby liquid fuels are produced using natural gas and coal. This programme was implemented in the 1950’s as an attempt to secure SA’s supply of liquid fuels which became even more prevalent in the times of sanctions during the Apartheid era (Eyetwa et al., 2010). SA has very small oil reserves hence the need for previous state-owned Sasol. SA is able to meet about 36% of its fuel demand with synthetic fuels made in the gas/coal-to-liquids process (Department of Energy, 2015c). The rest is imported crude oil that is refined locally at a host of refineries; Sapref, Natref, Enref, Calref, Secunda and PetroSA (Mosgas). 3.3.3.6 Coal Coal is the main source for global electricity generation. This is due to it being cheap and readily available locally in many regions of the world. It is more abundant than oil and gas and its history can be traced back thousands of years (Letcher, 2014). It made its mark during the industrial revolution where it became the fuel of choice in machines and engines that ran off
  • 27. 19 | P a g e steam turbines. The technology progressed into large-scale electricity production and already has surpassed oil in metric tonnes of consumption but due to its lower density it still does not provide more energy to the global market than oil. This however is changing with the rise of emerging markets such as India and China (International Energy Agency, 2015b). The world’s largest steam coal production nations can be seen in Table 3 below. This table indicates the significance of the developing world and its insatiable appetite for coal that is used in generating electricity. South Africa is not far down the list. Table 3: Major steam coal producers (million tonnes) Source: (International Energy Agency, 2015b) With emerging markets leading the way in production and consumption it is no surprise that this demand is expected to grow. The IEA expects that coal demand for electricity production will grow in every region of the world with the exception of the United States, due to the rapid increase in non-conventional shale gas (International Energy Agency, 2015b). Coal unfortunately has the highest carbon dioxide footprint as compared to other combustion technologies, it also when burned, has trace metals that can be volatised increasing pollution and adding to its negative perception (Letcher, 2014). Combined as a major GHG producer and polluter you can see that the world needs cleaner burning coal technology as we are not able to simply walk away from coal as an energy source. Fortunately there are options for clean coal technologies (CCT) which are realisable and can be improved on, these are the removing of sulphur, nitrogen and trace metals before it is burned which will reduce pollution and make it more efficient (Letcher, 2014). Improvements in the methods used in burning various types of
  • 28. 20 | P a g e coals based on rank (hardness) and moisture have been successful and need to be encouraged further. As an entrenched technology it does face challenges such as rising mining, processing and transportation costs along with increased environmental regulations, but if CCT and other complimentary technologies such as CCS evolve, then coal should have a future with less of a negative perception. The South African energy sector is largely dominated by coal. Up to 77% of SA’s primary energy needs are provided by coal (Department of Energy, 2015a) of which it supplies 93% of all electricity production. Currently many of the country’s coal deposits can be exploited at extremely favourable costs which makes it the fourth largest coal exporter in the world. SA’s coal production is largely embedded in a number of local industries, 62% is used for electricity production, 23% for the petrochemical industry, 8% is used in general industry and 4% used in the steel industry (Department of Energy, 2015a). These statistics already speak volumes for the state of SA in terms of its energy supply as it is stated by Menyah and Wolde-Rufael (2010) “South Africa is confronted with the crucial issue of producing more coal to meet its energy requirements, while at the same time grappling with the issue of reducing greenhouse gas (GHG) emissions”. 3.3.3.7 Gas Electricity generation is the largest energy user in the world and most of it is produced using coal and gas. Gas is seen as the medium term transition solution in an effort to reduce the use of dirty coal. Any intensification of environmental policy should be broadly beneficial for gas and as the price gap between gas and coal has narrowed, its demand has increased. In the medium term gas report (International Energy Agency, 2015a), gas demand is expected to re- accelerate following its slump of 2013-2014 and the growth rate to 2020 is estimated to be at 2% per year. Natural gas does have certain barriers which have historically made it more expensive, this is due to its lack of availability and proximity to markets. Developing gas- producing infrastructure is therefore expensive and considering that most natural gas is methane (a GHG) has also inhibited its production under environmental policies. Currently the capital-intensive nature has caused many gas projects to be put on hold due to the current prices of gas not being able to cover the capital costs but fracking has created an unparalleled resilience to this in the USA.
  • 29. 21 | P a g e Most conventional gas known as free gas is normally trapped in small porous pockets which adds to the cost of extraction due to the lower volumes gained as compared to capital investment. This environment is changing through the use of new techniques known as fracking. Fracking is bringing the location of gas production much closer to its markets. It is the hydraulic fracturing of low permeable rock formations in order to create cracks and gaps for the gas to flow towards the production well (Letcher, 2014). These formations are normally in much larger volumes but do present an environmental hazard as gasses can flow into groundwater reserves. Professor Phillip Lloyd of the energy institute at the Cape Peninsula University of Technology doesn’t foresee any hazard. He claims that in over one million holes that have been stimulated hydraulically in the past 20 years there has been one documented leak which caused minimal damage due to the drillers stopping pumping immediately. They stopped pumping because if there is a leak there is no high pressure to create the gaps for the gas to flow (Lloyd, 2015). Hence it is in drillers interests to not have any leaks. SA has small gas reserves. The gas fields that are being exploited are off the coast of Mossel bay. The gas is piped to Mosgas (PetroSA) where a host of products are produced including petroleum. As for Sasol, it has a much larger gas network where it runs an 865km pipeline from the Temane and Pande gas fields in Mozambique. The gas is piped to Secunda where it is either used to produce liquid fuel and other chemicals or is piped to gas users in the greater Johannesburg metropolitan area (Sasol, 2015). Shale gas in the Karoo of SA probably poses the greatest opportunity for SA to secure its energy supplies as most of South Africa’s OCGT can be converted from using diesel to natural gas. The size of this resource is unknown but it is said to be vast. If it is as big as hoped it will prompt large scale investment in this technology to supply power. The only issue that surrounds it is that it requires horizontal drilling and fracturing of the subsurface in order to release the methane embedded below. Some have indicated that this poses environmental concerns such as scarring the local landscape and possibly chemically polluting the regions’ limited underground water reserves (De Wit, 2011). 3.3.3.8 Nuclear Nuclear power is probably the most controversial energy source. Its association with weapons and radioactive waste has portrayed it to be a villain in the arsenal of energy production. Yet due to the clean nature of its emissions its role in reducing GHG is vital. The 2°C scenario (2DS) is a scenario where the global energy system is able to move towards an 80% chance of limiting global average temperatures rising by 2°C. Nuclear is said to be key in helping achieve this as it is a proven clean technology with secure supply. The figures state that the accumulated
  • 30. 22 | P a g e power generated from nuclear would have to be more than double than what it is in order to avoid the 2DS (396 GW to 930 GW) (International Energy Agency, 2015c) (see Figure 11 below). Nuclear energy has recently taken a dip due to the recent Fukushima disaster as well as the financial crisis putting a halt on these capital-intensive projects. However in the medium term it should see a revival because as of the beginning of 2014 there were 72 reactors under construction. Being a mature low-carbon energy, room for technological growth and opportunity may lie in small modular reactors that supply isolated markets and avoid the capital intensive nature of the technology (International Energy Agency, 2015c). Figure 11: Grid connection rates and the required rates to reach the 2DS targets Source: (International Energy Agency, 2015c) Nuclear energy also has proven itself to be a long term solution. More than 70% of operating reactors in the USA have been granted 20 year extension licenses allowing them to operate up to 60 years. Europe has granted extension licenses for another 10 years making these plants very economical. Safety as always is a critical factor when doing this and licenses are granted provided regular upgrades are performed on these plants (International Energy Agency, 2015c). Some greater safety issues that involve the day to day running is the nuclear waste generated. Since the plants run for such long times waste is accumulated over two generations and it is important to not burden future society with poor plans for effective and safe disposal (Letcher, 2014). One way this can be reduced is by developing and selecting reactor technologies to actually reduce the radiotoxicity of nuclear waste by exhausting the fuel through a closed fuel cycle. The Liquid Metal fast cooled reactor (LMFR) is said to have this capability (Letcher, 2014). In the nuclear road mapping report of 2015 (International Energy Agency, 2015c) it is said that a lead-cooled fast reactor (LFR) known as a generation IV nuclear system is a type of
  • 31. 23 | P a g e LMFR which can produce 60 or more times the energy than other reactors by multi-recycling the fuel, resulting in improved waste management. Part of the large scale centralised energy network in SA is the Koeberg nuclear power station which has a capacity of 1800MW, this constitutes less than 2% of SA’s energy supply (Eskom, 2015c) and 6% of electricity supply (Department of Energy, 2015b). Koeberg has been the most secure power station for supply and has in the recent past been vital for grid stability in the Cape. The success of the Koeberg station in terms of safety and reliability has prompted the DoE to further pursue and build up SA’s nuclear power supply. This has been opted for in response to the failing of the supposedly reliable coal-fired power stations to meet the current demand. It also presents an opportunity for cleaner energy. SA has vast supplies of uranium making it an attractive market to install greater nuclear capacity (Department of Energy, 2015b). The plan is to install a nuclear capacity of 9600MW by 2030 which would inexplicably change the energy supply landscape. 3.3.4 Technology analysis in the context of competitiveness Secure and Continuous Supply Competitiveness in technologies is difficult to assess given the volatile environment and the fast moving rate of technological change. This ultimately makes it hard to pinpoint which energy technology is the best. They will all have varying constraints in different environments and markets around the world. These constraints can be skills, finances and obviously resources. Solar would not be competitive in places like the United Kingdom but wind is more likely to perform better. A better way to measure the competitiveness of energy technologies is to assess their ability to provide a secure and continuous supply in their respective markets. A discussion below is intended to clarify the elements of a secure and continuous supply. Before any institution begins to plan for an energy system it is of utmost importance to determine the security of supply for an extended period of time so that the investment is warranted. Historically a centralised energy supply system was perceived to be more efficient, secure and economic (Haeseldonckx & D’haeseleer, 2008). This security of supply produced a more continuous supply allowing easier management (and management of costs) of the centralised grid. Droste-Franke et al. (2009) state that for a safe and secure energy supply the technology used in generating power must have dynamic stability and be socially robust. Dynamic stability applies to secure and continuous supply as it encompasses two notions. Firstly an energy supply system must be robust “i.e., stable against adverse impacts from the
  • 32. 24 | P a g e outside including natural fluctuations, changes in demand, and technological innovations” and secondly “opportuneness should be ensured, which means the ability to take advantage of unexpected, fortunate developments in the technological or socio-political realm” (Droste- Franke et al., 2009, p. xxiii). Some energy technologies cannot fulfil the needs of having complete dynamic stability on their own due to a lack in either its hardware, software or orgware. But if an energy supply system is well planned and multiple sources of power technologies are utilised then this diversification enables an increased level of dynamic stability. It is important to pursue technologies that may not be entirely dynamically stable on their own but have the ability to fit in with other technologies and work with them. The importance of dynamic stability is highlighted by the studies of Wang, Yu and Chen (2011) where the main challenges of wind power are known to be intermittency and energy storage (hardware). Their attempt to integrate energy storage systems in a wind farm via a flywheel and batteries indicate the need to make a decentralised isolated renewable energy system robust, yet this option has not proved widely successful yet. In contrast to the worries of the level of robustness posed by Wang et al. (2011) with regards to certain renewable energies. Eberhard (2013, p. 1) aptly named a report about secure and sustainable electricity supply as the “The folly of big coal, big nuclear and big networks”. His argument is based specifically around the South African context where weaknesses in large centralised networks have been exposed impeding the security of supply. Some weaknesses include factors up the chain of supply such as the volatility in the coal mining industry and this effect on a system to provide secure and continuous energy. Allan et al. (2015) supports the idea that renewable distributed generation systems can be more secure. Several reasons include; distributed generation technologies are located closer to the demand source and because they can be stand alone or grid connected. They produce smaller amounts of energy and the operational capacity is matched to the demand more easily, providing ‘useful’ energy. There is less waste as the transportation of electricity via a grid over long distances is eliminated. Overall as a whole, the system is more flexible. It is also believed that a community-based energy supply system will result in greater awareness about energy consumption, hence it could lead to more efficient use on part of the consumers. The problem noted by Bouffard and Kirschen (2008) is that historically over the last half century centrally structured systems have been quite successful in providing consumers with a reliable flow of energy. Consumers have become inflexible due to society and the economy being blissfully maintained, rendering them unaware of the impact of their energy use. In order for flexible networks to become the norm
  • 33. 25 | P a g e it is agreed that society needs to move toward an active demand side. Having an active demand requires community involvement which is enabled by more distributed sources of energy supply such as renewables. See Figure 12 below for an example of a centralised network and a distributed generative network, the power flows as indicated by the thickness of the lines indicate the increased level of flexibility provided by a distributed generative network. Figure 12: (a) Conventional electricity distribution network. (b) Electricity distribution network with distributed generation Source: (Allan et al., 2015)
  • 34. 26 | P a g e 3.3.5 Evaluation of opportunities and threats associated with technological development Social Acceptance: An Opportunity and Threat Social acceptance is identified by Gudanowska (2014) as a major part of strategic research that should go into the analysis of technologies so that the potential consequences are properly addressed and problems solved prior to the installation of technologies. Understanding that today’s environment in which technologies operate often involve people with the ability to adopt or reject them. Gaining social acceptance creates further opportunities for technology diffusion and failing to do so can rapidly halt it. Essentially it is a barrier to large-scale deployment which, if managed properly, presents great opportunity. It is therefore necessary, when assessing the future energy needs of the world, to understand the impact that new and existing technologies may have on the environment and the effect this will have on people living in those environments. Ultimately it is the responsibility of those installing these technologies to ensure that all stakeholders concerned are okay with the impacts. Yet more often than not there is always a party that is required to be satisfied to a greater extent in terms of accepting new projects and passing new technologies for development. Gross (2007, p. 2728) explains this concept as “NIMBYism” (not-in-my- backyard syndrome). This phrase is frequently used to describe a community that is opposed to local infrastructure projects that purportedly have a greater social good. Renewable energy technologies as discussed earlier tend to be more on-site, larger in size and closer to a community therefore raising the specific social costs. In the case of wind energy, the construction of large wind turbines have a visual and noise impact on the landscape. In Germany, the country with the most installed wind turbines, it has been recognised that social acceptance may be the biggest opposing factor to renewable energies (Wustenhagen, Wolsink, & Burer, 2007). Social acceptance can be conceptualised into 3 categories; Socio-political acceptance, community acceptance and market acceptance (Wustenhagen et al., 2007) (See Figure 13 below). To understand these three spheres of society it is important to understand that siting decisions is the crux of controversy in building renewables. Often the general public (market) support the idea of renewables leading governments (socio-political) to believe that acceptance will be high yet local communities in the vicinity of these projects almost always have concerns (Bell, Gray, & Haggett, 2005). One of the reasons for concerns is due to the level of trust a community has with the authorities involved with a project. Huijts, Midden and Meijnders (2007) found that in a study surrounding carbon capture and storage technologies, NGO’s (Non-Governmental organisations) were found to be trusted the most and state industry
  • 35. 27 | P a g e the least. This is of particular concern when NGO’s are less able to invest the large sums of money in new technologies as the state possibly could. In an article by Dumane (2015) a point is made that state energy companies (mostly state-run) are pulling back their investments in clean technologies due to the long term investment horizons and a void has been created and is being filled by wealthy individuals and venture capitalists. The length of investment is further exacerbated in renewable energy projects as such projects are often located in environmentally- sensitive areas and land-use for large wind and solar plants can be quite extensive. Furthermore, large scale grid extensions are often required as locations are far from existing infrastructure (The World Bank, 2013) causing a bit of disparity in the needs of private developers and the supply of grid infrastructure which is often state-run. Both these two points make acceptance of projects significantly tougher on more than one level. Figure 13: The triangle for social acceptance of renewable energy innovation Source: (Wustenhagen et al., 2007) With regards to non-renewable energy sources one of the fossil-fuels that comes with a significant benefit is nuclear power. Nuclear Power exhibits negligible emission levels for greenhouse gases during power generation (Dones, Heck, & Hirschberg, 2003). The problem is that many countries remain ambivalent on the issue of pursuing nuclear power as nuclear meltdowns such as Chernobyl and Fukushima showed us the dangers of nuclear, let alone the waste disposal issue. To create a socially accepted nuclear power plant, it is important to focus on the perceived climate change and secure supply benefit that nuclear energy provides (Visschers, Keller, & Siegrist, 2011). Contrastingly sources of energy such as oil and coal emit
  • 36. 28 | P a g e much higher levels of carbon dioxide adding to the greenhouse gasses that are causing worries for climate change. The social acceptance of oil and coal technologies is often overridden by socio-political forces due to their readiness and the modern world infrastructure already geared to these forms of energy, let alone their competitive costs. It is believed that shale drilling, considered an unconventional oil production method, is now 50% more efficient than it was in 2014 (Treadgold, 2015). This increases social acceptance of fossil fuels to the market purely from a price point of view and should do the same for the socio-political forces but drilling for anything always raises attention and there will most likely be factions of the community that may cause a stir. Path Dependency and the Minerals-Energy Complex In SA, it is clear by looking at its current infrastructure that certain socio-political factors dominated policymaking of the past. These past policies pose a massive threat to the development of new energy technologies in SA. Those policy makers were heavily influenced by the autocratic government that was in charge during the time. They were further bolstered by the sanctions imposed during apartheid. The apartheid regime required “energy autarky” and this therefore “reinforced the nature-induced coal path.” (Scholvin, 2014, p. 186). This coal path is explained by the ‘minerals-energy complex’ developed by Fine and Rustomjee (1996) in their study of the political economy of SA. The concept was developed on the evidence that showed very close ties between certain sectors of the South African economy. These sectors included mining, energy and the manufacturing sector which serviced them (Fine & Rustomjee, 1996). It was based initially on mining and then on the beneficiation which followed, this created some of the cheapest electricity in the world (Winkler & Marquand, 2009). It was a system of accumulation. (IIPPE, 2015). Cheap electricity followed allowing industry to flourish and so the financial services sector began to grow and served as a conveyor belt linking the aforementioned sectors. Due to the power of this complex in the South African economy it began to be dominated by six conglomerates known as the six capital axes because of their simultaneous control of the mining, manufacturing and financial sectors (Fine & Rustomjee, 1996). The six axes are shown in the figure below and were at their peak of power in the 1980’s/1990’s.
  • 37. 29 | P a g e Figure 14: The Six Capital Axes Source: (Fine & Rustomjee, 1996, p. 108) Eskom ended up with significant overcapacity which caused the electricity prices in the late 1980’s and 1990’s to be amongst the cheapest in the world (Eberhard, Leigland, & Kolker, 2014). This prompted no-new builds for almost 20 years since the commissioning of the Kendal power station in 1988 (Scholvin, 2014). The energy policy that has then followed in SA has seemed to follow this complex and has created path-dependent outcomes. The definition of path dependence is: The idea that decisions we are faced with depend on past knowledge trajectory and decisions made, and are thus limited by the current competence base. In other words, history matters for current decision-making situations and has a strong influence on strategic planning. Competences that have been built in the past define the option range for today’s moves. New business opportunities, in particular those based on technological progress, emerge gradually as a consequence of competencies acquired prior to new discoveries and over time (Financial Times, 2015). Scholvin (2014) describes SA’s path dependency as something that is extremely difficult to alter at a later point in time because it has large infrastructure in pre-determined geographical spaces as a result of past energy policies which were based on the abundant coal resources. Changing the landscape of the South African energy space and therefore meeting shortages in supply requires policy changes. It also requires new policies altogether. This needs to
  • 38. 30 | P a g e encompass managing the expansion of coal, regional cooperation on gas reserves (Mozambique) and hydropower (Democratic Republic of Congo), a nuclear build- up programme and renewable energy development to achieve energy security (Scholvin, 2014). 3.3.6 A vision of future technological trends Decentralised and Centralised energy supply systems The current trend in the energy sector is seeing the continued investment in fossil fuels but with rising interest and investment in green technologies due to global environmental policies being enacted. As a result of this, renewables are being added to grids but depending on scale and location they also operate in isolation. This decentralisation is a new trend that has become associated with renewable technologies. A discussion on decentralised and centralised energy supply systems follows. Building an energy supply system requires intense planning as to what type of system is to be installed. This analyses has become increasingly important since the advent of commercial alternative energies. Alternative energies are being introduced as a means of reducing the carbon dioxide emissions. According to Droste-Franke et al (2009) a substantial change in many of the world’s current energy systems will see a move from a centralised energy structure to a more decentralised structure. Furthermore it is highlighted by Gullí (2006) that the world is already seeing restructuring and privatisation of the electricity and gas industries where traditional large firms are being abandoned. An example of this, is the policy that has been adopted by the UK, the UK climate change Act, which is legally binding and stipulates an 80% reduction in greenhouse gas emissions by 2050 as compared to 1990 levels (Chmutina, Wiersma, Goodier, & Devine-wright, 2014). One of the avenues for reducing emissions is via a decentralised energy system. Decentralised energy systems are not only driven by societies attempt to reduce emissions but by societies attempts to be more politically, socially and economically innovative (Chmutina & Goodier, 2014). Distributed generation means that a more diverse mix of energy sources is included such as renewables in order to have a more secure supply. How can distributed generation be more secure? One of the arguing factors is due to the locality of power generation. Smaller power technologies are beginning to perform better than ever before and are generally located closer to the point of consumption (Chmutina & Goodier, 2014). This locality reduces waste, making it more secure and more suited in supply of becoming ‘useful energy’ (Droste-Franke et al., 2009). Feizollahi, Costley, Ahmed and Grijalva (2015) state that decentralised systems are a compelling alternative to centralised systems, one of the reasons for this is due to the software systems being able to manage smaller
  • 39. 31 | P a g e problems more effectively. The level of decentralisation will affect the technology and software employed. Energy supply systems have been categorised by Regina de Casas Castro Marins (2014) as regional, district and building-scale. Regional systems are high capacity systems which include large-scale power plants with big hardware requirements and are classified as centralised. These have been traditionally the energy supply system of choice across the world and according to Bouffard and Kirschen (2008) are more vulnerable due to disturbances in the supply chain, additionally they are beginning to be seen as less popular due to other aggravating factors such as their dependence on fossil fuels. District systems are located close to the urban environment and building-scale are located within the urban environment. These systems are far more decentralised and are required to be extremely efficient to remain competitive due to their lower capacity. Planning is essential in the design of decentralised systems as the level of ‘useful energy’ (Droste-Franke et al., 2009) must be determined so that there is limited waste and spend on overcapacity. As stated by Regina de Casas Castro Marins (2014, p. 136) “the installed capacity (CIE) is designed according to the total electricity (CE) required in the buildings, and the rejected heat is assumed to meet the heating and cooling demand via a district heating network.” On the point of heat, it is important to realise the diversity of possible decentralised systems. Not all systems may be required to produce electricity as stated, “The primary electrical renewable technologies for on-site use are photovoltaics, wind and hydro” (Wolfe, 2008, p. 4510). Different energies can be used with the sole purpose of producing energy/heat such as the use of biological processes in converting biomass. This once again highlights the role of identifying what is the ‘useful energy’ required at the point of consumption when determining the type of decentralised/microgeneration system. Centralised systems were originally developed on the basis of fossil fuels as the source of energy. Hence the locations of the large-scale plants being placed close in proximity to the resource (Droste-Franke et al., 2009). Extensive grid networks are then required to transport the power to places of consumption. This is how the South African power system is designed, “large power stations that are concentrated in the interior of the country near the mines and industries of Gauteng province, and long transmission lines down to coastal areas.” (Eberhard et al., 2014). Allan, Eromenko, Gilmartin, Kockar and McGregor (2015) claim that 6.5% of generated electricity is lost when distributed to consumers causing costs to rise. The need for more infrastructure is also costly and so the case is made for placing power supply closer to the point of use. Those that fall into places where there is limited demand may cause the
  • 40. 32 | P a g e economic distance limit (EDL) of grid extension to be reached. The EDL is compared to the life cycle cost (LCC) of an alternative energy and if the LCC is cheaper, a case can be made for investing in a micro-generative alternative energy source (Mahapatra & Dasappa, 2012). The challenge for existing centralised infrastructure is its need to adapt not in isolation of the new sources of energy but to allow feed-in. It is expected that initially decentralised units will be installed in isolation but as these alternative forms of energy become more efficient and create an excess supply, producers will be looking to existing networks to dispatch this power. Existing networks are primarily centralised and the production of on-site energy will have new requirements on centralised networks such as software systems to manage the flow of electricity both ways and the hardware infrastructure to support such a design. Wolfe (2008) states that stability management in decentralised networks will be the biggest issue as size and direction of power flows will be less predictable. See Figure 12 for an example of a conventional electricity distribution network and an electricity distribution network with distributed generation. 3.3.7 Identification of actions supporting the development of desired technologies Desired technologies would almost entirely be those that are low carbon dioxide-emitting whilst able to provide secure and sustainable energy. As explained earlier each of the technologies in this study warrant clear benefits as well as disadvantages, none of them are sufficient enough in their own capacity to provide a competitive and sustainable solution. This has been realised by many governments and international organisations around the world. Based on that conclusion policies have been ushered in to introduce cleaner, safer and more secure whole energy supply systems. Policymakers have realised that renewables can achieve a number of goals beyond energy security and environmental well-being. These include reducing the health effects of burning dirty fossil fuels and creating opportunities for education, jobs and rural economic development. This positive thinking is shown in Figure 15 below where a staggering large amount of countries (138) had renewable energy support policies in place by 2014 (Renewable Energy Policy Network for the 21st Century, 2014).
  • 41. 33 | P a g e Figure 15: Countries with renewable energy policies, early 2014 Source: (Renewable Energy Policy Network for the 21st Century, 2014) Policies can also only do so much. At the end of 2013, eight out of twelve countries that had renewable energy targets failed to meet their targets by year’s end (Renewable Energy Policy Network for the 21st Century, 2014). One of the reasons for this is usually due to financing issues. This however is not exclusive to renewable energy policies. In cases where there is finance available for fossil fuel projects deadlines are also missed. This is because energy investments in general are subject to lengthy processes; delays are most likely in cases where projects involve areas that are socially and environmentally sensitive (International Energy Agency, 2014c). The messages received from the public all over the world are in abundance and often conflicting. In the case of renewables there has been a backlash against the cost of subsidies to renewables as well as the multiple cases of “NIMBYism”. In the case of other energy technologies there are numerous activists that are opposed to fracking, nuclear, CCS scepticism and even coal-fired plants. This has caused a lot of back and forth for policy makers who are the first step in implementing the development of desired technologies. The renewable energy sector in SA is young but vibrant. The National Development Plan (NDP) has proposed to build up the country’s renewable energy supply to account for 9% of its electricity supply by 2030 (WWF, 2015). This was launched in 2011 under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) by the Department of Energy. The programme is a tender process consisting of rounds where the most competitive bids are awarded a 20 year power purchase agreement with Eskom. The National Treasury has
  • 42. 34 | P a g e fully underwritten the power purchase agreements. The bids involve solar, wind, hydro and other small-scale renewable technologies that will be fed into the national grid (Boulle, Cuncliffe, & Boyd, 2015). This programme has been identified as a key action that supports the development of desired technologies. The plan is to rollout 17 800MW up to the year 2030 and so far already 1500MW has come online in over 32 different projects (Creamer, 2015). These projects are spread over a variety of technologies with the bulk going towards wind, solar, hydro and biomass as seen in the table below. Table 4: Summarised results for REIPPPP Windows 1, 2 and 3 Window 1 Wind PV CSP Hydro Biomass Biogas Landfill Total Capacity offered (MW) 1850 1450 200 75 12.5 12.5 25 3625 Capacity awarded (MW) 634 631.5 150 0 0 0 0 1415.5 Total investment (ZAR mill) 13312 23115 11365 0 0 0 0 47792 Window 2 Capacity offered (MW) 650 450 50 75 12.5 12.5 25 1275 Capacity awarded (MW) 562.5 417.1 5 14.3 0 0 0 1043.9 Total investment (ZAR mill) 10897 12048 4483 631 0 0 0 28059 Window 3 Capacity offered (MW) 654 401 200 121 60 12 25 1473 Capacity awarded (MW) 787 435 200 0 16 0 18 1456 Total investment (ZAR mill) 16969 8145 17949 0 1061 0 288 120263 Source: (Eberhard et al., 2014)
  • 43. 35 | P a g e 4. CONCLUSION Technology development is of great significance and is a major driver in any economy. A lot of time is spent innovating and inventing so that one day a product can be put out into the market which not only does great for itself but is hugely beneficial for its environment. These benefits are enablers to the economy and can help spur on the development in fields completely unrelated. It is no wonder why such large investments are made in research and development by many governments as it can, and often does, yield great results for the economy at large. Research and development does not always have the capitalist intent at heart, it can be driven by pressing needs that are facing society. In this context the pressing need is the threat of our finite resources not meeting the energy demands of the future and the current use of them emitting carbon dioxide which could cause drastic climate change. Finding global solutions to these problems encompasses an array of factors and in order to determine the direction organisations and countries should take in addressing these problems foresight studies must be done. More importantly, country-specific foresight needs to be done. In this case the solution lies in energy technologies, yet knowing which one or which array can help us requires intense investigation. These investigations need to delve deep into the current state of technologies and then determine what their trajectory for development can be within a specific context. Understanding the mix of technologies available, their opportunity for improvement and ability for viable adoption can provide the powers that be with the knowledge to make the right choices in energy technology decisions. We have mature fossil fuel and nuclear technologies which, as explained, have large room for improvement through improved efficiencies, cleaner burning processes and exploring CCS. These technologies are vital to modern day man and without them the opportunity for development in other technologies would not be possible. The software and orgware of fossil-fuelled technologies are deeply embedded in the hardware which are widely used due to their ability to provide base load power. Base load power has to be secure and continuous but the technologies that can supply this have waning social acceptance levels due to their emissions. These technologies are also largely centralised due to the ability of their established strong hardware element. The decreasing levels of social acceptance and the green policies coming through have opened the door for renewables which can provide both centralised and decentralised power. The security of supply is however impeding their growth as all three elements of these technologies are fairly new (except in the case of hydro). This makes it harder for them to breakthrough in economies that are energy hungry. The market acceptance however is generally high and so there is a strong need to map
  • 44. 36 | P a g e the future of these technologies alongside their fossil fuel counterparts so that the correct levels of attention in research & development and investment flows toward them.
  • 45. 37 | P a g e 5. RESEARCH METHODOLOGY 5.1 Research Approach and Strategy The aim of this research is to determine the trajectory of current energy technologies in SA and what sort of presence they will have 20 to 30 years from now. The research is qualitative inductive and descriptive-predictive in nature. It therefore aims to reach a result based on theoretical insights (Bryman & Bell, 2007). Reaching a result requires inductive reasoning whereby there are no assumptions and only observations, conclusions are then drawn from the observations (Leedy & Ormond, 2010). Initially the research takes on a descriptive approach as all the research propositions were developed from existing literature and reports. According to Cooper and Schindler (1998) descriptive research is applied to determine the reality of a topic through the formation of hypotheses about the existence of a variable. Since the study is foresight oriented, the research propositions that were formulated are then used in a predictive way. According to Adams, Khan, Raeside and White (2007, p. 21) predictive research “is an attempt not only to explain behaviour but to predict future behaviour given a change in any of the explanatory variables relevant to a particular phenomenon.” They then further explain that if we are able to understand physical or human phenomena, we will end up being in a much better position to predict future paths, this type of research is very important to governments in the design and application of policy. It is clear that this approach fits well with the proposed research topic as energy is a key aspect of market-wide planning that has to be done at the national levels. A common technique specifically used in foresight studies is the Delphi method. Certain aspects of the Delphi method have been implemented in this research. Following is a concise explanation of the Delphi method; The Delphi method is particularly used in matters concerning science and technology that should be achieved in the future (Martin G. Moehrle et al., 2013). The Delphi method was first successfully used in 1971 by the Japanese and has been conducted every five years since then. The forecast of the fax machine is one such example of success using the Delphi method. Cuhls states: The basic idea of a Delphi survey is to interview experts on a set of topics (the case presented here deals with major discoveries, technical innovations or a large diffusion of technologies). The set of topics can be generated by the experts themselves or from elsewhere. The aim is not only to collect the rough opinions of experts on certain future-
  • 46. 38 | P a g e oriented topics, but also to get each expert to react to the general opinion of his peers (2001, p. 555). Kanama (2013, p. 154) confirms the proposed timeline for predictions as well as the use of experts in this study, “The Delphi method usually forecasts technology trends in 20–30 years’ time. Normally, the only source that can be relied on for making a forecast for such a long- term span is said to be the opinions of specialists in each field”. For this study the aspects of the Delphi method used were:  The use of experts in the fields of various energy technologies.  The set of topics were generated through the themes of the literature review.  Forecasting of 20-30 years from now. Another method of doing research in technology foresight is roadmapping. Roadmapping is: The creation of a roadmap begins from the establishment of the concept. The issues are gradually broken down and linked to the element technology topics necessary to achieve the projected timing of realization of a technology (Kanama, 2013, p. 158). There are 3 major reasons for performing technology roadmapping (Kanama, 2013, p. 156):  “First, because of the rapid increase in technological complexity and diversification of market needs, it has become necessary to grasp technological trends and market needs strategically based on technology foresight”  “Second, due to the increasing complexity of technology in recent years, it is more difficult to conduct all R&D in only one company or one country”  “Third, recent global competition in creating innovation now requires clear cost- effectiveness in R&D investments” The roadmapping method is more qualitative than quantitative, while the Delphi method uses statistical techniques to quantify forecasts. The roadmap is able to predict technological difficulty and global competitiveness of each element but it is difficult to measure empirically and quantitatively whereas the Delphi can. Kanama therefore states: The accuracy of the results depends on the scale of the survey and the number of respondents. However, with Delphi results, it is difficult to grasp the connection of the technological topics or the future vision of the society that those technologies will create (2013, p. 159).
  • 47. 39 | P a g e Roadmapping therefore requires semi-structured interviews to obtain the qualitative data such as “R&D targets, an image of society, a vision of the future, and concepts.” (Kanama, 2013, p. 158). For this study an integration of the Delphi technique along with roadmapping was done so that a fuller picture could be achieved. Kanama (2013) suggests that such an integration is possible and more accurate as long as technology foresight takes advantage of the strengths of both methods. 5.2 Research Design, Data Collection Methods and Research Instruments Unfortunately for this study the possibility of obtaining surveys from thousands of experts was limited due to resources and time. Instead a handful of energy technology experts were selected and certain aspects of the Delphi method were applied along with the roadmapping technique which involved the semi-structured interview. Interviews were conducted individually and interviewees were sent the interview guide with its outline of questions prior to the actual interview so that they could prepare their answers accordingly. This enabled the participants to prepare which allowed the discussion to be more direct and focused on the topics that are of interest and relevance to the research report. All interviews were recorded so that they could be fully transcribed and then coded. Designing a questionnaire guide required looking at aspects of the Delphi and roadmapping techniques and replicating what was possible within the limitations of the study. Aspects of the Delphi technique are explained; According to Ludwig (1997) participants in a Delphi agree to receive and respond to a series of questionnaires, usually at least three different rounds are used. The rounds are used to so that a level of consensus is able to be achieved. Due to limitations in this study a real Delphi could not be undergone but using the semi-structured interview technique allowed a dialogue where the researcher could direct the participants towards a level of consensus which is representative in the Delphi technique. Designing a semi-structured interview guide requires an understanding of this research instrument. Adams et al. (2007) states that in a semi-structured interview there is a ‘road-map’ of questions to be asked which guides the interview but allows further probing questions to gather rich data. These probing questions were the tools for directing participants towards a level of consensus. This consensus was reached just as in the Delphi method. Ensuring the correct qualitative data was derived that enabled the roadmapping aspect of this research, four
  • 48. 40 | P a g e criteria provided by Merton and Kendall (1946) as cited in Flick (2011, p. 112) were used in the formulation of the interview guide :  Non-direction in relation with the interviewee  Specificity of the views and definition of the situation from their point of view  Covering a broad range of meanings of the issue  The depth and personal context shown by the interviewee The first point was followed initially so that a simple dialogue began. These questions are there to initiate dialogue (Flick, 2011). The second point was carried out by not having a list of possible answers but rather allowing the participants to freely give their own point of view on defined situations. The participants were then probed on topics once a broad range of meanings of the issue in the question were covered. The probing also included looking for depth and insight in personal context/experience so that topics such as; “R&D targets, an image of society, a vision of the future, and concepts” (Kanama, 2013, p. 158) that normally cannot be covered empirically are properly addressed. These questions were then asked in a way assuming there is an inter-relationship between the themes of research. This prompting of participants enabled them to be more direct in their answers, further enhancing the quality and richness of the data. The reason for doing this was to mitigate biases from using a small sample of semi-structured interviews for data collection. 5.3 Sampling The sample method that was used was the purposive method. A non-probability sample was chosen according to certain criteria. The criteria was set by the judgement sampling technique (Adams et al., 2007). This technique ensured that participants were selected based on their attributes. According to Ludwig (1997) randomly selecting participants is not acceptable. Instead for this research, accreditation, experience and qualifications were identified so that an adequate nomination process was used to select participants who are then deemed experts in the energies sector. Six industry experts were selected for this study:
  • 49. 41 | P a g e Table 5: Participants interviewed Participant Qualification Position Expertise Experience (years) Reference key with Atlas.ti 1 29/10/2015 MPhil Energy and Development Studies, Energy Research Centre, University of Cape Town (2013), BSc and BSc Honours, Geography, Rhodes University (2007 & 8) Researcher at the Energy Research Centre: Energy, environment and climate change Climate change, mitigation and development 7 P1 2 02/11/2015 Professor (MIT) 1. Cape Peninsula University of Technology, 2. Industrial & Petrochemical Consultants Energy, petroleum industry, mining industry, extractive metallurgy, climate change 50 P2 3 03/11/2015 MSc Bioprocess Engineering (UCT), PhD Chemical engineering and Biotechnology (Cambridge) Director at a waste to energy plant building business. Waste to energy, Biomass, gas, feed business, algae growth and manufacture, solar (PV). 3 P3 4 04/11/2015 MBA (Oxford) CEO of a solar business Financial modelling, Solar 15 P4 5 04/11/2015 BSc and MSc Electrical Engineering (Wits) Senior Researcher at the Energy Research Centre, University of Cape Town working primarily in policy analysis in energy, socio-economy and environment. Energy policy analysis, public interest policy advocacy, energy planning, public and private sector company management, project management, research and teaching 32 P5 6 18/11/2015 Professor, BSc (Chem Eng.) Cape Town BA UNISA PhD Edinburgh Director of the Management Programme in Infrastructure Reform and Regulation Management, restructuring and regulation of network/infrastructu re industries. 33 P6