Value measurement analysis of energy tradeoffs in South Africa

South Africa (SA) is facing multiple energy challenges. Current infrastructure is aging, population is growing, industry is expanding, and the level of development is increasing. In addition, existing energy practices depend heavily on coal, are environmentally unsustainable and conflict with international climate change mitigation polices. Therefore, in the near future SA must replace, expand and transform its energy portfolio. This study considers three main thermal electric generation technologies as the most viable options of this energy transition: improved coal power plants that implement best practices, natural gas fired power plants that utilize imported gas from Botswana and Mozambique, or natural gas power plants that utilize domestic shale gas from the Karoo region. It is unlikely that either natural gas option will fulfill all future electricity requirements. Therefore, where possible, this study seeks to evaluate the most favorable replacement of coal. Within the shale gas alternative, this study performs a comparative analysis of three water scenarios for hydraulic fracking; either water is sourced from local groundwater aquifers, from seawater about 300km from the fracking site or from coal mine waste in the Mpumalanga region, about 1000km from the fracking site. Multiple environmental, social and economic criteria are incorporated in the analysis with respect to multiple decision makers in a stochastic value measurement approach to identify the applicability of this method in providing decision support for guiding environmental and energy policy interventions in SA. The value measurement analysis performed has a stochastic variation of the value function as well as a stochastic exploration of preferences from decision makers. Furthermore, this study models different decision makers with distinct attribute weights, reflecting the perspectives of a neutral decision maker, a water activist, a global warming activist, a bean counter and a social-focused decision maker. A key result is that coal is the least desirable option regardless of cost because of its high environmental impact across almost all categories. In addition, the imported gas alternative is consistently preferred by decision makers because of the .advantage. that environmental impacts that occur outside SA borders are not accounted for in policy regulations. With respect to fracking alternatives, transporting mine waste for hydraulic fracturing is the least viable alternative because of the high cost and impact of transportation as well as the higher risk of contamination due to the use of lower quality water. The seawater and groundwater alternative were equally competitive because of the unresolved tradeoff of water use vs. risk of aquifer contamination.