Moneyweb
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5 minute read
22 Apr 2022
5:50 am

Load shedding all but a certainty until these things happen …

Moneyweb

Government needs to shake itself out of complacency.

Picture: iStock

On Wednesday, Eskom CEO Andre de Ruyter made (or, rather, repeated) a rather frank admission: “We need to face up to the facts,” he said.

“To expect the Eskom coal-fired fleet to return to its former glory of 80% or 85% EAF [energy availability factor] is going to be very difficult to achieve and will cost an extraordinary amount of money, time and effort which will probably be better directed at unlocking the grid as quickly as possible to new generation technologies that we can then make available to address the shortfall in generation capacity on a comprehensive basis.”

The current shortfall was quantified by De Ruyter as between 4 000 megawatts (MW) and 6 000MW to “address” the risk of load shedding.

This is the stark reality facing the country between now and 2026.

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The utility’s own medium-term system adequacy outlook published in October says plainly that “it can be observed that, at current EAF levels of 63% calendar year to date, capacity of between 2 000MW and 3 000MW is required between 2022 and 2024, while the last two years require capacity of between six and seven Medupi [Power Station] units”. In 2025 and 2026, the shortfall is 4 000MW and 5 000MW respectively.

This is an enormous gap.

Government’s integrated resource plan – the policy that dictates the country’s energy mix, which was last updated in 2019 – assumes that Eskom’s coal fleet will be able to attain an average EAF of 75% by 2030.

De Ruyter has reiterated that Eskom is “of the view that we will really struggle to get back to 75% on a sustained basis”.

“This is not because we don’t want to. It is because we have an ageing fleet that has had a very hard life and that requires very extensive and expensive maintenance programmes to keep them operating.”

De Ruyter says Eskom’s targeted EAF is 70%.

For the first 15 weeks of this year, its EAF has averaged 58.8%.

Rapid transition needed

De Ruyter says Eskom is “of the view that rapidly transitioning to a cleaner and greener generation footprint by allowing substantial new investment to take place in new wind, solar as well as some natural gas … will play a meaningful role in reducing the risk to the electricity supply system in SA going forward”.

The reality is that Eskom’s coal fleet is creaking and the shortfall is our reality.

This shortfall and the unreliable coal fleet means load shedding will be a regular occurrence until government admits there is a problem and begins to act with some urgency.

Urgency?

There simply is none.

As Professor Anton Eberhard of the University of Cape Town’s Graduate School of Business has pointed out, Minister of Mineral Resources and Energy Gwede Mantashe has not added a single publicly procured megawatt to the grid since his appointment in 2019.

It is not clear that those in power understand the severity of this crisis, or comprehend that Eskom is not going to get its EAF much higher than 65% in the medium term.

ALSO READ: Latest load shedding crisis should be treated like cry for help

Quick wins

There are some quick wins:

  • Update the integrated resource plan. It desperately needs updating. The existing IRP (2019) somehow still sees two new coal-fired plants totalling 1 500MW coming online in 2023 and 2027 (750MW each). No one will finance these and it is not realistic to assume that a single new megawatt of coal generation will be added in this country.
  • Accelerate the procurement of renewable energy. The sixth bid window under government’s Renewable Energy Independent Power Producers Programme (Reippp) opened earlier this month and seeks to add 1 600MW of onshore wind and 1 000MW of solar photovoltaic (PV) generation to the grid. This is not enough. We could procure 5 gigawatts (GW) of capacity in this round and it wouldn’t be sufficient.
  • Figure out the storage solution (linked to both of the above items). Solar photovoltaic plants, in particular, are not at all useful during the evening peak, so a storage element needs to be implemented. Battery technology has advanced dramatically. Eskom will construct the first phase of its BESS (battery energy storage systems) project financed by the World Bank, African Development Bank and New Development Bank (‘Brics Bank’) – but contracts have not yet been awarded for the R5 billion 199MW first phase. This is too slow! The IRP sees 513MW of energy storage coming online this year and 1 575MW in 2029. Neither figure is realistic or sufficient. We need more, and quickly. Additional pumped storage schemes ought to be considered.
  • Make it simpler for those who generate under 100MW to register with energy regulator Nersa. This is an unnecessary bottleneck causing damaging delays. While substantial plans have been announced by large power users, primarily mines, the registration process is reportedly painfully inefficient. Sibanye-Stillwater, Anglo American (and its subsidiaries), Impala Platinum and others have all announced plans to build renewable energy generation capacity or procure this from third-party operators. ArcelorMittal says it plans to develop two 100MW renewable energy plants in the Western Cape and Gauteng to supply its plants. Much of this capacity will take one to three years to come online. ArcelorMittal’s plants are expected to be complete by 2025. This will all help, although some of it is still some way off.
  • Unlock the R131 billion ($8.5 billion) in funding committed at COP26 to support the transition from coal to renewable energy sources. Last we heard is that we’ll have further details “imminently”. More urgency, please!

This problem is not going to be solved with horrendously expensive 20-year-long powership contracts.

This article originally appeared on Moneyweb and has been republished with permission.