South Africa needs 16,000MW of new power generation capacity by 2030, but the government has not procured a single megawatt of additional power.
Over the past week South Africa experienced its latest bout of load-shedding. This time it was blamed on heavy rains which caused problems feeding coal to boilers at the Medupi power station. While the reasons for load-shedding differ from week to week, the underlying problem remains the same – there is not enough electricity generation to meet the demand from customers.
Bad news for South Africans is that the situation is set to get much worse unless immediate and decisive action is taken. Even Eskom CEO André de Ruyter warned that the country has “some real challenges” in terms of electricity generation capacity.
In a recent presentation, De Ruyter explained South Africa has an installed generation capacity of 46,000MW. Of this 46,000MW, around 11,000MW is unavailable at any given time because of unplanned maintenance. These outages are caused by the unreliability of the generation fleet. Another 5,000MW is offline because of planned maintenance, while various other problems take out 2,000MW more.
Effectively, of the 46,000MW installed capacity there is only 28,000MW available to South African electricity users.
In terms of the country’s Integrated Resource Plan (IRP2019), Eskom is going to retire about 10,000MW over the next decade.
“That leaves us with a very significant shortfall of 16,000MW which needs to be supplemented urgently,” said De Ruyter.
To address this shortfall Minister of Mineral Resources and Energy, Gwede Mantashe is punting new coal and nuclear generation plants. This is misguided.
De Ruyter explained the timeline in which the new generation capacity must be procured is forcing the country’s hand in terms of which technologies to use. There are only three options which have an average built time quick enough to provide the additional power we need by 2030 – solar, wind, and natural gas. Coal and nuclear, which have a build time of between 10 and 15 years, can be discounted in the short and medium term because they will not be able to come online by 2030. De Ruyter believes natural gas offers a particularly compelling case to bring new capacity online quickly. “We would really like to explore what opportunities there are for us to repurpose some of our existing coal-fired power stations to natural gas, as there is a significant cost saving associated with it,” he said.
The Eskom CEO said they “strongly support all efforts to bring additional capacity onto the grid”.
Eskom is even willing to open up its network and work with independent electricity suppliers to add additional capacity to the grid.
Recent research by energy expert Chris Yelland found that there is currently 5,000MW which can be added to the grid, which can go a long way to stave off load-shedding.
It is, however, not up to Eskom to procure new capacity. The government, through the Department of Mineral Resources and Energy, is in charge of this process.
There are plans to bring 13,800MW of new generation capacity online, of which 2,000MW are planned to be available by June 2020.
De Ruyter believes even more capacity is required to bridge the gap between electricity supply and demand.
This is where the private sector can help, but there is a problem. Mantashe and the Department of Mineral Resources and Energy is not doing what needs to be done to make this happen.
A regulatory change is needed to lift restrictions on licensing large electricity generation projects, which the minister is not doing.
Yelland highlighted that the requirements for a 1MW system is currently the same as for a 4,000MW system. “The licensing requirements are completely inappropriate,” Yelland said. Another problem is that the government has not procured a single megawatt of power in recent years despite the pressing shortage.
“Not one kilowatt of new generation capacity has been procured since the Integrated Resource Plan for electricity was published in November 2019,” Yelland said. “None of these procurements – if they are procured and when they are procured – are going to come onstream in less than two to three years.”
South Africa is therefore facing a prolonged energy shortage and it will be up to households and businesses to look after their own energy future.
“People need to become part of the solution by installing solar solutions or buy generators to supplement Eskom power,” he said.
Not the first time Eskom warned the government
Eskom is clearly raising the red flags about the state of South Africa’s energy supply, but the government does not seem to listen.
If this situation sounds familiar, it is because it resembles the warning to the Department of Minerals and Energy in 1998.
A white paper on the energy policy outlined the state of South Africa’s energy sector at the time which stated “the present generation capacity surplus will be fully utilised by about 2007”.
The government shrugged off this warning, and as predicted electricity demand exceeded supply in 2007. Eskom was forced to implement load-shedding for the first time ever in South Africa to prevent a national blackout.
After load-shedding hit, former President Thabo Mbeki admitted “We were wrong. Eskom was right”.
This apology did nothing to resolve the energy crisis in South Africa and the country experienced increasingly serious blackouts over the years.
The last three years were particularly damaging.
In 2018 there was 15 days of load-shedding during which 812,205MWh were shed. This increased to 36 days and 494,759MWh in 2019 and to 52 days and over 1,260,000MWh in 2020.
It is clear that Eskom alone will not be able to resolve the country’s power problems. It needs help from the private sector.
Unless the government realises the seriousness of the situation and encourages private power production by easing licensing requirements, the country is facing a dark future.
