Load shedding all but a certainty until these things happen …

Government needs to shake itself out of complacency.
Resources would be ‘better directed at unlocking the grid as quickly as possible to new generation technologies’, says Eskom’s CEO. Image: Dean Hutton/Bloomberg

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.

Read:

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.

Ugency?

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.

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.

Listen to Ryk van Niekerk’s interview with RMB CEO James Formby (or read the transcript here):

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Incorrect sub-title from the get-go!!!

Government needs to be shaken out of power, without this happening there is no future for SA as a whole!

Complacency is that state where there minds and capabilities are permanently entrenched, it is not possible for them to rise above that state!

Well, except when it comes to looting the Country’s coffers!

Correct, this ANC govt will always be running behind the facts, and change, adapt too slowly to the massive challenges we face.
Still as a whole not a bad article.
Anton Eberhard wrote also his own article: https://www.businesslive.co.za/bd/opinion/2022-04-21-anton-eberhard-sa-still-needs-eskom-but-also-new-generation-capacity/
This editorial mentions also correctly that the main issue with the powerships is the duration of the contract, and that they don’t make any financial, economic sense, besides the environmental and legal challenges to the plan, which were solely mentioned in a Bloomberg article earlier this week.
https://www.moneyweb.co.za/news/industry/floating-powerships-expand-globally-as-south-african-plans-stall/
Besides that we need less bureaucracy, far more urgency, scrap localisation, there are many, many more innovative and creative ideas how to improve energy generation, grid stability and keep 220V AC 50 Hz from our sockets affordable and reliable. At least new for bottom of barrel backward SA.
Geez, we are really limping behind.
Could write a lengthy article about it.

I remember reading an article years ago from RW Johnson were he said the only way out for Eskom is to go to the IMF and borrow the money, but the ANC won’t because it shows they have failed and with the loan they would have to at least cut staff numbers by half & they not prepared to do that I would like to see the numbers of people been retrenched in the last financial year & what increases they getting this year, its passed the tipping point in my opinion & will just keep sucking the lifeline out of South Africa.

TheVale, I am starting to suspect that Sensei is RW Johnson, so careful when quoting him:):):) and stay tuned!:)

Only joking, if you’re not, Sensei,but keep ’em coming, thanks.

To think that the people that caused these problems can somehow fix them is totally delusional.!!

We haven’t got a governing party in South Africa. What we do have is a loose affiliation of egocentric highwaymen and looters, parading as leaders, who represent the interests of “our people”. “Our people” have to be extremely naive and ignorant to fall for this charade.

Besides the fact that leading ANC figures are grossly incompetent, out of their depth, negligent, and intellectually challenged, they also act solely upon the counterproductive and regressive incentives of a collectivist system. Where the market economy is built upon serving consumers, the socialist system incentivizes and rewards the most unscrupulous individuals in the community to exploit those consumers and citizens. Socialism is capitalism in reverse. It is not an alternative to capitalism. It is the antithesis of capitalism. The implosion of service delivery, the bankruptcy of SOEs and municipalities, and the evidence before the Zondo Commission prove this point.

When political power depends on the support of labour unions and communist party members, the economy is doomed, and it is game over for the youth who bear the brunt of the ensuing unemployment disaster and economic decay. ANC voters basically pawn the future of their children, their food, and housing, to subsidize the exorbitant salaries, bonuses, and pension funds of members of labour unions. The ANC robs “our people” to bribe unionized voters at bankrupt SOEs and municipalities. This is the “redistribution” they profess to deliver.

It basically comes down to this – If the ANC allows alternative sources to generate an abundance of clean energy, the ANC will sign its own death sentence because it will lose the support of labour unions who depend on the salaried positions of useless ESKOM workers. Luthuli House, and the economy, are captured by lousy labour unions. Luthuli House has abdicated its position in favour of Cosatu. Ramaphosa is not the president, Sdumo Dlamini is.

This is how a nation consumes its own future through the transfer wealth from the youth to the politically-connected elite. It is time for “our people” to wake up to the fact that they are using the ANC to steal from themselves.

Some glaring questions and observations from your virtue signalling speech.

You have not really delivered on anything at all and this behemoth utility continues to deteriorate. Why set consistently lower targets that you fail to achieve anyway. EAF at 58% for the year but basing plans on getting to 65/70% is not realistic in the environment you are in.

You are right we do need to face up to the facts and the stark realities of THIS environment you are forced to function in. You pay lip service to just about everything in the room, with the exception of the giant elephant and the root cause of your problems. Corruption, fraud, industrial scale theft, sabotage, poor quality coal, contract enforcement and shocking logistics management.

Your speech almost sounds like a capitulation and caving to the obvious massive nefarious forces at work within ESKOM – does this not encourage more of the same crippling behaviour – when the CEO is throwing his hands up in the air?

Your list of quick wins are anything but, in this current political environment. Remind me again how far behind Medupi and Kusile and how far over budget. You are obviously aware than any capital projects in South Africa attract the usual suspects and vultures. Gautrain, Coega Port and manganese terminal(now discontinued) – all ended up the same way – way behind schedule and budgets that were tripled or worse – or like your own Medupi and Kusile and our supposed world class export manganese export terminal – dysfunctional.

All the quick wins assume a willing and fleet footed partner in government… ESKOM is the glue that is keeping the ruling elite in power and as such i expect everything related to multi billion rand projects, to be dragged out for years longer than they need to and way over budget – so the necessary rubber stamping by layers and layers of unnecessary red tape – guarantees a hungry army of shadows is sated accordingly… essentially factions fighting over spoils.

I assure you that those in power do VERY MUCH understand the severity of this. It is from this enforced chaos that they reap the largest rewards. After all they are whisked through gridlocked roads in blue light convoys and their homes suffer barely a flicker when the automated generators kick in and run with diesel delivered by the tax payer.

Try and fix what we have – and start with the basics – real security and real enforcement of law with regards your daily operations and consumables. Stop trying to “ascend” to first world ideals – we are third world. Ask western Europe and the UK how their COP26 ideals are working out for them in our current global energy crisis.

I would liked to have seen an expert analysis and estimation of how much the current EAF could be increased, in the absence of operational/ consumables – interference and “inefficiencies”. Tackle this problem and i believe your base coal load would quite quickly achieve 75%+. Is ignoring the real problem, not just endorsing it – and risking setting off a free for all – if there was not one already in progress?

Based on my 25 years in power generation I’ve decided that the only course of action is to go off grid. Positive & self reliant action…

Did that a while ago — Best peace of mind I ever bought !!!
Eskom is well past the point of no return in my opinion !!

End of comments.

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