South Africa asks industry for options to end power crisis

Ramaphosa calls emergency cabinet meeting.
President Cyril Ramaphosa. Image: Moneyweb

South Africa’s government on Friday asked industry for the cheapest and quickest options to ease a power crunch, as cabinet held an emergency meeting to try and resolve a crisis threatening growth in Africa’s most industrialised economy.

President Cyril Ramaphosa called the meeting after struggling state utility Eskom implemented the most extensive power cuts in more than a decade earlier this week, disrupting supply to businesses and households.

Read: Wind power could help solve SA’s energy crisis 

Eskom, which cut power for a ninth straight day on Friday, is choking under a massive R450 billion debt burden and struggles to meet demand because its creaking coal-fired power stations haven’t been maintained properly.

It says the country desperately needs an additional 5 000 megawatts (MW) of generating capacity.

The energy ministry published a document on Friday requesting information from the power industry on options for between 2 000 MW and 3 000 MW of new capacity at least cost.

Firms are to reply by the end of January and present options that could be connected to the grid within three to six months or six to 12 months, if they are selected in a procurement process, the document showed.

Ramaphosa had said on Wednesday that Energy Minister Gwede Mantashe and Public Enterprises Minister Pravin Gordhan would present proposals on solving the crisis to the cabinet meeting, after the outages forced some miners to temporarily cut output early this week.

The power crisis is one of the biggest challenges for the former trade union leader turned millionaire businessman who has promised to fix ailing state firms and reverse years of mismanagement and stagnation.

But he has found it hard to overhaul Eskom and lift the country’s growth rate due to entrenched opposition to his reforms. Another struggling state firm, South African Airways, entered a form of bankruptcy protection last week.

Ease regulations 

Some of the proposals being considered by cabinet on Friday include fast-tracking applications of businesses seeking to generate their own electricity, bringing in temporary generators and connecting renewable energy projects to the grid sooner than initially planned.

Private firms have been clamouring for years for the government to ease regulations to allow them to generate more of their own electricity.

Roger Baxter, chief executive of industry group the Minerals Council, told Reuters that miners could bring online between 500 MW and 1 500 MW of their own generating capacity over the next few years, if regulations were eased.

“All our eggs are in one basket with Eskom, which is not delivering. Government and business need to work together to solve this problem,” Baxter said.

Eskom, which cut 2 000 MW of power from the national grid on Friday morning but later scaled it back to  1 000 MW, wants a larger safety margin to do more maintenance on its plants.

As of Friday morning, Eskom had almost 12 000 MW of unplanned breakdowns, versus its nominal capacity of around 44 000 MW.

Power cuts are expected to ease from the middle of next week, as many local businesses shut down before the Christmas and New Year public holidays. 


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Well, the cure for the energy crisis depends on whether you only want to address the symptoms, or whether you honestly want to cure the disease.

The fact that the leader of the socialist regime is pleading with the free enterprise to come to the rescue, implies that he only wants to put a band-aid on the symptoms. If he really wanted to address to root causes of the disease, he would step down, fire all ANC parliamentarians, demolish the tripartite alliance, ban labour unions and disband the ANC.

He is not looking for a cure I suppose. He is looking for someone to bail him out. He is frantically searching for legitimacy.

Why must they meet procurement criteria set by government?? Let private enterprise compete without government forever wanting a finger in the pie.

Give the private sector free reign. Promise to buy electricity from them. Allow them to compete with Eskom. And things will come right. Do it and you will see.

Is this an admission that our two new massive coal fired stations are never going to come on line?

Too badly designed to operate?

Set a simple cap. Call the current IPP “bluff” pick up the phone to each wind plant and say can you do 40c/kWh. Then sign with them for 6 months/9 months whilst they sort the “bidding ” process.

Run a simple auction. Everyone that can do cheaper than coal is in for now.

The minister really doesn’t understand his portfolio

I had the same idea a while back.
You only buy from renewable IPP’s which can generate at a even lower cost than Eskom’s own generation cost of 93c/kWh

Win-Win for everybody.

Buy it for 40c/kWh and re sell it to the end user for 93c/kWh?
I see some profit here for the ANC?

hmmm… Maybe i’m reading to much into this?
But I think, this is all part of the long term Ramaphosa Teams strategy.

Think about it, you inherit a mess, and the only way out is unpopular drastic action, which will ultimately result in a loss of politcal power, which will result in the inability to correct the core problems, and the continued downward spiral.

So how do you do that, and remain the hero?
It’s all a matter of timing!
1. Gear up according to your plans
2. Wait for the situation to become critical (As it has proven it will)
3. Sweep in and save the day with your solutions.
4. Bask in the praise.

That seems the way SAA went and that seems the plan for Eskom.
Watch this space.
I think we should watch this administration VERY carefully, and not just re-act to current events.
Theyre wile!
Let’s hope they’re not that smart with EWC and NHI.

I like your viewpoint as I’ve held a similar one for some time now. It’s clear that CR will be dead in the water if his decisions or actions displeases the inner party and alliance partners alike. I cannot for one minute think that he admires own party members such as Ace et al. Thus he has to look for the right opportunity and strike; Problem for us ordinary folk is that we feel he’s waisting time through inaction.

As a band aid using IPP is not a bad idea, provided they can supply cheaper than what Eskom is making electricity for.
However, getting Eskoms house in order should be the focus. We have the power stations, the infrastructure and the existing distribution. Get on with using it and making it work…sure, it will cost bucket loads of money to fix, finish and maintain. ANd? So what? We are screwed if don’t fix it, so may as well just bend over and get screwed by the banks and sort out Eskom once and for all… do whatever it takes, just get it done so we can move on please.

All the solutions are there, but too heavily free market oriented.
No. 1: Cut all individual users not paying – like in the Old SA;
No. 2: Get rid of all illegal connections;
No. 3: Allow all IPP’s to push surplus energy back into the grid, including those private individuals already off the grid/semi off the grid;
No. 4: Place Eskom under business rescue. Hopefully the final outcome will be full liguidation.

Well its a pretty simple fix, answers are right in front us. The real question though is when these answers are reiterated to Government will anything be done? Probably not; what would likely happen is Government recoils at the idea and spouts rhetoric about how something must be done.

Ask your knowitall socialist buddies, the eff for their suggestion and their capital?

After his disgusting 16 december speach i have even less respect for this cockroach- he is trying to start a civil war

‘…..asked industry for the cheapest and quickest options to ease a power crunch….’

I’ll give you one for free.

On each station there will be an engineering office. Look for stationary cupboards that haven’t been opened for 25 years. Inside you’ll find maintenance schedules. Read them. Understand Them. Apply them. And another bonus, also free, you can start almost immediately.

End of comments.





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