Shahil
Well-Known Member
- Joined
- Jun 10, 2008
- Messages
- 161
- Reaction score
- 14
The mothballed power stations weren't the beginning of the problem. But doesn't mean this wasn't part of it.
Energy is very complicated. You need to understand this first before you even attempt to understand more.
At the crux of it, the power issues in South Africa stemmed from the hopes of privatisation in the early 2000s. As most other energy monopolies around the world were split up, it was best practice and suggested for a similar exercise to be taken in South Africa.
Except our major issue was the energy was too cheap. Way way too cheap. It meant that even though privatisation was attempted, it was not fully possible to reach a suitable solution that would bring benefit to the country and to investors. This went on for few years and this delay way the first big issue - we needed to act swiftly but it was impossible.
Thus, with the economy (at the time) steaming ahead, Eskom had no real choice but to embark on megaprojects like they had done before. Two six pack stations. It made sense given Eskom's history because Eskom built six packs - it was what they did.
These would be 33% bigger than before.
And environmental, and technical requirements had changed rapidly.
But the consultants (pre-Gupta era) were okay with this. Some really big and reputable companies told Eskom this was okay.
But obviously it was not - building a megaproject in the 21st century is a terrible idea.
Look at Berlin's airport.
Look at HS1/HS2 in the UK.
Look at every new nuclear reactor.
All are delayed. All are over budget.
But South Africa had JUST executed a megaproject (the 2010 World Cup) - maybe it would be a success. But eish, how would you even know.
But at the time, it was the only choice. Nuclear would have been worse and be fraught with even more corruption. Renewables were not competitive as yet. Building coal would, at least, utilise local skills. Wouldn't mean it would be a success sadly.
So this was around 2005 - 2010. It was expected that Medupi/Kusile would be online by 2011/2012. Ten years later, Kusile is still being commissioned.
To supplement the requirements for energy, these mothballed projects would be brought back.
These were successful but it definitely became apparent that the cost of these would be high - not sky high making them a bad idea but bad enough to know that bringing back mothballed stations don't make sense especially seeing that renewables had now come down to a level that would compete.
Eskom did successfully build a market related priced wind farm but as the REIPPPP had already kicked off, the need for Eskom to build renewables projects was probably not the best idea - especially if the market was satisfying this need.
So...just reading this, you should understand that scenarios were analysed, decisions made, and contingencies put in place. Maybe better decisions could have been made. Well, no, better decisions definitely could have been made. But we had what we had.
The big problem was what happened from 2015.
Since then, the industry has been stagnant while the world has forged ahead.
REIPPPP Round 4 was delayed by Eskom. This was due to state capture.
The IRP (which should be updated regularly) was delayed.
Easing of the electrical system rules (like the 100MW cap) was not implemented and people just took their time.
Meanwhile, coal became unbankable, and everyone wanted renewables.
If we continued with the trajectory of renewables we had in 2014, we would be hitting 25% renewables in the country by now at prices similar to Eskom plants.
It would now start to have caused grid issues but in 2020, batteries became market priced so this would supplement. Other large scale storage (like pumped storage) could also have been looked at during this time to further supplement need for storage (even though it may not be needed).
The other thing is that if we continued on the trajectory, the local industries would have been built up which always helps.
But alas, this did not happen and this is where we are. Right now, things are rapidly changing because it is lucrative and makes sense. But it takes time. A small renewable power plant will still take 2 years to construct. Maybe a little faster but ya.
Also, the slow build up of renewables is basically the same as building a large coal or nuclear plant. It takes 8-10 years to build coal. In that time, you can get a lot more renewables online. And at way, way, way lower investment risk.
An aside to this is the whole PBMR. I've always lamented the fact that we stopped funding it. In hindsight, I might slowly think they made the right decision as it really was just sucking up money. We probably would have got to commercialisation by now but even though there is a small market for these reactors, renewables still is way more attractive.
Energy is very complicated. You need to understand this first before you even attempt to understand more.
At the crux of it, the power issues in South Africa stemmed from the hopes of privatisation in the early 2000s. As most other energy monopolies around the world were split up, it was best practice and suggested for a similar exercise to be taken in South Africa.
Except our major issue was the energy was too cheap. Way way too cheap. It meant that even though privatisation was attempted, it was not fully possible to reach a suitable solution that would bring benefit to the country and to investors. This went on for few years and this delay way the first big issue - we needed to act swiftly but it was impossible.
Thus, with the economy (at the time) steaming ahead, Eskom had no real choice but to embark on megaprojects like they had done before. Two six pack stations. It made sense given Eskom's history because Eskom built six packs - it was what they did.
These would be 33% bigger than before.
And environmental, and technical requirements had changed rapidly.
But the consultants (pre-Gupta era) were okay with this. Some really big and reputable companies told Eskom this was okay.
But obviously it was not - building a megaproject in the 21st century is a terrible idea.
Look at Berlin's airport.
Look at HS1/HS2 in the UK.
Look at every new nuclear reactor.
All are delayed. All are over budget.
But South Africa had JUST executed a megaproject (the 2010 World Cup) - maybe it would be a success. But eish, how would you even know.
But at the time, it was the only choice. Nuclear would have been worse and be fraught with even more corruption. Renewables were not competitive as yet. Building coal would, at least, utilise local skills. Wouldn't mean it would be a success sadly.
So this was around 2005 - 2010. It was expected that Medupi/Kusile would be online by 2011/2012. Ten years later, Kusile is still being commissioned.
To supplement the requirements for energy, these mothballed projects would be brought back.
These were successful but it definitely became apparent that the cost of these would be high - not sky high making them a bad idea but bad enough to know that bringing back mothballed stations don't make sense especially seeing that renewables had now come down to a level that would compete.
Eskom did successfully build a market related priced wind farm but as the REIPPPP had already kicked off, the need for Eskom to build renewables projects was probably not the best idea - especially if the market was satisfying this need.
So...just reading this, you should understand that scenarios were analysed, decisions made, and contingencies put in place. Maybe better decisions could have been made. Well, no, better decisions definitely could have been made. But we had what we had.
The big problem was what happened from 2015.
Since then, the industry has been stagnant while the world has forged ahead.
REIPPPP Round 4 was delayed by Eskom. This was due to state capture.
The IRP (which should be updated regularly) was delayed.
Easing of the electrical system rules (like the 100MW cap) was not implemented and people just took their time.
Meanwhile, coal became unbankable, and everyone wanted renewables.
If we continued with the trajectory of renewables we had in 2014, we would be hitting 25% renewables in the country by now at prices similar to Eskom plants.
It would now start to have caused grid issues but in 2020, batteries became market priced so this would supplement. Other large scale storage (like pumped storage) could also have been looked at during this time to further supplement need for storage (even though it may not be needed).
The other thing is that if we continued on the trajectory, the local industries would have been built up which always helps.
But alas, this did not happen and this is where we are. Right now, things are rapidly changing because it is lucrative and makes sense. But it takes time. A small renewable power plant will still take 2 years to construct. Maybe a little faster but ya.
Also, the slow build up of renewables is basically the same as building a large coal or nuclear plant. It takes 8-10 years to build coal. In that time, you can get a lot more renewables online. And at way, way, way lower investment risk.
An aside to this is the whole PBMR. I've always lamented the fact that we stopped funding it. In hindsight, I might slowly think they made the right decision as it really was just sucking up money. We probably would have got to commercialisation by now but even though there is a small market for these reactors, renewables still is way more attractive.
