Eskom’s monopoly is on its way out

South Africa’s power production industry is on course for a drastic overhaul, due to the opening up to alternatives outside of Eskom, according to Rapport.

A number of key changes – permitted through recent government decisions – indicate that Eskom’s monopoly on power generation is fading.

These events include:

  • The procurement of 2,000MW of emergency power from independent power producers (IPPs).
  • Approval to purchase another 11,800MW of generation capacity from IPPs starting in December or January.
  • High-demand power users such as mines have been allowed to generate their own electricity or buy directly from independent producers.
  • Projects with a capacity smaller than 1MW no longer require an electricity generation licence.
  • Municipalities may generate their own electricity or purchase power directly from independent suppliers.

Additionally, Eskom’s ongoing unbundling envisions the creation of a separate transmission company in 2021.

Eskom CEO André de Ruyter has previously explained the Independent Transmission and System Operator (ITSMO) will focus squarely on the transmission system – including non-discriminatory third-party access to the grid.

This means that it would be easier for private entries in the generation market to link up to the national power grid.

No choice left for government

Renewable energy expert Mike Levington told Rapport that the government no longer had a choice but to allow independent producers into the energy mix.

One of the biggest reasons was that Eskom was struggling to meet demand on its own, and had to implement more load-shedding in the first seven months of 2020 than the entire 2019.

Financiers have also increasingly pushed for the use of renewables – like wind and solar – over fossil fuels.

Levington said that De Ruyter’s pragmatic approach has shown him welcoming steps to introduce more renewable energy.

Load-shedding forecast

On Thursday, Eskom provided an update on what South Africans can expect in terms of load-shedding in the coming months.

Speaking at the power utility’s State of the System briefing, De Ruyter said a number of factors have led to a significant risk of load-shedding remaining in 2020.

He said that long-overdue major maintenance is being conducted, and design flaws at Medupi and Kusile are being fixed – the results of which are promising.

“All of this will contribute to a step-change in the availability of our generation system by April of next year,” De Ruyter said.

“But this is not yet enough to eliminate the risk entirely of load-shedding.”

“There is more work that needs to be done, but we anticipate that by September of next year, we will have been able to significantly reduce, but not eliminate, the risk of load-shedding going forward.”

This means that load-shedding will remain a threat throughout most of 2021, with any major disruption to the national power grid likely resulting in the need to impose power cuts on the country.

The load-shedding forecast was summarised as follows:

  • Now – April 2021 – Risk of load-shedding
  • April 2021 – Step-change in generation capacity
  • April 2021 – September 2021 – Risk of load-shedding remains over the winter period
  • September 2021 – Risk of load-shedding reduced

Independent power producers are also set to play a significant role in helping Eskom counteract the loss of 8,000 to 12,000MW of power generation capacity over the coming years due to decommissioning of ageing power plants.

Now read: Eskom lying about Koeberg nuclear power station safety – Expert

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Eskom’s monopoly is on its way out