Eskom cannot execute its plan to end load-shedding unless the Department of Mineral Resources and Energy procures the generating capacity headroom needed to perform maintenance on its ageing coal power fleet.
The CSIR recently published its annual statistics on power generation in South Africa, revealing that 2021 was the worst year yet for load-shedding.
There has already been more load-shedding in 2022 than at the same time last year.
That is despite previous promises from Eskom CEO André de Ruyter that load-shedding would improve from September 2021.
Eskom told MyBroadband that there were two main reasons for the current load-shedding situation.
Firstly, Eskom’s generating fleet had a low Energy Availability Factor (EAF) due to being unreliable and unpredictable.
“The current condition of the coal-fired plants, in particular, is due to many years of running at high utilisation factors with minimal reliability maintenance and upgrades,” Eskom said.
Secondly, there was a lack of generation capacity in the country.
“To stop, or significantly reduce load-shedding requires both of these issues to be addressed,” the utility said.
Eskom said it was continuing to drive its Generation Turnaround Plan that focuses on seven key areas to improve the fleet’s performance.
However, it needs additional capacity and funding to carry this plan through, which requires the government’s support.
“The DMRE is responsible for procuring additional capacity which will both provide direct capacity to reduce load-shedding but also provide Eskom with the capacity or ‘space’ in which to perform the deep, reliability maintenance that is essential for improving the reliability and predictability of the generation fleet.”
This feedback echoes what Eskom has reiterated at the many press conferences it has held regarding load-shedding in recent months — it needs government to provide it with another 4,000 to 6,000MW of capacity.
That buffer would supposedly allow it to take units offline and perform essential maintenance while continuing to supply sufficient electricity with its remaining capacity.
But there seems to be no sense of urgency from the government to provide Eskom with this support, with progress in bringing the new generation online moving along at a snail’s pace.
The energy department has repeatedly fallen behind in announcing new bid windows for projects that form part of the renewable energy IPP procurement programme.
Getting the additional wind and solar power online as soon as possible is critical to helping Eskom gradually decommission its coal fleet and meet increasingly strict global climate regulations.
The much-touted Risk Mitigation IPP Programme (RMIPPPP), which the government promised would add nearly 2,000MW by the end of 2022, is also experiencing massive problems.
A large part of this is due to the government’s controversial decision to opt for a 20-year power purchasing agreement with Turkish company Karpowership to supply the vast majority of the capacity — about 1,200MW.
The decision has opened up a can of worms, with significant opposition from civil society and environmentalists questioning the logic behind using powerships for an extended period.
None of the RMIPPPP projects are expected to be online by the end of the year. Only one 200MW project has been approved and is set to be complete by the end of 2023.
At the same time, energy minister Gwede Mantashe has repeatedly expressed support for fossil fuel generation like coal which is falling out of favour worldwide.
Mantashe has also bumped heads with Eskom’s management for not being willing to sign off on the Karpowership power purchase agreement without clarity on what it can expect to pay for the gas needed to power them.
Eskom also told MyBroadband it requires a “reasonable path” towards prudent and efficient cost-reflective electricity tariffs.
It has repeatedly come up against the ropes in its attempts to get what it deems to be cost-reflective tariffs approved by the National Energy Regulator of South Africa (Nersa).
On several occasions, it had to drag Nersa to court to rectify the regulator’s incorrect calculations and get the necessary increases it was allowed by law.
Most recently, Eskom requested an increase of 20.5% in the next financial year, but Nersa only approved a 9.61% hike.
The utility said its hike was necessary to account for the increased cost associated with buying more power from Independent Power Producers (IPPs).
The utility is also relying more on open-cycle gas turbine generation during peak hours, increasing the costs of its diesel expenditure.
While South Africans are often quick to criticise Eskom for its price hikes, it is interesting to note the utility has recently joined businesses in calling out municipalities for adding substantial levies to those prices.
Eskom supports the business chambers of Nelson Mandela Bay and Pietermaritzburg’s challenge to Nersa’s pricing methodology for municipalities.
They claim it is not based on the actual cost of providing electricity, plus a reasonable margin.
The utility’s legal representative in the matter said Johannesburg’s City Power charged businesses up to 80% more than Eskom.