Eskom’s wishful thinking
Load-shedding could stick around for a lot longer than South Africans have been told, and it could intensify further due to a lack of transmission grid capacity for new wind and solar power plants.
This is according to Intellidex’s head of capital markets, Peter Attard Montalto, who explained that drastic change is needed, particularly in leadership roles at the department of mineral resources and energy and the department of public enterprises.
“There is now no more grid access in key areas for the foreseeable future,” Montalto wrote.
“The implication is more load-shedding for longer than previously assumed.”
“Deep change is clearly needed, including political and leadership change at the departments of mineral resources & energy and public enterprises,” he added.
In November 2022, Eskom warned South Africans that prolonged load-shedding is likely over the next six to twelve months as the power utility embarks on significant capital projects and repairs that will reduce available generation capacity.
“Starting over the next few weeks, Eskom will embark on some major capital investment projects, and major repairs that carry significant risk and that will serve to further increase the implementation of load-shedding,” it said in a statement.
“Eskom cautions the public to anticipate the increased risk of load-shedding until these problems are resolved over the next six to 12 months.”
Montalto’s remarks come after South Africa only managed to appoint five preferred bidders that will add 860MW of the 4.2GW apportioned for bid window 6 of the Renewable Independent Power Producer Programme (REIPPP).
It’s important to note that a sixth bidder could be added, bringing the total appointment closer to 1,000MW. The space made for the 4.2GW is related solely to renewable wind power IPPs.
According to Montalto, the failure to allocate slots for 3.2GW of wind power relates to a lack of grid capacity.
“Having 3.2GW of unallocated slots for wind wasn’t expected, but what we are seeing is expected themes and blockages play out on steroids,” he wrote.
“Put simply, there was no grid to connect these projects (in the Eastern Cape and the Western Cape) because spare grid capacity that was shown by Eskom at the time of bidding in the two provinces (about 3.8GW) had subsequently (legally and by the rules) been taken instead by private off-taker projects.”
Montalto added that South Africa desperately needs to expand its transmission grid — something that has never been driven forward despite Eskom and the private sector saying it with increasing trepidation.
As a result, the transmission grids in the Northern, Western, and Eastern Cape are full — and will remain so until at least 2027.
This prompts the question of how the country can move forward with the upcoming bid windows 6.5 and 7, as well as the 6GW of renewable generation and 1GW of battery storage that South Africa must procure each year.
Energy expert Chris Yelland took to Twitter to give his opinion on Montalto’s views, comparing South Africa’s current state of affairs to that of the Soviet Union under Gorbachev before the fall of the Berlin Wall.
“As a result of policy, regulatory and planning myopia and inaction, South Africa is undergoing the longest stretch of the worst and most damaging load shedding in its history,” Yelland said.
“No amount of optimism, blind faith or sunshine journalism allows us to escape this unfortunate truth.”
“As the Soviet Union experienced under Gorbachev, when political leaders finally come to understand that the cupboard is indeed bare, continuing with the status quo and a failed ideology is no longer an option, and the Berlin Wall falls,” he added.
While Yelland agrees that the country’s status quo is grim, he believes that South Africa is either approaching a watershed moment or “some kind of end-game”.
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