South Africa is running into an energy crunch — and is likely to fall back largely on ”Old King Coal” to deal with it.
Eskom officials indicate that the likely source of new capacity will be conventional coal, with possibly some gas and conventional hydro-electricity from the region.
The controversial nuclear option — the Pebble Bed Modular Reactor — has not yet been built to commercial scale and cannot be ready for the first phase of ”greenfields” expansion, beginning in 2010. And although Eskom is exploring renewable energy sources, wind and solar technology are unlikely to contribute much.
Because of earlier overestimates of demand growth, South Africa enjoyed a 20-year breathing space from the costly burden of building new power stations. That is now over.
Eskom currently has a total net maximum capacity of just more than 36 000MW. Maximum demand has been increasing by about 1 000MW a year — from 27 183MW in 1999 to 31 928MW last year — mainly because of steady domestic economic growth and the advent of power-hungry industries in the region like Mozambique’s aluminium smelter, Mozal.
The first step in upping capacity has been to recommission three mothballed older plants — at Camden, Grootvlei and Komati — at a cost of about R12-billion, less than half the cost of building new ones. These have a combined capacity equal to one modern ”six pack” plant, about 3 600MW, and the first will be on stream next year. They will meet the crunch in peak period demand expected in 2007.
But it will not be enough. By 2010, when existing and ”demothballed” plants can no longer handle growth in round-the-clock demand, major greenfields development will be needed.
The growing urgency of building new power stations has coincided with strenuous efforts by the government to implement a cherished political agenda — the privatisation of large parastatals with a black empowerment component. This has run into powerful headwinds from the trade unions, mainly driven by job fears.
Nevertheless, the deadlines for new construction have forced delivery to the top of the agenda — Eskom will go ahead as soon as possible. The new plants could change hands later, if it is possible to implement privatisation and empowerment together. This procedure has been approved by both the government and the National Electricity Regulator.
The only significant progress to date has been in distribution, where the African National Congress inherited a chaotic mix of suppliers, including local authorities and Eskom itself. The retail tariff structure was also chaotic: many local authorities cross-subsidise other services by loading power charges.
The plan is to merge distribution into six regional authorities mandated to rationalise tariffs. Well managed, they should become more efficient power suppliers than most councils.
The recommissioning will provide for broad-based black economic empowerment, subject to the limitation that it is highly technical.
Eskom’s Steve Lennon warns that ”there is not much time” to meet the 2010 deadline. The corporation is toiling on feasibility studies covering the whole range of power plant and feedstock options. A decision to build a coal- or gas-fired plant must be taken next year, at the latest.
Eskom believes imported, liquefied natural gas could compete with conventional coal plants if transmission and environmental benefits are included. But imported gas carries political and currency fluctuation risks.
Southern Africa’s enormous hydro-electric potential is also being assessed, particularly Mepande Uncua on the Zambezi in Mozambique and the vast Inga site in the Democratic Republic of Congo (DRC). But these have their own hazards. The transmission distance from the DRC to South Africa stretches existing technology to the limits.
Pumped storage schemes are seen as having potential. These involve building dams with good hydroelectric characteristics — in the mountains — into which water is pumped at times of low electricity demand and from which it is released through the turbines at peak period, effectively shifting demand round the clock (”peak shaving”). Eskom already runs two pump storage plants.
The corporation is also exploring underground coal gasification and fluidised bed coal combustion, a modern alternative to coal-fired boilers.
Is the inclusion of wind and solar options more than a gesture to the Greens, given their high cost and erratic output? Lennon says Eskom is considering combining wind generation with energy storage. Heat energy could be stored in a large solar thermal plant for use at the evening peak, but costs are a major constraint. Significant solar electricity is still 10 to 15 years down the road.
In the upshot, a mix of options is likely, with coal the cheapest and most dependable.