Eskom is de-mothballing old stations, rolling out new capacity and achieving vast energy savings, but with such run-down and stretched power resources, there will be little wiggle room in electricity provision for a long time to come.
REcent outages saw Eskom lose 25% of the power on the national grid in the peak of summer. Until now consumers had been led to believe that outages were more likely when demand peaked in winter.
The outages come even as Eskom has managed to save R1,4-billion annually through various energy efficiency initiatives under its demand side management programme (DSM).
DSM promotes more efficient electricity use as a trade-off for building expensive new power stations. A standard coal-fired power station producing around 4Â 000mW costs about R30-billion.
DSM, through the implementation and monitoring of end-user’s activities, encourages consumers to modify their patterns of electricity usage, including the timing and level of electricity demand.
Eskom offers incentives of between 50% and 100% of costs for these energy-efficient solutions on commercial and residential properties.
In order to facilitate the solutions Eskom has registered more than 80 Energy Services Companies (Esco) to provide energy audit services and implement interventions that will bring about more efficient electricity usage.
Eskom’s investment strategist, Andrew Etzinger, says that the DSM project allows Eskom to trade off energy-efficiency initiatives against building new power stations, which is much more expensive.
He says that through DSM Eskom has managed to save 200mW a year and that to build 200mW of energy supply from a power station could cost in the region of R1,4-billion.
However, Eskom is not satisfied with the 200mW savings, which is why it plans to quadruple the energy savings through the DSM project in 2007.
Etzinger says he has been tasked with looking at expanding Eskom’s DSM project and says the model followed will probably be similar to that used in the Western Cape last year.
Etzinger says that through a number of energy efficiency initiatives Eskom managed to save 500mW of power in the Western Cape last year at a cost of R400-million.
He says these initiatives included introducing five-and-a-half million energy-efficient light bulbs, insulating 200 000 geysers and improving the energy efficiency of 40 buildings that were among the Western Cape’s biggest energy consumers.
Etzinger says other projects were a massive awareness campaign and the power alert that South Africans would have seen on their TV sets.
Manufacturers and other businesses that want to install energy-efficient solutions must contact an Esco, which will visit the premises to do an evaluation and will then report back to Eskom.
If Eskom feels that the savings are substantial it will give the Esco the go-ahead to do further analysis. This analysis is then approved by an independent measurement and verification team such as the Energy Research Centre (ECR), which is based at the University of Cape Town.
Once the interventions have been completed, the Esco is paid in full by Eskom and the business is billed by Eskom for its 50% of the costs.
Residential properties can also benefit from DSM, by contacting an Esco to install a load management intervention, which will stop their geyser heating water in peak periods. Eskom pays 100% of all costs for load management solutions.
Denis van Es, the senior researcher at the ECR, says the DSM project is a positive move but there is not enough implementation and awareness.
“We have a wonderful energy efficiency policy put out by the department of minerals and energy a couple of years ago,” says Van Es. “But there is too little implementation.”
Menno Sulsters from Shared Energy Management, an Esco in the Western Cape, says there is still a lot of scepticism about load management projects and it takes a lot of convincing to get customers to go ahead.
Shared Energy Management is currently involved in two load management projects, but Sulsters says it takes a long time to get projects approved, sometimes as long as a year and a half.
But conservation is not enough. Eskom says it will have to double its existing electricity generating capacity by 2025 if the economy reaches the government’s 6% growth target.
Last week’s electricity panic is a clear illustration that the utility lacks wiggle room to meet soaring South African demand. Nearly 10 000mW were unavailable, said Eskom spokesperson Fani Zulu, who said that 10 units at Eskom’s 24 stations were down for maintenance and another eight had unplanned technical outages. Eskom had to contain demand by load shedding and asking consumers to save electricity.
Eskom acknowledges that it underestimated how fast the economy would grow, resulting in a tight reserve margin.
But for nearly a decade, the government has been aware that new capacity would be needed by 2007. A 1998 energy policy document said that electricity demand would exceed supply by 2007. In 2001, the National Electricity Regulator advised the government to decide urgently on new capacity in the next six years.
Two years later Eskom committed to developing capacity for peak demand, referring to times when demand rises beyond average levels.
Many analysts attribute Eskom’s failure to invest in generating capacity as the result of policy uncertainty in the government and, at one stage, a ban on any capacity building by the utility.
Former National Union of Mineworkers general secretary Gwede Mantashe said that Eskom was told not to position itself to develop new capacity while the department of public enterprises tried to sell off 30% of the utility. When there was no uptake from the private sector, Eskom began to reconsider decommissioning mothballed stations and planning for new capacity.
“We said that the government would only realise the impact of its policies [to restructure Eskom] in 10 years, and that window is now,” said Mantashe.
Only in 2010 will Eskom decide on building base load capacity, the utility told Parliament recently, meaning that it will have to top up capacity with short-term measures in the interim. Energy efficiency emerges as a key strategy in managing the current crisis.