WHAT IS BROKEN
The domino effect of stage four power cuts this week — which stripped consumers not only of electricity, but of water and telecommunications in some areas as well — was a stark reminder of South Africa’s utter reliance on embattled power utility Eskom.
Eskom officials and the department of public enterprises outlined the problems facing the parastatal this week. Cyclone-related damage to power lines from Cahora Bassa in Mozambique, which supplies about 1 000 megawatts (MW) of power, and Eskom’s ageing plant are just some of the reasons for the power outages.
As a result of planned maintenance and unplanned tripping, about 17 000MW of capacity was unavailable. A key reason has been boiler tube leaks, which have crippled seven power-generation units. The use of open-cycle gas turbines, intended to meet peak demand, has skyrocketed recently, and spending on diesel has reached almost R5-billion.
Eskom is now contending with diesel shortages as it drained the country of excess supply.
There is sufficient diesel to meet the needs of the rest of the country, according to Avhapfani Tshifularo, the executive director of the South African Petroleum Industry Association.
But, because Eskom’s demand had been unpredictable, it was difficult to meet the additional need because of long time-leads. To import more diesel required about eight weeks and refineries were configured to meet a specified demand 60 days in advance, Tshifularo said.
He said the fuel industry was in discussion with Eskom to “see if we can meet their challenges jointly.”
Eskom chief executive Phakamani Hadebe said a ship with additional diesel stock was expected later this week and, if Eskom could get more fuel, the power cuts could ease. But he stressed that relying on diesel was unsustainable and it was crucial for Eskom to address the ageing power stations’ problems.
Eskom chairperson Jabu Mabuza drew attention to the is older than 37 years, had not been maintained properly in recent years. The company’s budget for maintenance had gone from about R40-billion six years ago to about half of that.
The utility apologised for the “discomfort” that load-shedding was causing, but it needed time to fix the problems, Mabuza said.
To add to its woes, Eskom’s new and costly power stations, Medupi and Kusile, have not been performing optimally.
Mabuza said the company was looking at “what would be the effect of … not completing these”.
After reports that Eskom was going to take load-shedding beyond stage four, and some that claimed it already had, the company said it was not planning to go to stage five or beyond but that “necessary contingency planning is in place”.
The government has introduced a range of ways to address Eskom’s woes, not least of which was the announcement by President Cyril Ramaphosa in his State of the Nation address that Eskom would split the company into three separate business units, namely generation, distribution and transmission.
Ultimately, experts argue, the energy market has to be opened up to independent power producers, and particularly those producing renewable energy, to reduce reliance on Eskom.
HOW TO FIX IT
Fresh rounds of stage four load-shedding this week again drove home the precarious state of Eskom’s operations, and the thin line the utility is walking between meeting electricity demand and failing to keep the lights on.
But energy researchers and experts argue there are steps that can be taken to reduce the extent of load-shedding in the short term. Other measures, including bringing in alternative sources of power and allowing municipalities to procure electricity from non-Eskom producers, can improve security of supply in the medium to long term.
To start with, consumers should be taking basic steps, such as switching off nonessential appliances, according to an energy researcher at the University of Cape Town’s energy research centre, Jesse Burton.
In the medium term, there should be a greater focus on energy efficiency, for example, by switching to gas for cooking or using solar geysers, she says.
“Historically, we have never taken energy efficiency in South Africa seriously,” says Burton, adding that the National Energy Regulator of South Africa (Nersa) has in recent years been cutting the Eskom energy efficiency budget to keep tariffs lower.
Expediting the development of small-scale embedded generation (SSEG) could potentially reduce the levels of load-shedding, she says.
SSEG refers to households, commercial businesses and industries that can produce power for their own use and feed excess into the grid.
There has been some uncertainty about the regulatory processes that apply to the two categories of embedded generators — those that produce less than one megawatt (MW) of power and those that produce between 1MW and 10MW of power.
Nersa has published rules for embedded generation of below 1MW, which must register with the regulator. But, according to its spokesperson, Charles Hlebela, SSEGs between 1MW and 10MW are part of the still-to-be-published Integrated Resource Plan (IRP) by the department of energy.
But energy expert and managing director of EE Publishers, Chris Yelland, who has also argued for the unlocking of SSEG, says, given the current supply crisis, the country needs to move away from overregulation and incentivise that kind of power production and reduce reliance on Eskom.
“The big advantage of this is that it costs the taxpayer nothing,” Yelland says.
Another option put forward by both Burton and Yelland is to allow municipalities to procure their energy directly from independent power producers.
The City of Cape Town is currently challenging the ministry of energy and Nersa in court to allow it to procure energy directly from renewable energy suppliers without a ministerial determination, in terms of section 34 of the Electricity Regulation Act (ERA).
It has asked the court for an order declaring that a ministerial determination is not required for an independent power producer (IPP) to create new capacity for the generation of electricity or to sell that to the city.
If the court finds that a ministerial determination is required, the City of Cape Town is seeking that section 34 of the Act to be declared unconstitutional and invalid because it interferes with its duty to provide electricity to its inhabitants.
According to the city’s mayoral committee member for energy and climate change, Phindile Maxiti, it has asked the high court in Pretoria to hear the matter urgently.
The department and Nersa are opposing the application, and Nersa says it believes the city’s application is not in line with the ERA.
But, according to Maxiti, it can be argued that the minister and Nersa are opposing the application “to further protect the Eskom monopoly and prevent further erosion of its viability as a going concern’.
Burton says it would make sense for cities to “have the freedom and flexibility around making those decisions for themselves” rather than relying on Eskom’s coal-fired power, which is increasingly expensive, dirty and unreliable.
Other municipalities are watching the matter closely.
The spokesperson for Johannesburg’s City Power, Isaac Mangena, says: “City Power like other municipal utilities is waiting in anticipation for the outcomes of that case and, if City of Cape Town wins, City Power will follow suit in terms of
procuring energy from the best bidders.”
City Power’s long-term plan is to be a participant in energy generation, especially in renewables, he says. It will help to reduce the price of electricity because “there are already private players who are proposing bankable ideas with cost below Eskom’s charges”.
It will also improve security of supply and avoid load shedding, he says.
Yelland says the long-delayed IRP should also be published and the stalled rounds of renewable energy procurement — bid windows 4.5 and 5 — must be given the go-ahead.
Getting this power on stream will take two to three years but is a relatively quick win compared with other power sources such as coal or nuclear, he says. The average bid price for power produced under these rounds was 62c/kilowatt hour, Yelland says.
Burton says, ultimately, the current crisis is driven by long-running structural failures in the system and there are no short-term solutions for these.
And although load-shedding is a nuisance and bad for the economy, it protects the system from a blackout, she says.
The possibility of increased stages of load-shedding “does not mean you are having a blackout; it is how you protect the system [from one]”.