Electricity Minister Kgosientsho Ramokgopa
South Africa has “turned the corner” in the battle to keep the lights on but is not yet “out of the woods” when it comes to eradicating load-shedding from the country’s energy challenges.
Electricity Minister Kgosientsho Ramokgopa told a media briefing on the implementation of the Energy Action Plan on Monday that Eskom was making significant progress in confronting load-shedding, although revenue collection remained a growing problem.
Ramokgopa highlighted the “significant” the team at the power utility’s significant successes in improving electricity generation in recent weeks, thanks to the national treasury’s R250 billion bailout, saying there had been “green shoots” and reduced levels of rolling blackouts.
However, he warned that the huge municipal debt of around R64 million owed to Eskom — due to non-collection of revenue and losses as a result of illegal connections — was showing no sign of abating and presented a risk to the liquidity of the entity.
“In August, we reached stage six (load-shedding) and this is what we referred to as short-term pain for long-term gain,” Ramokgopa said.
He said an unplanned capacity loss factor for summer had been forecast at 14 500 megawatts, which had hit 14 100MW last week before declining to 13 000MW on Monday. This improvement was due to reduced demand and the successful maintenance of units, which were performing longer and better when they returned online.
However, Ramokgopa said the Eskom generation team was still battling to reduce partial load losses, where performing units were not generating power to their full capacity.
“But what is significant is that there are a number of days where we are sitting with unplanned outages of below 14000MW. Today, we are sitting at 13 000MW. This is important to ensure that the system becomes reliable to reduce the intensity of load-shedding and, ultimately, address the monster that is load-shedding,” he added.
“The team is doing everything that is possible to address the partial load losses. Kendal is among those power stations and we have brought outside expertise to ensure, as we increase capacity, we are not caught on the emissions level.”
He said Eskom had also improved its level of outage slips as units were returning online on schedule after maintenance.
However, to accurately measure Eskom’s improvement, this should be done over a period of time rather than on a weekly basis, he added. In May, Eskom had 3 120MW of planned maintenance outages, which was strategically reduced during winter to 2 500MW, but this had now been ramped up to 5 281MW.
“There has been an increase in planned maintenance, because the discipline of planned maintenance is a philosophy we are going to subscribe to, and also demand is coming down so we are using the opportunity to increase planned maintenance and we are beginning to see those benefits now,” Ramokgopa said.
“We are taking out an additional 2 000MW without seeing a degradation of the intensity of load-shedding.”
He said unplanned outages had averaged about 17 369MW in May, as a result of units being unreliable or not performing efficiently, but this had dropped “significantly” to 14 170MW.
“This is the single biggest indicator of the kind of progress we are making. The grid is healthier by about 5 000MW,” he said.
Demand for electricity had dropped to 27 000MW in October from about 31 000MW in May.
Ramokgopa said Kusile’s units 2 and 3 would be returned to service during October and unit 5 would be fired up between now and December, raising generation capacity by 2 400MW.
“We are not out of the woods but we are turning the corner — there are green shoots, the fact we can go for 24 hours with no load-shedding, whether it is a weekend or a weekday, it is psychological, it is a major victory,” he said.
Ramokgopa warned that municipalities’ ballooning R64 billion debt to Eskom was a threat to its financial stability.
“There is no sign of that increase abating any time soon and this presents significant risk. Firstly, it is undermining the liquidity of Eskom when municipalities are not able to collect and this places a major hold on Eskom’s revenue side and reduces the ability to improve generation, transmission and distribution infrastructure,” he said.
Municipalities were struggling to deliver services as their income had shrunk due to non-payment for services, putting them at risk of being “systematically financially unsustainable”.
“We are working with Salga [the South African Local Government Association] and national treasury to find a solution,” he said.
The electricity minister said the high number of illegal connections put pressure on the grid and were a drain on revenue and a risk to lives, but the government needed to protect the poor and ensure they received services while confronting the problem.
“The problem of illegal connection is not only related to households drawing from the grid but those who are making profit but failing in their duty to pay municipalities,” he said.
Paying consumers were also suffering because of failing municipalities.
“There is an unacceptable situation where people are paying and they sit for days without electricity … They are victims of the municipality being unable to pay to fix failing infrastructure. The state must exert itself into this space and ensure we remove all the illegal connections and protect the poor … it is important to ensure we are not hammering the poor,” he said.
Eskom was focusing on bolstering the private generation of electricity and a pilot electricity wheeling programme with Vodacom was already showing “exceptional benefits”.
Wheeling is a method of sharing electricity. Eskom has approved wheeling of electricity generated by third parties since 2008.
“New generation capacity will be key, which is why we are celebrating those efforts, including the imports from neighbouring countries,” Ramokgopa said on Monday, adding that the National Energy Regulator of South Africa was still working on resolving the wheeling tariffs issue.
Eskom generation executive Eric Shunmagum said the division was aiming to ensure load-shedding did not hit higher than level four in the coming weeks.
“Generation’s objective is to sustain load-shedding to no more than stage four, stage zero during the day and past 4pm in the afternoon we will do stage two and the objective there would be to build up some of our water reserves,” he said.
Shunmagum said Eskom would step up its planned maintenance by between 1 200MW and 1 500MW between 15 December and 2 January, when many factories closed for their annual holidays.