The department of mineral resources and energy has hit back at critics who have spoken against its latest draft report on South Africa Renewable Energy Master Plan released in July. (Dean Hutton/Getty Images & Luca Sola/Getty Images)
The renewable energy industry faces a serious setback after electricity minister Kgosientsho Ramokgopa said that renewables cannot be a solution to the energy crisis that currently faces the country.
During a media briefing last week, Ramokgopa said some generation projects are producing “stranded electrons”, which the country can’t benefit from because there is no grid capacity to deploy this form of electricity.
Eskom has been struggling to provide sufficient power and has been unable to meet supply and demand for the country which causes it to switch off some of its units for certain periods to avoid a total blackout.
The department of minerals and energy explained that the lack of grid capacity was caused by the backlog of maintenance in Eskom’s older plants and mismanagement during the development of newer plants, which caused the generation capacity of Eskom to dwindle.
“With an average plant age of 40 years, breakdowns and maintenance have amounted to as much as a 20GW loss in generation capacity,” they said.
According to Eskom’s Transmission Development Plan, released in October, Eskom indicated 53GW of new generation (from mostly renewables) was needed by 2032 to ensure energy security. To support this new generation, roughly 14 200km of transmission network must also be built.
The transmission development plan would cost about R372 billion over the next 12 years to finance the grid’s expansion. Ramokgopa has argued that this would be too expensive for the utility.
The grid needs strengthening
Ramokgopa echoed the same sentiments of energy minister Gwede Mantashe, who has argued for years that renewables do not have enough baseload — the minimum capacity required to supply the electrical grid at any given time.
Chief to insufficient baseload in the grid is that Eskom is failing to supply the demand needed to power the country, said Ramokgopa on Thursday during a media briefing.
Although this is a problem, Ramokgopa assured South Africans that the government was in discussions with Eskom on prioritising the expansion and strengthening of the grid.
The lack of grid capacity has forced the the department of mineral resources and energy to delay Bid Windows (where independent power producers bid to supply power to the grid) four, five and six. This has also delayed commercial close taking up to six months.
The list of preferred bidders in Bid Window five was released in October 2021 with the signing off on the projects only being concluded at the end of 2022, way beyond the originally anticipated deadline of April.
Last year in July, President Cyril Ramaphosa announced an energy-mix solution to enable the incorporation of renewable energy into the Eskom grid. He released a five-intervention action plan to “confront the energy crisis”, with “intervention three” being to “accelerate procurement of new capacity from renewables, gas and battery storage”.
During the media briefing, Ramokgopa said although the energy mix announced by Ramaphosa last July was a great idea, it is not a feasible option to end load-shedding.
“South Africa will continue to need coal-fired power stations to ensure the baseload of energy that renewables, though essential, cannot provide. If they can provide the baseload, let them invite me and show me what the solution is when there is no wind and there is no sun at night to keep the lights on,” he said.
He questioned the wisdom of shutting down old power stations at the current rate rather than refurbishing them to extend their lifespans, because closure would mean removing badly needed megawatts from the grid with nothing to replace them. This would worsen the load-shedding crisis crippling the economy.
Speaking to Mail & Guardian, Tutwa Consulting Group Just Energy Transition Programme senior associate engineer Stuart Reneke said the delays in rolling out renewable energy projects has caused them to fall behind.
Reneke argues that to improve the frustrations of renewable energy bidders, South Africa needs a comprehensive monitoring system to ensure it is able to achieve a just energy transition.
“The absence is glaring of a visible tracking, monitoring, reporting, and forecasting mechanism. This is a key component in transforming a century-old electricity infrastructure in a strict and ambitious timeframe.
Such a mechanism would have enabled agility in adapting to changing contexts, and the lack thereof has surely contributed to South Africa’s renewable energy rollout falling behind.”
Reneke added that should the rollout of the related projects continue to be delayed, the energy transition will take far longer than anticipated.
The South African Wind Energy Association (SAWEA) — which did not make the cut for Bid Window five — said the delay in fixing the baseload problems had caused many companies to be left out of the bidding window periods.
The association said this action threatens investor confidence in the solar and wind power sectors.
Niveshen Govender, chief executive of SAWEA, said: “We agree with minister Mantashe that investment into the grid infrastructure must be prioritised and accelerated to allow for more new generation capacity. However, grid access processes are providing little confidence in articulating how grid capacity is being allocated and we view the announcement as a missed opportunity, given our dire need for electricity in South Africa.
“We strongly urge immediate intervention by key role-players to unpack the challenges with the solar and wind sector and find viable solutions to unlock the hurdles facing the progression towards a secure energy system.”
Bidders who lost out on Bid Window five and six told M&G that they had lost about R100 million in preparation to provide services
“The bidders have collectively invested about R100 million in these projects, just to be left out due to a lack of connection capacity in Eskom’s transmission grid in the Northern, Eastern and Western Cape,” said one of the aggrieved bidders.
Responding to questions, Lelanie Swart, strategy, risk and compliance manager at the Department of Energy South Africa IPP office said it has procured 134 projects and 11 905MW to date from the Renewable Energy IPP Programmes (Bid Windows one to six).
“Risk Mitigation IPP Programme, and Energy Storage bid windows on the basis of the ministerial determinations were made under IRP2010 and IRP2019. To date, 89 projects are fully operational and are supplying 6 106 MW electricity to the grid. Eight projects (745MW) are currently in construction. The remaining projects are at various stages of concluding contracts,” she said.
The contracts signed in Bid Window four and five have been signed to start operating in the Northern Cape and Mpumalanga.
Try get off the grid
The South African Photovoltaic Industry Association chief executive, Frank Spencer, encouraged households to embrace renewable energy to help relieve the grid.
“Solar energy is the most affordable way of getting off the grid as the country faces heavy stages of load-shedding.
“Solar panels and batteries can be used as the long-term investment that is the most affordable option. The average cost of electricity it produces is the lowest of any of the technologies that are available,” he said.
Mandisa Nyathi is a climate reporting fellow, funded by the Open Society Foundation for South Africa