Eskom: how to turn a nightmare into a dream

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Eskom: how to turn a nightmare into a dream

There are three messages in this loadshedding reality check. Firstly, ‘No pain No gain’; expect to be without power by up to 10 times more than currently – for three years from today. Secondly, the government must remove all bureaucratic blockages to allow available alternative energy sources to come online – and fast. Finally, Eskom cannot do this alone. This detailed game plan by Meridian Economics aims to ensure a stable electricity supply by 2025. It’s a bit like Britain’s “Back them up,” WWII plan for its troops, except without a Winston Churchill to lead or an effective government. I hate to put the kibosh on things, but we have an election due in 2024 and a ruling party embroiled in an internecine war, unable to serve the common weal. President Ramaphosa, who this February set up a virtual ministry to cut red tape, is fighting for his political life. Sorry, but I’m drawing from my bond to finance my own solar panels. Story courtesy of MyBroadBand. – Chris Bateman

South Africa faces Stage 8 load-shedding — but this plan promises to solve power cuts in two years

By Hanno Labuschagne

Meridian Economics has published a detailed game plan to solve load-shedding by 2024 and ensure a stable electricity supply in South Africa by 2025.

The risk-adjusted resource plan is contained in part B of the firm’s “Resolving the Power Crisis” study report.

In their preamble to the plan, the researchers warned that the absence of further urgent and drastic interventions would mean load-shedding would likely increase substantially in the coming years.

“As the reliability of the existing fleet of generators continues to decline and delays with procuring and connecting new capacity to the grid continue to mount, South Africa now faces the very real prospect of a return to stage 6 or even stage 8 load-shedding in the foreseeable future,” they stated.

“If the average annual coal plant energy availability factor (EAF) reduces from the current levels of approximately 56% to below 50% our modelling shows a widening generation capacity shortfall of between 5,000 MW and 7,000 MW, in the absence of drastic interventions.”

The researchers have estimated that the amount of load-shedding will increase by between four and ten times between 2023 and 2026 compared to 2021, which was the worst year of load-shedding yet.

The good news is that they believe their plan to contain, reduce, and eventually resolve load-shedding by 2024 was “eminently achievable”.

The bad news — under current policy and procurement measures, the probability of solving load-shedding is “unacceptably low”.

What needs to happen

The researchers said that the problem of load-shedding was so large and complex that no single player could solve it.

“The focus of the government’s intervention should be on mobilising thousands of economic actors throughout the economy to take the necessary steps to bring new capacity online urgently,” they explained.

“This must be achieved by opening doors, removing policy obstacles and red tape, and creating powerful incentives for delivering the right outcomes.”

They called for a diversified solution with contingency measures to avoid any single points of failure.

Key to solving load-shedding will be to use what generation is already available instead of focusing solely on building new utility-scale projects that take time and incur a high cost.

“This means, for instance, exploiting opportunities with the existing Independent Power Producer (IPP) Office procurement rounds, existing IPP projects, the 100 MW and 1 MW market segments, Eskom and municipal procurements,” the researchers said.

The researchers constructed a suite of power resources that could practically eliminate load-shedding by 2024, as shown in the infographic below.

For the game plan to succeed, the researchers explained several changes that needed to happen:

  • A substantial increase in the likelihood that projects from existing IPP Office procurement rounds can close and then minimise further PPA signature delays.
  • Maximised benefits that can be obtained from Renewable Energy Independent Power Producers Procurement Programme Bid Window 6 by more than doubling its size, removing project size limits, and strengthening incentives for earlier connection.
  • Drastically increased incentives to expedite the ramp-up in renewables built in the <1 MW and 100 MW market categories to the maximum rates that can be achieved.
  • The utilisation of the potentially large opportunity to obtain additional energy from the multitude of existing and new projects (big and small) that are distributed throughout the grid.
  • Urgent installation of additional thermal peaking capacity and expanded diesel storage at existing speakers.
  • Procurement of a large amount of Demand Response (DR) capacity from DR aggregators and a large amount of additional battery storage.

In creating their combination of resources, the researchers developed a base case with several assumptions for generation up to 2026.

Firstly, it assumes that only 50% of Bid Window 5’s solar PV and 70% of the wind projects will be completed as scheduled due to local content issues and recent technology cost increases.

They have also excluded any gas-based risk mitigation power projects, such as those operated by Karpowerhsip, due to complexity, excessive pricing, and ongoing litigation.

The remaining risk mitigation projects include only solar PV, wind, battery storage and peaking plants.

“We also assume that not all non-gas projects will close and that only 375 MW of firm capacity will be available to the grid,” they added.

“Under the current structure of the programme, these plants must be dispatchable to Eskom between the hours of 05: 00 to 21: 30.”

“In the Base Case, the RMIPPPP is represented as a dispatchable generator and not as distinct solar PV, wind, battery storage and peaking capacity.”

The researchers also included Eskom’s plans to add an extensive distributed battery energy storage system and the decommissioning of various coal power plants into the calculation.

The biggest chunk of power is expected to come from distributed solar power located at homes, offices, businesses, and power-demanding industries across the country.

Overall, the researchers’ plan shows 27,262MW of capacity added from the following sources:

  • 10,000MW of distributed PV power
  • 5,718MW of dedicated large-scale wind power
  • 5,321MW of dedicated large-scale solar PV power
  • 1,000MW of distributed wind power
  • 1,500MW of demand response capacity
  • 1,000MW of 1-hour battery storage
  • 1,000MW of 4-hour battery storage
  • 108MW of coal power
  • 100MW of concentrated solar power (CSP)

The researchers provided a full breakdown of exactly where the capacity for their plan will come from up to 2026, which they outlined in the table below.

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