The government’s long-term energy plan for the economy, which was published on Friday, warns of “an immediate risk of huge power shortages” that could last four years due to Eskom’s poor performance.
The gazetting of the long-delayed Integrated Resource Plan (IRP) comes as load-shedding — rotational power cuts — was reinstituted last week when Eskom power plants experienced a raft of unplanned outages.
Aside from long-term additional power capacity, the plan warns of an immediate risk of energy shortages.
The plan maps out how SA will meet its energy needs by 2030, when coal is expected to account for 43% of installed capacity, while wind and solar power will account for 33%.
Aside from long-term additional power capacity, the plan warns of an immediate risk of energy shortages.
Nonperforming units at three of Eskom’s older power stations may need to be retired earlier than expected. New power stations Medupi and Kusile have also been "de-rated" meaning that they are unable to provide the full complement of energy for their rating.
While some new generation is in the process of coming on line — Medupi and Kusile still have units that have not yet been commissioned and several independent renewable energy projects are under construction — these will not be enough to close the gap.
The risk of energy shortages gets worse when considering that many of Eskom’s plants do not comply with environmental standards and are unlikely to meet the deadline for compliance due to the utility’s constrained finances and project execution delays. If noncompliant power stations were to be shut down, “the reality of power disruptions manifests significantly from 2019 onwards”, the IRP says.
Deputy director-general of the department of energy Jacob Mbele said the government would soon issue a request for information to the market to solicit ideas on filling the gap over the next four years.
After the IRP announcement on Friday, energy experts said that the government lacked urgency in dealing with the supply gap and needed to pursue obvious interventions.
“The only short-term option is freeing up distributed energy generation,” said UCT professor Anton Eberhard.
Distributed generation, also known as embedded generation, refers to small-scale, on-site, power generation for own use. While the IRP says that increasing the distributed generation allocation presents an opportunity to address the immediate energy shortage, it is short on further detail.
Lifting regulatory barriers for distributed electricity generation is simple. It requires the energy minister to gazette an amendment to schedule 2 of the Electricity Regulation Act that exempts small projects up to 10MW from having to obtain a licence from the national energy regulator and instead require the regulator to institute an efficient, automatic registration system.
The government could also issue directives to Eskom and municipalities, backed by more explicit requirements in transmission and distribution licences, for grid-connection and wheeling procedures to be expedited.
These steps would liberate a huge pipeline of investment, contributing not only to electricity supply security but to President Cyril Ramaphosa’s priority policies aimed at boosting investment, economic growth and jobs.
Business Unity SA (Busa) vice-president Martin Kingston said business is engaging the regulator on increasing the scope of distributed electricity, which should be addressed "as a matter of urgency".
Busa has also pressed the government to procure another round of renewable energy from independent power producers with urgency. But in the briefing on Friday, mineral resources & energy minister Gwede Mantashe did not announce a new round of procurement as had been hoped.
In a series of tweets after the announcement, Eberhard, who is on the president’s task team on Eskom, said Mantashe had "missed the opportunity to support the president’s investment drive" by failing to announce the procurement of capacity.
Kingston, however, said he believed the publication of the IRP has effectively opened the way to launch round five of renewable power procurement, which Busa strongly supports.
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