Fanele Mondi, CEO of the Energy Intensive Users Group (EIUG), says members — the biggest hitters in industry, mining and manufacturing — are prepared to ease their electricity demand significantly so Eskom can boost its maintenance levels; but the power utility and the government need to come to the party.
“As the EIUG we feel strongly that we cannot have a fleet of coal-fired power stations operating at 50%. That’s a lot of energy that is not available. If we could improve that by improving maintenance, we could draw back some of the energy we are losing on assets which should be functional but are not.”
By co-ordinating their own maintenance and reducing their demand for electricity the country’s biggest users could give Eskom the space to do better maintenance, says Mondi, a mechanical engineer who worked at Eskom for more than 23 years, holding senior management positions in its generation and distribution divisions.
But the way plants continue to fail despite Eskom having performed maintenance on them has prompted hard questions about the utility’s capacity.
“Undertaking co-ordinated maintenance entails significant sacrifices because it affects production plans et cetera, so our members are asking: can they be sure that Eskom will utilise the time we give them effectively to bring the improvement we need to see?
“Co-ordinating their maintenance won’t come cheaply and they need to know their sacrifices will not be wasted.”
Knowing when the “crunch periods” are would help group members to co-ordinate the times when they shut down for maintenance to relieve the system of stress, but this crucial information is either not forthcoming or it’s inaccurate.
Another problem is that Eskom’s focus on demand-side management, which it announced last week, has come too late to make a difference to load-shedding this winter.
“We’re engaging our stakeholders to see what can be done but I think time has run out to do anything this winter,” says Mondi.
Big users have also signalled their willingness to reduce pressure on the system by reducing their usage for short periods, but little has been done to incentivise this.
“We could do with better incentivising to get more companies to participate, whereby they shut down 200MW of their plant for two hours a day. That would go a long way, but it needs to be incentivised to balance their costs.”
It is important that while we are transitioning we also ensure energy security, but not to the extent that this compromises our net-zero goals
— Fanele Mondi
Mondi says the offer by big energy users to undertake co-ordinated maintenance has led to questions from the competition authorities, “but the nature of our crisis is such that we need to explore all options instead of just dismissing them at face value”.
These concerns were shared at last week’s inaugural national indaba on demand-side management, but regulatory bodies such as the competition commission and the National Energy Regulator of South Africa, whose buy-in will be crucial, did not attend.
In addition to their more immediate responses to the energy demand crisis, large mining and industrial members have a 4GW-plus pipeline of generation projects that can be connected to the grid over the next five years, he says.
Except there might not be enough grid capacity. He says it will take at least five years to strengthen the grid, though the transmission development plan estimates up to 10 years.
Critical challenges include funding.
“Eskom, as we know, is not in a good balance sheet position to do major capex, but we understand that some of the R8.6bn COP26 pledge will be used to develop the grid. So, there is at least that.”
What about concerns that delaying the just energy transition by extending the life of coal-fired power stations, which Mondi supports, will put that funding at risk?
“If we delay it for a long time then certainly it may jeopardise that.”
But for intensive users energy security is vital, he says.
“Without it these companies may as well close, and our economy cannot afford that. So it is important that while we are transitioning we also ensure energy security, but not to the extent that this compromises our net-zero goals, which we still need to achieve.”
The EIUG believes it should be possible to postpone the decommissioning of some power stations, such as Komati, for three-five years without spending a lot of money.
Komati was operating with an energy availability factor of 80%-90% when it was shut down “because its time had arrived”. “But if you have energy security constraints, is that really a good move? Or should you say, ‘Let’s push this unit a little longer until we have these other options up and running.’”
These include the government’s independent power producer procurement projects, which “need to be enabled to go through ASAP. All the paperwork has been done and we need those megawatts on the grid.”
Private sector generation projects have also moved far too slowly, because in spite of removing the licensing limit the government has failed to provide an enabling environment, “specifically the wheeling framework which allows movement of electrons between different grids”.
“Municipalities all have different rules, which makes it unattractive for people to contract with different partners, so that needs to be sorted out ASAP.”
In 2020 the Council for Scientific & Industrial Research estimated that if the self-generation cap was lifted to just 50MW this could unlock 3,400MW of small- to medium-scale grid-connected electricity by 2022. So why didn’t it happen?
“Lifting the cap alone was never going to be sufficient. You had to create an enabling environment. We still have problems with permit authorisations, environmental approvals, wheeling arrangements and a whole lot of things that are still not happening.”
The government announced it would develop a one-stop solution so all permits and approvals could be co-ordinated at a single point, but this hasn’t happened.
“Every department is doing its own thing, and every department has its own time frames and priorities. So what might be urgent for you may not be urgent for the department of energy,” says Mondi.
“The reality is that most of the time projects take up to 42 months to get online, with only about 18 months of that, or less, being the actual construction. This, too, is a key aspect of demand-side management.”
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