Is the energy action plan on track?

You can also listen to this podcast on iono.fm here.

FIFI PETERS: Earlier today the minister of electricity, Kgosientsho Ramokgopa, admitted that Eskom dropped the ball last week from a planning point of view when the country returned to Stage 6 load shedding. But Minister Ramokgopa said that he was confident that Eskom would be able to return 5 000 megawatts of generation capacity to the grid by tomorrow [July 18, 2023] to avoid any more outage slips for now.

I am joined by Roger Lilley, an independent energy analyst, for more on the story. Roger, thanks so much for your time. I imagine that you may have been listening or may have been watching the headline flashes from the minister of electricity’s briefing earlier. What did you make of what you heard or saw?

ROGER LILLEY: Good evening, Fifi. Thank you for inviting me to your show, and good evening to your listeners. Yes, I did sit through the video feed. I don’t know if you watched it yourself, but there were hiccups every now and again; the image froze and so on. Nonetheless I was able to get the gist of what he was saying. What he has done is he gave us a bit of a spin, to be truthful, and found a way to show that although things are not as good as they have been or could be, he has found a way of showing that they’re not as bad as they could be. [Chuckle]

Read: Beware government’s spin on ‘fixed’ Eskom

He chose four areas in particular on which he focused in terms of Eskom’s performance. He spoke about generation capacity, where he said that things are a little better at 27 700 megawatts – which is not good at all because that’s just slightly over 50% of what Eskom actually has on paper in terms of power generation; it excludes the IPP power that should be on the grid as well.

So in fact the electricity availability factor is actually significantly weak at this time – which of course, we saw presented to us when we jumped from Stage 4 to Stage 6 over a couple of days of bad weather, which of course should have been for predicted because the Weather Bureau [had given] us the warning of that cold weather coming up.

FIFI PETERS: On that bad weather, I hear you in terms of a planning point of view, and I suppose it feeds in nicely to what the minister said – that they had dropped the ball from a planning point of view. But prior to that bad weather and South Africans getting chilled by the cold while enjoying the snow, it seemed like the Energy Action Plan was on track. I don’t know if those are your sentiments. If that’s the case, how far do you reckon we have regressed right now as we speak?

ROGER LILLEY: Well, let’s be fair. Load shedding, if that’s your measurement, has decreased in terms of the stages, and therefore it looks from an outsider’s perspective as though things are getting better.

What we need to do really is to drill down and find out how it was that load shedding stages were reduced. What happened indeed was that less than normal maintenance was undertaken, and the diesel-fired peaking plant was used – by the minister’s own admission today – as base-load generators, for which of course they’re not supposed to be used.

Read: Stage 6: How did Eskom get it so wrong?

And on top of that, we’ve used the water-storage units to add to the generating capacity. The result was that when we went to Stage 6, we’d run out of diesel and we’d run out of water. So suddenly, the true scene is then visible because we shouldn’t be using the peaking plant – either from the water reserves or from the diesel generators – as base-load generators, which is what they’ve been doing.

The fear with this is that if those units were to fail, we then really are in trouble because we have nothing else to fall back on. That’s my perspective.

FIFI PETERS: You mentioned the IPPs – and there have been a lot of investments made in the space by private companies, independent companies who are doing all kinds of great things, investing in wind, investing in solar to get a whole lot more power in the system, reducing their energy dependence on Eskom and perhaps – further down the line – being able to sell it back to the utility. To what degree then could all this activity that’s happening in the IPP space soften a potential worst-case scenario for Eskom right now?

ROGER LILLEY: Right now the capacity of the grid to accommodate additional renewable energy is limited. Even if more generating plants were to be built, they can’t be connected to the grid right now. This is particularly true in the areas where traditionally these [facilities] are being built – and that is in the Northern Cape and the Karoo and so on.

What would have to happen is that the IPPs would need to start building their equipment near or at existing power stations so that they can easily inject that power into the grid at the designed points of injection. Our grid was not designed to have power injected along the way as is being done, so we are experiencing issues with that.

What needs to happen is Eskom needs to spend a whole lot of money upgrading the grid to make it a smart grid with digital technology, which will allow the grid to accept power injections all the way along, anywhere along the grid – theoretically at least –

thus making it possible for mines and other big companies to be able to sell their surplus-generated electricity back into the grid. Right now that’s not possible in most cases because of the way it was designed and the state that it is in right now.

FIFI PETERS: And the lack of funding, I’m sure.

ROGER LILLEY: Sure. It’s an expensive exercise, an expensive exercise anywhere. I’ve heard that had Eskom not been in the financial bind that it is in, it would be investing money into its infrastructure. But we are not there. We’ve already got to the point where we’ve got R400 billion worth of debt. The central government is bailing out as much as possible, but it’s taking time because the money’s got to come from somewhere.

There’s no money right now to start developing smart grids and things like that, but that’s exactly what’s going to be needed if we are going to migrate away from coal into numerous renewable energy plants dotted around the country.

FIFI PETERS: Roger, the minister also made reference to the goings-on at Koeberg, the nuclear power station, admitting that there had been some delays there in terms of returning one of the units online before the second unit has to be shut for some maintenance or the replacement of a generator there. Your take on that division – Koeberg specifically?

ROGER LILLEY: It’s very sad that that’s happened. Koeberg has always been the best-run power station in the fleet. But there were delays, there were issues related to the fact that the decision was taken to extend its life by another 20 years. That was originally not approved, and then the International Energy Agency had to get involved to verify whether in fact this would be safe to do. It seems that that has now been passed but many, many months have been lost in all of this.

We know that the first steam-generating unit that was imported, I think from France, was incorrect in its design and had to be scrapped and another one had to be made – I believe in China – and brought to South Africa.

All these delays have just formed a chain of events that have brought us now to the point where these units look like they’re both going to be off simultaneously for some time running into 2024. Together they give us 1 800 megawatts, almost two stages of load shedding.

It really is regrettable that that’s happened – or been allowed to happen.

FIFI PETERS: Sure. Well, one can only at this stage hope for the best in terms of the maintenance work that’s being done there – and that that eventuality that you’re talking about where both units are down doesn’t actually happen.

I’m reminded of an event that took place last week in the form of the US Trade Development Agency. They made a fresh commitment to Eskom. They committed $1.3 million in grant funding. It’s going towards the situation – investing in some innovations and technology and all of that and how to improve Eskom’s standing in that particular light. I don’t know if you saw the announcement regarding that investment – and to what degree do you think that this could be a positive? That foreign entities are putting new money into Eskom is surely a sign of some form of confidence.

Read: US makes investment in Eskom grid

ROGER LILLEY: Yes, it’s a very good sign. One must remember that America in particular has a vested interest in keeping South Africa’s economy going, and they’re prepared to make these kinds of investments. There are, as you know, American companies operating in South Africa – and even Amazon apparently is going to be starting up an operation in South Africa. So there’s more interest in South Africa from American companies as well as European and other companies.

Other promises and offers have been made, and we wait for that money to come in. The concern often is how that money will be used and will it be sufficient, and will it achieve what it’s been sent for. So we have to wait and see.

But certainly any investment in South Africa is a sign of confidence in the country, the government and its institutions.

FIFI PETERS: Agreed there. Roger, thanks so much for joining us to give us your take on the energy briefing that happened a little earlier today.

Roger Lilley is an independent energy analyst.

Read:
Grid storage is the missing link in SA’s electricity crisis
Stalled SA power projects for 1 850 MW risk losing grid access