The spectre of winter’s electricity constraints

SIMON BROWN: I’m chatting now to Fanele Mondi. He’s CEO of the Energy Intensive Users Group [EIUG] of South Africa. Fanele, I appreciate the time today. The Energy Intensive Users Group – who are the members? I imagine large industry, and that’s going to be miners.

FANELE MONDI: Yes, it includes miners. But there are also some manufacturers like your smelting companies who are also big users.

SIMON BROWN: Of course. They would be huge users. How much energy? Your users – if we look at the grid as a whole, are they a significant proportion of the total users of Eskom’s supply?

FANELE MONDI: Yes, quite significant in terms of the large power users. They may not necessarily all be our members, but we’re talking more or less of close to 40% [of the] consumption.

SIMON BROWN: Oh, wow.

FANELE MONDI: Yes. So it’s quite a significant portion of the Eskom consumption.

SIMON BROWN: And the proposal that union members have put out? Obviously Eskom has two challenges. One is just plants breaking down. The second is maintenance, which is critically needed after I think a long time of insufficient maintenance. You’re saying that your members could coordinate with Eskom around maintenance. How would this work?

FANELE MONDI: I think there are basically, in terms of the concept we’re proposing, two aspects. One aspect is dealing with the constraints. Let’s take for example this winter. If, for instance, June is going to be a particularly difficult month and a member or members … are scheduled … last August, say, instead of taking that load in July/August, when we have sufficient power, for example, why not take it in June, where you do your outage in June and by so doing you … the depth of the load shedding, in terms of taking off power plants voluntarily to do your maintenance. And then, come August, when you had planned to do your maintenance you are back in production and there’s sufficient energy for everybody to share – or at least enough, because I think we’ll not have enough all the time. That’s one aspect. So you use it as a solution for that purpose.

But the second one is where you’ll use it probably for the medium to long-term goals. In that case you could say that if Eskom needs to do maintenance but the system is tied [up] such that it’s difficult to find that time, and some of the industry players shut down their plants to do their own maintenance, it then gives enough space for Eskom to do its own maintenance as well.

Those are the kind of ideas we’re trying to share with the various stakeholders in the hope that once that is done we can then formulate a proper plan to say how you execute it.

SIMON BROWN: I hear you. That makes perfect sense. You are having the conversations obviously with your members, but with the parastatal, Eskom, at the same time.

FANELE MONDI: Yes. We are trying to get everybody involved to buy into the thing and make it work.

SIMON BROWN: Okay. Moving on from that, because that works and that that could help to a degree for winter. What sort of pipeline? We are hearing a lot of the big energy users, particularly mining as you mentioned, manufacturing as well, looking at their own energy generation. What sort of pipeline have your members got that they’re planning over I suppose the next three to five years, because these are some lead times on these projects?

FANELE MONDI: Overall the plan has been growing. Initially over probably the next 10 years we’re looking at 9 000 megawatts, and that number I understand has since grown to 10 000 megawatts, which is quite a significant pipeline. But of that 9 000/10 000 megawatts about 4 000/5 000 megawatts is likely to materialise in the next four to five years. Obviously some of it will start coming in as early as next year, and even this year. I don’t have the exact numbers at this point. That’s what the private sector as a whole will provide.

In terms of our direct members, the EIUG, of that plan about 4 400 [megawatts] or so is directly attributable to our members out of the 9 000/10 000 megawatts currently on the pipeline.

SIMON BROWN: That is a very, very chunky number, considering that each stage is 1000 megawatts. The challenge then [is the] transmission grid capacity, and even just the ability of wheeling power. Generation is one issue; the next is moving it around the grid. Eskom has significant challenges there as well.

FANELE MONDI: True, indeed. The wheeling part, though, is not so much of an Eskom challenge because Eskom has a fairly mature wheeling process. Yes, it could be improved and we’re looking into that. But the challenge is when you have different networks, which may include municipalities because each municipality typically will have its own wheeling rules, which then make movement between different networks extremely difficult – [the] movement of power between different networks. So that’s where the challenge is.

However, Eskom’s challenge is on grid availability, and you would appreciate that in South Africa we have certain areas where the resources are better than others, typically for wind. The Western Cape and the Eastern Cape seem to have really good wind resources, and the Northern Cape, and a very good solar resources network [that] we understand is quite … right now.

So it is difficult to establish new projects, and they work with … that power to the areas where the power is required. That’s where Eskom has a problem in terms of the grid constraint.

There are various options which are on the table. One that seems to be more workable is to ask: can’t then move these projects into areas where there’s a better grid connection? Eskom has done [considerable] work in terms of that – attracting projects into the Mpumalanga area where we still have a very good grid. But in the long run we still have to develop that grid along the Western Cape, the Eastern Cape and the Northern Cape to tap into that. Obviously it’ll take time and it’ll take resources in terms of finance as well as running those projects.

SIMON BROWN: I hear you on that. A last question. A lot of plans, a lot of solutions – a lot of these are more in the immediate term, and [in] the immediate [term] winter is looming. You made a point that you’ve got concerns around Eskom’s focus and demand-side management; it’s there, but it’s potentially not going to help us for this winter over the next couple of months.

FANELE MONDI: We think there are the various aspects of demand-side management. Some of them require, like any other project, to be planned … and then you start seeing results. Our sense is that for those [that] are probably late there is a March … that’s going to happen – certainly not at the beginning of winter. Maybe we can start seeing the results towards the end of winter, but in September there is good potential. Eskom has outlined its plans, which are quite encouraging – what they want to do and how they’re going to incentivise and invite players to come in and utilise those incentives.

So there is something happening. But all we are saying is that it’s probably not going to realise in megawatts this particular winter, certainly not at the beginning. However, there are certain behavioural things which we could still do, which centre around communication, where we could still encourage people to use less power, to respond at the time when the constraints are severe, as well as the general efficient use of electricity. This really doesn’t require much investment other than communicating to people what contribution they can make.

So I think that’s where the issue is at the moment.

SIMON BROWN: I like that. A lot of it might just be little things. We need to get the knowledge out there, and we can make differences.

We’ll leave it there. Fanele Mondi, CEO of the Energy Intensive Users Group, I appreciate the time today.