Eskom to accelerate efforts for new generation capacity in three months

Monday, July 25, 2022

Eskom will on an urgent basis in the next three months accelerate efforts to add new generation capacity to its faltering grid.

The intervention is among a raft of energy security plans for the country announced by President Cyril Ramaphosa during an address to the nation on Monday evening.

They come after the country has in the past three weeks experienced hours-long intermittent electricity outages as the power utility was unable to meet demand due to various challenges it was confronted by.

Over the past 10 days, President Ramaphosa has held several consultations within government, and with stakeholders and energy experts to find a collective solution to the energy crisis.

Among these were consultative meetings with business, civil society, labour and leaders of political parties represented in Parliament on Monday. On 16 July 2022, President Ramaphosa also visited Tutuka Power Station in Mpumalanga and Eskom Megawatt Park Headquarters in Johannesburg. He further held engagements with power station managers to gain an understanding of the challenges affecting Eskom's generation fleet.

WATCH |President briefs on measures to secure power supply  

Immediate measures

Addressing the nation, the President said: “As an immediate measure, surplus capacity will be bought from existing independent power producers. These are power plants which built more capacity than was required and can now supply this excess power to Eskom.”

As part of addressing the shortage of megawatts, Eskom will purchase additional energy from existing private generators such as mines, paper mills, shopping centres and other private entities that have surplus power.

“A number of our neighbouring countries in Southern Africa, such as Botswana and Zambia, have more electricity capacity than they require. Eskom will now import power from these countries through the Southern African Power Pool arrangement.

“Eskom will also use interim power solutions, such as mobile generators, to supplement current generation capacity for a limited period. Eskom will implement a programme that encourages efficient energy use by consumers to reduce demand at peak times.”

The set of additional actions the President announced are aimed at improving the performance of Eskom’s existing fleet of power stations.

Secondly, he said, the actions would accelerate the procurement of new generation capacity.

“Thirdly, [they] are intended to massively increase private investment in generation capacity. Fourthly, [they] are designed to enable businesses and households to invest in rooftop solar; and, finally, [they] are directed at fundamentally transforming the electricity sector and positioning it for future sustainability,” he said.

Challenges

Illustrating the extent of the challenge, the President said while the country had installed capacity to produce approximately 46 000 MW of electricity, 32 000 MW were used at peak times.

Of this, only 60% of the installed capacity was available at any given time due to some units going through planned maintenance and others having unplanned outages. This was due to the power stations’ old age.

“The construction of our newest power stations, Medupi and Kusile, started late and they have experienced several delays and some design flaws. These challenges are being addressed.

“As a result of this, Eskom deferred essential maintenance to keep the lights on, which is causing breakdowns and failures now. The performance of some of Eskom’s power stations have been further worsened by extensive theft, fraud and sabotage.”

To end load shedding, however, the President said the country needed to urgently add much, much more capacity to the grid.

“Our second priority is therefore to accelerate the procurement of new capacity from renewables, gas and battery storage,” he said.

In this regard, the President said the relevant government departments were working together to ensure that all projects from Bid Window 5 of the renewable energy programme could start construction on schedule.

Interventions

Government has already taken important steps to increase generation capacity and diversify the energy supply.

“One of the first steps we took to address the electricity shortfall was to revive the renewable energy procurement programme in 2018. Since then, over 2 000 MW of solar and wind power has been connected to the grid through Bid Window 4 of the programme.

“A further 2 600 MW of capacity has been procured through Bid Window 5, which will begin to add capacity from early 2024. We have started to diversify generation by allowing parties other than Eskom to generate electricity.

In June last year, government raised the licensing threshold for new embedded generation projects from 1 MW to 100 MW, thus removing the licensing requirement for generation projects up to 100 MW that are connected to the grid.

He said this measure enabled these generators to have the ability to sell electricity to one or more customers.

“We also changed the regulations to allow municipalities to procure power independently. A number of municipalities are already in the process of doing so,” he said.

Eskom recently made land available next to its power stations in Mpumalanga for renewable energy projects, which were expected to unlock 1 800 MW of new capacity.

The amount of new generation capacity procured through Bid Window 6 for wind and solar power will be doubled from 2 600 MW to 5 200 MW.

Requests for proposals for battery storage were expected to be released by September this year, with a further request for gas power as soon as possible thereafter.

“The Minister of Mineral Resources and Energy will issue a determination for the remaining allocations in the Integrated Resource Plan 2019, and will open further bid windows on an expedited basis.

“To ensure effective planning, the country’s Integrated Resource Plan is being reviewed to reflect the need for additional generation capacity and our climate commitments. Third, we are accelerating greater private investment in generation capacity,” he said.

Last year government announced the raising of the licensing threshold to 100 MW.

The move was widely welcomed, the President said, adding that it had unlocked a pipeline of more than 80 confirmed private sector projects with a combined capacity of over 6 000 MW.

He said the power utility had identified additional land that would be released for this purpose.

Also, Eskom will be constructing its first solar and battery storage projects at Komati, Majuba, Lethabo and several other power stations. These will result in over 500 MW being added to the system.

“These actions are significant and they will make a difference over the coming months and years. What the most recent load shedding has made clear, however, is that the actions we have taken and continue to take are not enough.

“We are therefore implementing additional measures to achieve long-term energy security and end load shedding for good,” said the President.

In an effort to fixing Eskom and improving the performance of its existing fleet of power stations, government will over the next 12 months increase the budget allocated for critical maintenance to increase the reliability of its generation capacity.

“We are cutting red tape that has made it difficult for Eskom to buy maintenance spares and equipment within the required period to effect repairs,” he said.

Click here for more on the Energy Action Plan

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