Busisiwe Mavuso | BLSA calls on DMRE to urgently address power generation shortfall to prevent loadshedding beyond 2024

POSTED ON: November 4, 2022 IN by Admin
Komati Komati

By Busisiwe Mavuso

It’s almost impossible to reach higher EAF levels by increasing maintenance and trying to extend the life of coal plants because Eskom plant has deteriorated so extensively as a result of previous maintenance neglect.

Last week Eskom shut down its Komati power station. The meticulous planning that has gone into repurposing the plant to produce 370MW of renewable energy without any job losses offers a strong template for future stations that are nearing end of life.

This is a highly significant moment in our goal of reaching net zero carbon emission commitments and provides a template for future decommissioning as part of the just energy transition.

Eskom has transferred the majority of Komati employees from the power station to support and augment skills in other power stations and areas of the business in line with operational requirements. The Komati Training Facility is already operational and is reskilling workers and members of the community. It was developed by the South African Renewable Energy Technology Centre of the Cape Peninsula University of Technology and the Global Energy Alliance for People and Planet. Funding was secured from development finance institutions.

In a press release, Eskom states that the Komati Repowering and Repurposing project is one of the largest coal-fired power plant decommissioning, repowering and repurposing projects globally and will serve as a global reference on how to transition fossil-fuel assets. Next up are Camden, Hendrina, Arnot and Grootvlei and prefeasibility studies to repurpose them began in 2016.

Once repurposed, the plants will be producing more clean, renewable energy than what the creaking coal-fired plants have been able to generate as they neared end of life. And they’ll have an energy availability factor (EAF – the amount of time that a plant is able to produce electricity over a certain period, divided by the amount of the time in the period) of close to 100%. Komati was only generating 121MW at an EAF of only 16.8% before it closed but it will be converted into a renewable generation site powered with 150MW of solar, 70MW of wind and 150MW of storage batteries.

There is a serious hurdle on the way forward, however, in terms of generating enough new capacity not only to match the amount being decommissioned, but to ensure there’s sufficient stable supply to meet demand and end load shedding.

On that critical issue, much focus has been on raising the EAF to ensure an uninterrupted supply.  Eskom’s overall EAF has fallen from 65% last October to below 60%, which translates to just under 32GW of production against demand of 32GW-36GW.

It’s almost impossible to reach higher EAF levels by increasing maintenance and trying to extend the life of coal plants because Eskom plant has deteriorated so extensively as a result of previous maintenance neglect. And even if this were somehow financially feasible it would directly oppose the minimum emissions standard (MES) set by the Department of Forestry, Fisheries and the Environment. The existing fleet generation needs to ramp down from about 50GW to 15GW by 2050. This goes further and faster than even Eskom’s planned transition. Eskom says the MES puts 15GW of capacity at risk immediately and 30GW by 2025. It has appealed against the MES targets so it can continue to operate legally, saying at least R300bn is required to achieve full compliance and would take about 10 years to complete.

The ideal appears to be to find a balance between spending enough on maintenance to reduce breakdowns and keeping the EAF at around 60% while generating new capacity as fast as possible. Retrofitting old coal stations will create perverse incentives to extend operations, further slowing down decarbonisation, says Eskom CEO André de Ruyter.

He says that by 2030, 50-60GW of renewable capacity will need to be added, assuming no incremental demand from economic growth.

National Treasury has pledged to shift between a third and two-thirds of Eskom’s R400bn debt onto the sovereign balance sheet and while that will free up capital from lower debt service costs, it doesn’t come close to being enough to fund the just energy transition. Eskom estimates that by 2030, investment of around R1,2tn is needed – R990bn for new generation capacity totalling 67GW; R130bn to expand and strengthen the transmission network; and about R56bn to strengthen the distribution network for embedded generation.

Due to come on stream before 2024 are about 20,000MW from various sources including recovery and load loss reductions at existing plants, municipal procurements and scheduled renewable projects including 2,000MW from IPPs using Eskom leased land. The problem is that the figure also includes a total of 7,800MW from bid windows 5 and 6 of the Renewable Energy Independent Power Producers Procurement Programme, but these are unlikely to come on stream in time as bidders from BW5 are struggling to reach financial close due to higher input costs while 1,000MW have already been shaved from BW6’s planned allocation of 5,200MW.

BLSA calls on the Department of Mineral Resources and Energy to urgently address this shortfall to do all we can as soon as we can to prevent loadshedding from extending well beyond 2024.

*Busisiwe Mavuso (@BusiMavuso2) is the CEO of BLSA. This article first appeared in News24 Business.

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