The end of Loadshedding could be near as South Africa’s cities start planning to move away from Eskom and towards more renewable energy sources!
Johannesburg, South Africa (28 October 2020) – It’s lights out for Eskom… but a new dawn for renewable energy in South Africa!
South Africa’s biggest cities are preparing to source their own power after the energy ministry this month approved letting them wean themselves off the state utility that’s subjected cities to outages for the past 13 years.
Bloomberg News has just reported that both Johannesburg and Cape Town, which have a combined population of about 10 million people, plan to diversify away from the electricity produced mainly from coal by Eskom to more sustainable sources such as solar and power generated from landfill gas.
This is really good news for South Africa, our electricity and our environment!
Eskom has been South Africa’s main public electricity utility since 1923. The utility is the largest producer of electricity in Africa, and was among the top utilities in the world in terms of generation capacity and sales, but has since slipped in both categories.
It is the largest of South Africa’s state-owned enterprises. Eskom operates a number of notable power stations, including Medupi Power Station in Lephalale, Kusile Power Station in Witbank, Kendal Power Station, and Koeberg nuclear power station in the Western Cape Province, the only nuclear power plant in Africa. The company is divided into Generation, Transmission and Distribution divisions and together Eskom generates approximately 95% of the electricity used in South Africa, amounting to ~45% used in Africa, and emits 42% of South Africa’s total greenhouse gas emissions.
In 2019, it was announced that Eskom was to be split up into three distinct nationally owned entities due to huge debts and poor reliability of supply.
South Africa’s Power Crisis
In January 2008 Eskom controversially introduced “load shedding”, planned rolling blackouts based on a rotating schedule, in periods where short supply threatens the integrity of the grid. Demand-side management has focused on encouraging consumers to conserve power during peak periods in order to reduce the incidence of load shedding. Following the national power shortage in 2007 Eskom embarked on an aggressive electricity production expansion program during the administration of President Jacob Zuma. The Zuma administration decided to focus expansion efforts on building additional large scale six-pack coal-fired power plants.
In 2016 Eskom stated it intended to pursue a nuclear solution to the country’s energy shortage. According to projections from late 2016, the use of nuclear power would provide over 1000GW of power by 2050. In preparation, the company has launched a training program for 100 technicians, engineers and artisans that will certify them as nuclear operators. In January 2018 Eskom’s acting Chief Financial Officer stated that the company could not afford a new build, following a 34% drop in interim profits due to declining sales and increasing financing costs. The government stated it would proceed with the plan but more slowly.
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In 2017 Eskom was the focus of a major corruption scandal involving the Gupta family and the administration of then-President Jacob Zuma.
The National Energy Regulator of South Africa denied an application by Eskom to increase electricity tariffs by a future 19.9% for the financial year 2018/19. The regulator instead granted a 5.2% increase and gave a list of reasons for the refusal to grant higher tariffs that the South African newspaper Business Day stated painted “a picture of inefficiency, inaccurate forecasting and cost overruns” at the power utility. Part of the refusal was the finding that Eskom had 6,000 more employees than needed, costing the company R3.8 billion annually.
In February 2019, shortly after the announcement by the government that the company would be broken up, Eskom initiated another round of emergency load shedding. Eskom stated that the 2019 load shedding was initiated due to breakdowns at power stations as well as the depletion of water and diesel resources. Other reasons cited included legacy issues from state capture corruption, coal availability, and that new power plants such as Medupi and Kusile were not yet operational. Corruption during the Zuma administration has been noted as a major factor in the cost overruns and long delays in completing Medupi and Kusile power plants that has had a knock-on effect leading to the 2019 power shortages. The power shortage and related troubles at Eskom were blamed as a significant contributing factor to a 3.2% decline in GDP growth in the first quarter of 2019, prompting fears of a recession in 2019.
Between March and July 2020 the power supply was stable due to reduced demand during the COVID-19 lockdown, on 12 July a new round of level 2 load shedding began due to the breakdown of generating units.
The future for South Africa
Both Johannesburg and Cape Town are considering sourcing electricity from various renewable sources including solar power plants and landfills that can use gas from rotten garbage to produce electricity.
“The City of Cape Town is looking at 300 megawatts of renewable” energy, Kadri Nassiep, Cape Town’s executive director for energy and climate change, said by email.
“If all clarity is obtained and plans forge ahead, we could start seeing greater diversification of our energy resources as a city in about three to five years time.”
In addition to improving the security of supply, the move will allow the cities to boost their fight against climate change by using power that doesn’t result in the emission of greenhouse gases. Still, it will slash revenue for Eskom, which is struggling to service a $30 billion debt bill.
“Internationally many cities are at the forefront of dealing with climate-change disasters and so have adopted proactive climate-change responses,” Lauren Hermanus, director of Adapt, a South African company that provides consultancy services on sustainable energy, said in an interview.
“We are also all aware of Eskom’s related operational, governance and fiscal challenges, most clear in our bouts of load shedding,” she said, using a local term for power outages.
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