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Eskom crisis could result in elimination of regulatory hurdles
December 10, 2019, 5:15 pm

Eskom instituted an unprecedented Stage 6 loadshedding schedule on Monday

Eskom’s Arnot power station [Courtesy: Eskom]

State-owned electricity utility Eskom had to institute a Stage 6 loadshedding schedule, which meant that they were short 6 000 Megwatts (MW) on December 9 due to a variety of breakdowns at its plants.

These included the loss of power supply to the incline conveyors feeding coal to the silos at Medupi power station, which caused coal-feeding issues resulting in a loss of a number of units, while at Kriel, there was flooding at both the Kriel mine and the power station leading to no coal deliveries via the conveyor belt.

Camden power station experienced abnormally high rain at some 250 millimetres (mm) over the past week leading to flooding, which impacted the boiler and turbine hall and other critical infrastructure that is connected to coal supply and handling inside the station.

In response to this crisis, a variety of players have suggested solutions, as in their view, this crisis could be mitigated if regulatory hurdles were eliminated.

The South African Wind Energy Association (SAWEA) said on Tuesday that current operating wind farms could add 500 MW immediately to the national grid. It is not allowed to do so currently due to the regulatory Maximum Export Capacity (MEC) on all operating wind farms, which governs how much energy is permitted to be exported by wind farm power generators.

Currently, wind farms can only export the pre-agreed maximum capacity into the grid and are forced to curtail any additional capacity. If the restrictions were lifted, government could buy that additional energy at a tariff it was prepared to pay. In any case, this is surplus energy that can be bought at marginal cost, as low as R0.40c per kilowatthour (KWh).

“The operational wind energy plants have excess capacity of about 500MW available immediately. These can also be short term contracts that can be signed in this interim capacity constraint period and it doesn’t have to be viewed as long term commitments,” said Ntombifuthi Ntuli, CEO of SAWEA.

In addition to permitting additional wind power into the grid, SAWEA suggested that the government allow the industry to fast-track wind farms that are currently under construction, meaning that they can provide power that is being produced to Eskom, before their agreed commercial operations date.

This ‘early generation’ electricity can be sold to Eskom at a rate approximately 40% cheaper than the agreed tariff, ensuring that the much-needed electricity is fed into the grid much earlier than anticipated and achieve short term savings for government/Eskom.

SAWEA also suggested that the government open the market for private Power Purchase Agreements (PPAs). The wind sector can provide energy at a rate 25% lower than Eskom mega-flex tariffs to intensive energy users. The wind industry can supply electricity through signing private PPAs, which should address a lot of the short-term capacity challenges and ultimately avoid load shedding, but this would need to be clearly spelt out in the ministerial determination for new generation capacity.

“Our current state of power shortage is threatening multiple sectors and especially small businesses that employ over half of the country’s labour force.  Small businesses struggle to recover from extended periods of load shedding, especially stage 4, which allows for up to 4 000 MW of the national load to be shed,” added Ntuli.

The South African Photovoltaic Industry Association (SAPVIA) said that up to 2 000 MW of small-scale capacity could be added to the energy mix over the next 12 months.

However, while the Integrated Resource Plan (IRP) 2019 had identified small-scale generation as the means to bridging the electricity supply gap, SAPVIA stated that it believes the bureaucracy associated with the licensing and registration of embedded generation facilities would hamper the rapid absorption of this much-needed supply source into the generation mix.

SAPVIA also called for municipal bylaws to be amended to better clarify the requirements for grid connection, to reduce the timelines and uncertainties associated with grid access.

The association explained that, while facilities generating less than 1 MW only require municipal or Eskom technical sign-off to supply their owners or feed into the grid, facilities above 1 MW still need to undergo the strenuous National Energy Regulator of South Africa (Nersa) licensing process, which can take between nine months and a year to run its course, before the facilities can be commissioned.

SAPVIA believes the cap of 1 MW is “arbitrary” and said it “has no technical or commercial basis”.


According to the association, in most developed power markets, self-generators can develop their own embedded facilities and these can connect to the grid if they technically meet the relevant grid codes, without any cap on the size of the facilities. Consequently, SAPVIA proposed that 10 MW be set as an initial cap on projects, as long as the use of system approvals are granted.

“We believe this cap can be reviewed in time,” the association said.

It urged the Department of Mineral Resources and Energy to “swiftly implement” any of the legislative or regulatory changes that would be required to allow generators of less than 10 MW to generate without undergoing the Nersa licensing process.

Stanford Mazhindu from trade union movement UASA said that Public Enterprise Minister Pravin Gordhan’s valiant efforts to bring Eskom under control about a year ago have failed miserably and South Africa is in deep trouble.

“We know there is no magic formula, and we don’t want a magic formula. What we want is a power utility that is responsibly managed, enabling South Africans to live quality lives and get on with their business enterprises. As a nation, and more specifically UASA as a union that looks out for its members, we had hoped that the Eskom crisis would be solved by now, but instead we have to live with Stage 6 load shedding. Clearly the power utility has no idea how to resolve its current issues,” he said.

“What happened to the technical review task team, assisted by independent engineers, that was appointed months ago to examine plant unavailability due to scheduled maintenance; plant unavailability due to unplanned outages and unscheduled maintenance; operator errors resulting in power plants tripping and shutting down; and technical and operator-associated inefficiencies resulting in lower than optimum electricity output from the power station units? Are they still active?” he asked.

The official opposition, the Democratic Alliance (DA), said the government could easily solve the electricity crisis by removing regulatory hurdles.

“The most efficient immediate step is using Section 34 of the Electricity Regulation Act (4 of 2006) which allows the Minister of Mineral Resources and Energy to issue a determination that allows qualifying municipalities to bypass Eskom and procure electricity directly from Independent Power Producers (IPPs),” DA leader John Steenhuisen said.

He explained that contrary to the President’s views, this can be done overnight and would go a long way to resolving energy shortages and pressure on the grid.

He also believes that introducing IPPs into the mix is now a necessity.

“In fact, right now Minister Mantashe is sitting with at least seventeen section 34 applications for private generation and purchase of electricity on his desk waiting to be signed – from municipalities, mines and corporations. The President must intervene and ensure these are acceded to within the next 48 hours,” Steenhisen said.

Helmo Preuss in Makhanda, South Africa for The BRICS Post