Keeping SA’s lights on


I’m sitting in the semi-darkness writing this. Another round of Stage 4 load shedding has been initiated, which is so unpleasant and so damaging that it forces one to contemplate a future that includes regular stages 5 to 6. A future that would be so economically and socially cataclysmic, that it doesn’t bear thinking about. Except that we must.

In 2020 Eskom CEO André de Ruyter committed to turning the power utility around, and promised that if we bore the pain of ‘scheduled’ load shedding while Eskom engineers brought the maintenance schedule up to speed, the grid would stabilise. But the reverse is happening and Eskom’s target of a 70% energy-availability factor – the number of plants in good working order and able to distribute electricity – looks unattainable as it hovers at 55%. Its fleet of mostly coal-fired power stations are too old and tired to bear the pressure.

We cannot maintain our way out of this crisis; we need to bolster the system with new generating capacity – which is the mandate of the Department of Mineral Resources and Energy, not Eskom. Power generation is an intensely political domain. But there is some recent research that lends support to De Ruyter’s frantic plea to accelerate the roll-out of renewable energy. A report by Meridian Economics found the power cuts of 2021 could have been avoided if the grid had an extra 5 GW of capacity. This is a significant amount of power, equating to the two bid windows in the Renewable Energy Independent Power Producer Procurement (REIPPP) programme that stalled between 2016 and 2018.

Beyond load shedding and its impact, the report adds that had that capacity been available in 2021, Eskom could have saved R2.5 billion just in diesel, which could have been used to pay down debt, invest in transmission infrastructure, or even to meet unions’ salary demands. The report’s suggestions include lifting licensing exemption for generation plants from 100 MW to 1 GW; escalating wind- and solar-energy projects; altering tariffs to incentivise owners of distributed generation to push excess energy into the grid; and removing stumbling blocks in government procurement from independent producers.

Thus, it would be possible to install around 5 GW a year of renewable-energy capacity out to 2050, ensuring that half of SA’s generation needs should be met by renewables by 2030.

This isn’t an ideological renewables-versus-the-rest punt; research is pointing the way. Meridian says that if SA continues to install large-scale power generation from gas to replace its ageing coal-fired power stations, electricity users would pay a 40% premium, compared to using more wind and solar power, supplemented by gas only for peaking demand. A Stellenbosch University (SU) paper adds that the cost of building new wind and solar capacity in SA is already 40% cheaper than new coal, the next cheapest option.

Supporting an aggressive roll-out of renewables will require leadership and political will. So while it’s good news that the energy minister has signed the first three power-purchase deals – out of 11 – under his new risk-mitigation programme, more needs to be done, urgently.

The benefits are obvious. The three projects have attracted R16 billion in investment and will create about 5 000 job opportunities during construction and operation. And the REIPPP’s Bid Window 5 preferred bidders, announced in October, will see the private sector inject about R50 billion into the economy as it sets about building and operating solar or wind farms over the next 20 years. At the same time, more than 13 000 job opportunities are promised over the duration of the projects. This is just the start.

SA needs about R4 trillion in investments over three decades if it is to ensure a just energy transition along with a reliable supply. Quite how this will be raised is unknown. At COP26, $8.5 billion was pledged to aid SA’s just energy transition, a fraction of what is required. But as SU says, ‘the $8.5 billion commitment can create a blueprint for what “good” looks like: a transparent deal that provides the type of capital needed to tackle the key transition challenges of decommissioning coal while supporting communities and spurring green growth’.

If we sit on our hands, or worse, actively resist renewables, load shedding is, by 2026, likely to be 10 times worse than in 2021, says Meridian. And that is too ghastly to contemplate.

By Sasha Planting