Energy Minister Mantashe has the power to end load shedding with new generation capacity – experts
Darkness with patches of light is what South Africa literally looks like at the moment. Experts spell out what needs to be done to power up our country. And all roads lead to Gwede Mantashe, the minister of mineral resources and energy.
They have overseen the entirety of the power crisis from the early warnings at the turn of the century all the way to Stage 6 in 2022. And despite this, executive authorities in the ANC-led government are either dead set on making the same mistake or unable to learn from the past.
An expanding body of people and organisations, across the spectrum from civil society to academia, from Eskom itself to energy experts, have all come out and said that the quickest solution to end SA’s power crisis would be to rapidly add additional generation capacity. Even then, it would be years before the crisis was fully resolved.
Section 34 of the Electricity Regulation Act provides for the minister of mineral resources and energy, Gwede Mantashe, to issue determinations for new electricity-generating capacity to be built. The power to end load shedding is literally in Mantashe’s hands and the faster he acts, the sooner the problem can be solved.
But if you ask Mantashe, as journalists from News24 did after a Cabinet meeting at the end of June, he might say that “it’s unfair to place blame on myself or the government. What should I do with Eskom as mineral resources and energy minister? The power utility is a matter [that falls] under public enterprises.”
Richard Mantu, media liaison officer at the Department of Public Enterprises (DPE), explained to DM168 that the DPE was taking the lead in bringing forward structural reforms at Eskom but that it could not procure power.
Mantashe went on to explain that even the rapid addition of more capacity wouldn’t resolve the issue instantly, saying to the journalists that “instant energy will only come from the units of Eskom working efficiently”.
What Mantashe fails to acknowledge is that working efficiently is an anathema to an Eskom that was the site of major corruption and incapacitation; an Eskom that depends on a coal-powered fleet of power plants with an average age of 41 years that have been running at high utilisation factors (in the red zone) with minimal reliability maintenance and upgrades.
Eskom spokesperson Sikonathi Mantshantsha explained that, for the utility’s units to work “efficiently”, they needed “additional capacity, which will both provide direct capacity to reduce load shedding but also provide Eskom with the capacity or ‘space’ in which to perform the deep, reliability maintenance that is essential for improving the reliability and predictability of the generation fleet”.
Mantashe would do well to remember that on 30 October 2020 he signed a performance agreement with President Cyril Ramaphosa that confirms it is his responsibility to “create maintenance space for Eskom by augmenting supply with 2,000MW of emergency power, additional power from [independent power producers (IPPs)] and generation for own use in line with [the Integrated Resource Plan (IRP)] 2019. Implement the IRP 2019.”
But Mantashe and the Department of Mineral Resources and Energy (DMRE) are not solely responsible for this sorry state of affairs. Asked about the composition of Eskom’s board and the lack of engineering and energy sector experience, Mantu threw cold water on any suggestion that this played a significant role in the company’s current woes.
Under DPE Minister Pravin Gordhan’s stewardship, Eskom has sought to dismantle its outdated vertically integrated monopoly structure and replace it with three separate companies, each with its own liabilities and assets under the Eskom umbrella, in the hope of enabling greater access to finance and greater independence. Despite this, Gordhan has not appointed a board of directors to the newly formed transmission company under Eskom’s umbrella despite the utility putting forth a list of nominees in February.
The Treasury has also belatedly acceded to the needs of Eskom. Shortly after joining Eskom as CEO, André de Ruyter proposed that original equipment manufacturers be brought in on maintenance contracts. The Treasury eventually acceded to this request in April but the time differential can be counted in hours of load shedding not prevented. Moreover, Eskom is unable to support its own capacity needs because of its gargantuan debt levels.
It is partly this ongoing finger-pointing and quibbling about responsibilities and culpabilities that has enabled South Africa’s energy crisis to intensify. It wouldn’t be the first time members of the executive branch have not heeded Eskom’s calls. Successive ANC-led governments have failed to prevent, arrest and end load shedding.
“When Eskom said to the government, ‘We think we must invest more in terms of electricity generation’, we said: ‘No, all you will be doing is to build excess capacity.’ We said: ‘Not now, later.’ We were wrong. Eskom was right.”
So said former president Thabo Mbeki, apologising to the nation in 2008 after South Africans had their first taste of what was to become the ongoing, accursed national bane that is load shedding. The problem, however, was accurately predicted years in advance.
Dating as far back as at least 1999, South Africa’s net reserve margin – the difference between capacity and demand for electricity – had been steadily declining as a result of increasing demand and a lack of additional capacity being commissioned.
A year before, in 1998, an Energy White Paper had predicted that, “for an assumed demand growth of 4.2%, Eskom’s present generation capacity surplus will be fully utilised by about 2007”. Eskom, accordingly, approached the government for increased capital expenditure for generation. That it was denied this is part of the reason the country is in the situation it is in today.
“The two primary reasons for load shedding are the unreliability and unpredictability of Eskom’s generation fleet … and a lack of generation capacity in the country,” said Mantshantsha. Eskom had an energy shortfall of 4,000MW to 6,000MW of new generation to the national grid; an amount that would significantly reduce load shedding, Mantshantsha said. This does not tell the whole story, however.
The DPE’s Mantu pointed to Gordhan’s recent media briefing, saying that this long-festering issue was exacerbated over the past two weeks by unlawful strikes by Eskom workers that saw yet more generation capacity rendered unavailable, leading to Stage 6 load shedding.
The country’s energy shortfall, according to Chris Yelland, energy analyst and MD of EE Business Intelligence, also stems from Medupi and Kusile power stations that were ordered in 2008 to meet the said depleting capacity. The power plants were meant to be completed in 2015 and deliver 9,600MW.
“It’s now seven years later and Medupi has essentially been completed but it’s performing very poorly and one of its units is not performing at all because it blew up … that unit is running on about half of what it should.
“Kusile, three units are in commercial service … and performing very poorly. So those units, even though it’s eight years later, are only producing at a quarter of what they should be,” he said.
However, the shortfalls of the plants and in capacity more generally are not the sole contributor to the energy crisis. Eskom’s Mantshantsha said “corruption has played a big role in the position in which Eskom finds itself today. Eskom has laid numerous criminal charges with the South African Police Service, disciplined and dismissed from its workforce employees found guilty of irregularities, and in some instances commenced legal proceedings to recover from third parties funds irregularly paid out.”
Yelland explained that in a tenure marred by corruption engrossed in dodgy dealings, former Eskom CEOs Brian Molefe and Matshela Koko had stopped the Renewable Energy Independent Power Producer Programme (REIPPP) for five years. The programme aims to integrate renewable energy into the grid, garnering investment from the private sector to develop additional capacity. Thus far, 6,000MW of generation capacity has been allocated through its bidding windows, which has not yet been integrated into the Eskom grid. He added that the five-year period could have generated an additional 5,000MW of renewable energy and prevented 95% of load shedding last year alone.
National Planning Commission
The National Planning Commission (NPC), chaired by Minister in the Presidency Mondli Gungubele, on 6 July proposed a number of measures to end the crisis that has left the nation reeling.
The commission proposed that the 100MW ceiling be removed as the Eskom grid could regulate the increased energy market; that National Energy Regulator of South Africa (Nersa) regulations on registration and implementation of renewable projects be scrapped and replaced with an online registration procedure; the fast-tracking of environmental assessments; and a temporary exemption for construction and commissioning of new projects that will come online in the next three years.
Questions sent to the DMRE and Mantashe were acknowledged but not responded to at the time of writing.
Happy Khambule, energy manager for Business Unity South Africa, told DM168 that some of the red tape that stood in the way of tackling the energy crisis included removing the cap on the 100MW self-embedded generation. Khambule also said addressing the legislative barriers around environmental impact assessments and approvals around access to land in order to build transmission lines for the much-needed renewable plants were also key to the development of renewables.
“There’s a lot of land from the previous bid windows that is ready to provide power to the grid but they are not doing so because there’s no transmission … there wasn’t a discussion between Eskom, Nersa and the plant designers to say, well, ‘you should be closer to the grid’. People just built and they thought the grid was going to come and it never did. So there’s a coordination problem there,” Khambule said.
He added that there was money coming from the private sector to build transmission lines towards the direction of the Eskom grid but some of them were too far, thus too costly, and that the authorities needed to pull their weight as well.
Presidential Climate Commission
Presidential Climate Commission executive director Dr Crispian Olver told DM168 that the major constraint to scaling up renewable capacity was that the grid was designed for coal energy and that the necessary reconfiguration for a renewables grid required “a major level of investment”.
COP26 saw South Africa benefit from a partnership that invested R8.5-billion into its just energy transition strategy. Olver said a large amount of the investment needed to go into upgrading the country’s grid.
“We need to put renewables on to the grid as fast as humanly possible. We estimate that we need about three to four gigawatts per annum for the next 30 years, which is equivalent to the entire REIPPP. There’s got to be a massive scaling up in terms of the pace at which renewables are coming on to the grid … we would be supportive of a mix of models, not just IPPs,” Olver added.
Mantashe has recently stated that his department will be revisiting and will likely update the IRP soon. The plan sets out the timelines for decommissioning coal-fired power stations and adding 44,000MW of new capacity, including 18,000MW of wind energy and 8,000MW of solar. Eskom plans to decommission 8,000MW to 12,000MW of coal-fired power generation over the next decade, which will – if not met with commensurate increased generation capacity – enlarge the supply shortfall.
Jan Oberholzer, Eskom’s chief operating officer, has said that the country needs to add 50,000MW of additional generation capacity to the grid over the next 13 years to cover the energy supply gap and replace retiring coal stations.
The ageing coal stations have also contributed a great deal to the current crisis. Yelland explained to DM168 that the ageing infrastructure was another major problem; as plants age, their availability decreases. And though maintenance might seem like the solution, that means switching off the plants for three to four months at a time, resulting in higher stages of load shedding than the country is currently facing.
ANC National Executive Committee
The ANC’s statement on the outcomes of its National Executive Committee meeting urged the government and Eskom to increase maintenance and improve the availability of existing supply; facilitate private investment in new-generation capacity; speed up the repurposing of power stations with alternative energy sources; accelerate the procurement of battery storage; empower municipalities to procure additional energy sources; and encourage businesses and households to invest in renewable energies.
The delay in ministerial guidelines on how municipalities can generate their own electricity was a barrier that needed to be reviewed, Nicole Loser, attorney and programme head of pollution and climate change at the Centre for Environmental Rights, told DM168. In 2020, Ramaphosa announced in his State of the Nation Address that municipalities in good standing would be able to generate energy independently, but the finer details on how this would be achieved have been sluggish at best.
The City of Cape Town has been spearheading municipal energy independence by shielding its residents from Stage 6 load shedding, keeping to Stage 4 with the Steenbras hydroelectric scheme.
Beverley van Reenen, the City’s mayoral committee member for energy, told DM168 that the City was on its way towards ending load shedding over time with small-scale embedded generation, wheeling (i.e. the transportation of energy from privately generated power to the national grid), IPPs and building its own solar plant in Atlantis.
Stellenbosch is currently looking at producing about 10% of its energy independently. It has done so by installing solar panels on its municipal buildings and also has residents following suit.
“The first 780kW of generation has been completed on a number of municipal building rooftops. This, together with public installation, brings us to a total of 4,000kW of installations. We need to go to 7,500kW to reach 10%. Note that all these units are also assisting Eskom in not having to generate this load and load shedding can therefore be delayed,” Deon Louw, acting director of infrastructure services of the Stellenbosch Municipality, told DM168.
Municipalities taking matters into their own hands are bolstered by the findings of a study conducted by the University of Oxford’s Environment Change Institute and published in April, which identified South Africa and Egypt as the most favourable African countries for renewable energy development and investments.
Dr Doorga Jay Rovisham Singh, now a lecturer at Université des Mascareignes and lead author of the study, answered some of DM168’s questions.
“SA has one of the best solar and wind potentials of the entire African continent. So, besides the environmental context, there is huge economic viability in exploiting renewable energy in hotspots. So much that they are even cheaper than constructing new coal power plants,” he said.
“Also, there is a good supply chain and institutional framework to support renewable energy projects, as several projects have been recently implemented…”
In reference to load shedding, Singh said “the outages are indeed an issue in SA, but this is mainly due to ageing coal power plants. So the country needs to diversify its energy mix to accommodate more renewable energy, which would guarantee stability.” DM168
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R25.