ENERGY CRISIS
Suggestions Box: How to start getting South Africa powered up and running again
South Africa, already one of the world’s most unequal countries, can ill afford the cost of persistent scheduled power outages that scupper small businesses, have an impact even on large corporates, trouble learners and increasingly pose a health risk as water and sewage treatment facilities collapse.
The necessary steps to fix South Africa’s energy crisis — not just Eskom — are not rocket science, but require multidimensional action that is nuanced and responsive. That’s especially important when new money is not available, and whatever is spent must be cut from somewhere, given the domestic economic doldrums.
Read more in Daily Maverick: “Eskom reality check: it will NOT get better any time soon, regardless of SA’s WEF sales pitch/PR”
Here are some suggestions.
An SMME grant for alternative energy
It’s to keep the doors open and jobs going — if creating jobs, and reducing poverty and inequality, as the National Development Plan requires by 2030, are really central to South Africa’s future, rather than just politicians’ talk.
The Covid-19 small business support grant put the basics in place; at the time, the official reason for requesting all sorts of documents was to establish a database within the government. And making a similar amount available, say R750-million, could have a real impact.
Such a grant didn’t seem to be on the table. At least not before the Sowetan carried the names of scores of small businesses brought to their knees by the rolling power outages, under the heading: “Mr President, cancelling your Davos trip is one thing. Dealing with the crisis is another. Here’s a reminder of some small businesses crippled by every failed promise to fix Eskom”.
That day, Small Business Development Minister Stella Ndabeni-Abrahams issued a statement on possible energy emergency relief, and pledged that details of the package, including criteria and application methods, would be announced “soon”.
Politicians should give up their taxpayer-funded generators
Move those generators to clinics, hospitals and schools and, yes, also courts, so services can be provided to ordinary people.
It won’t raise energy availability, but it will be an act of social solidarity for everyone from the President, ministers and their deputies, premiers, MECs and others to relinquish the elite benefits that shield them from the up to 12 hours a day without power.
Perhaps all should also start paying for all their rates and services, not just from R5,001 upwards as the ministerial handbook stipulates.
Cut the red tape — and fast
Much can be done in regulation — the domain of Cabinet ministers. As with the removal of licence requirements for private embedded generation after the initial June 2021 raising of the licensing threshold to 100MW. However, further regulatory changes are needed to facilitate wheeling, or how independent producers feed back into the national grid.
Those frameworks exist and are a “scaleable solution”, according to Eskom. But, right now, wheeling is bureaucratic spaghetti, involving paying for a cost estimate letter, a budget quote and then connection fees, security deposits, and getting everyone, including municipalities, to sign off.
Changes to regulations could bring about a more user-friendly and effective system — and at the same time tie in the incentives for corporate and individual rooftop solar systems that the National Energy Crisis Committee, or Necom, is considering, according to a briefing document to this week’s consultations.
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Without wheeling to get those company, shopping mall and private home rooftop solar systems into the national grid, South Africa’s deep inequality between haves and have-nots will worsen.
A cautionary note to Parliament on proposed emergency legislation “to allow energy projects to proceed more quickly and enable coordinated and decisive action”, as fast-tracked lawmaking, often amid political pressure, runs the risk of just producing bad law.
Coordination is the terrain of departments, with ministries the political supervisors. If the ministers stall on implementation, the issue is not legislation, but executive action.
Government, pay your own electricity accounts
Municipalities owed Eskom R44-billion by April 2022, up from R35.3-billion just a year before. And it continues going up.
Government departments are among those owing, as are state-owned enterprises. Denel owes Tshwane some R16.5-million for electricity for at least 120 days and Ekurhuleni R2.25-million, according to a parliamentary reply to DA parliamentarian Tim Brauteseth.
It might not make a huge dent in Eskom’s R400-billion debt — the R31.7-billion government bailout doesn’t even cover the R32.5-billion interest payment, according to the 2021/22 financial year annual report — but it’ll help.
Move Independent Power Producers Office from Mineral Resources and Energy
Much has been said and written about the dysfunction of that department. Independent power projects have been delayed and not enough have been signed off to meet the various bid window stipulations, among other complications that trickled into the public domain. National Treasury, which is supposed to partner with the department, seems to be just MIA.
Stop reinventing the wheel
Even if the government does not want to take up the significant research on energy, electricity and Eskom available in civil society — whether because of ideological leanings, or just plain arrogance — take advantage of statutory bodies like Statistics South Africa and the Council for Scientific and Industrial Research (CSIR) which have accumulated vast knowledge.
Insisting on doing departmental research is yet another tactic to delay actually doing. So is yet another meeting with (handpicked) experts or consultants.
And actually, also use Eskom’s facts and figures that are publicly available. The power utility’s alerts on rolling power outage stages are clear about what capacity was lost where, when and why.
Ditch the ideology
That applies whether you are a coal fundamentalist, private sector take-over conspiratorialist, tata ma’chancer or member of WMC.
No, 22,000MW are not idling somewhere unseen and unused — that capacity is broken, it’s gone. It falls under the “unplanned breakages” column in which Eskom is quite candid in explaining why, even if on paper it may have 46,000MW, it actually can only deliver about 25,000MW.
Those updates — they also show the buffer that renewable energy provides against rotational power cuts — are publicly available, so no secret.
All the above is a start. Much more must happen, including a good dose of honesty rather than pretty words, changeable timeframes and blame-shifting — even if elections loom in 2024. DM
Become an Insider
The people who can should be encouraged to invest in self generating. Some suggestions.
Zero rate VAT for solar install components (panels, battery, inverter etc). Scrap import tariffs if there are any. 100% Tax deductions for individuals on the above and Government underwritten or supported funding through banks to make financing systems cheaper.
This would not only ensure quicker deployment of capacity but also create jobs.
I cannot see what’s it loose.
Yes, tax incentives for business and homes to install solar is an important initiative. Also, don’t move Eskom to fall under the Department of Mineral Resources and Energy, remove Minister Mantashe, for as long as he remains Minister, things are just going to continue to implode. That is almost certainly not going to happen given the President’s dependence on Minister Mantashe for his position and party dynamics, but it is critical if there is any hope to stop the crisis deepening even further. Also, somehow appointing a very strong and competent CEO of Eskom is essential, but again, it is extremely unlikely that a person with those qualities will apply or, even if they do apply, will be appointed, given how Mr De Ruyter was hounded out of the position.
All very logical and laudable suggestions but, after at least 15 years of watching the current system collapse, it is hardly conceivable that a sudden vision is going to transform the situation.
I have reached the conclusion that the current ruling party and possibly other factions actually want the power supply and potentially the economy and social structure to collapse so that a Mao like agrarian revolution can take place.
Hear, hear! And allow existing IPPs to export their contractually surplus capacity into the grid – that can be implemented with a few strokes of Ministerial pens (Gwede and Pravin).
There are thousands of homes and businesses with installed approved solar systems, but very few of them provide surplus power back into the grid even though almost all inverters are designed to allow feedback into the grid. The reason: fearsome gratuitious paperwork and bureacracy at the cost of the owner scare off many. Even worse, the owner must PAY monthly for the privilege to feed excess power into the grid. In summer our system is fully charged by 11h00 and about 15kW goes to waste until late afternoon.
Suggestion: as a state of disaster temporary measure allow owners of approved systems connected to the grid to feed surplus power into the grid. Many will be willing to donate such power; in some countries remuneration is as simple as the meter running backwards. Megawatts of power can be fed back into the grid as soon as municipalities and Eskom allow it.
I’m one of them but I wouldn’t anyway; too much risk of spikes and brownouts from the grid.
Agree totally. If there is load shedding all those that are able should be entitled to feed into the grid/run the meter backwards. The only caveat is that their inverter should comply with something like California Rule 21 so they do not cause grid instability. Virtually all modern inverters comply in any event.
I am one of those. In Nelson Mandela Bay. Grid-tied , bi-directional meter. These do comply – when the grid goes down, so does your generation (you don’t want power being pumped into the grid while it is down, in case people are working on the lines). I pay for the difference between what I generate and what I consume. Any excess is a loss to me. So I generate less than what my system can. Government tax incentives (like 12b for households) and feed-in tariffs for households would allow me to add to the grid
May I suggest a tax credit for individuals to offset the costs of a PV / battery / inverter installation? It could be spread over a few years. The only paperwork needed would be a CoC. No changes to regulations, no network upgrades, no grid connection issues, no Capex, but unfortunately a loss of paying customers in the longer term.
There are precedents – previously solar water heaters were subsidised as part of Eskom’s demand reduction program. In the USA some areas provided tax credits for PV installations.
No mention of the use of ethanol for power generating turbines. It would also provide work for tens of thousands of workers in the sugar industry.
The sugar industry has had the ability and wanted to feed power made from waste bagasse into the grid for decades. But Eskom would not allow it!
Any sensible government would have dropped the VAT and excise duty on solar and renewable components years ago.
I think you may have forgotten Suggestion 1 – fix the police – from the top, not from the bottom – by recruiting more constables, for example, who might just become subsumed into a broken system. Fixing the police will fix a whole lot of problems, not just Eskom/power problems.
Nothing will ever happen until the Looting, thieving, lying scum that is the ANC in all its facets is removed entirely from power. Everything else is just wishful thinking.
The author would do well to investigate just which Comrade is making money off the sale of diesel to Eskom and why said person/s would have no interest in lessening loadshedding
One of the most interesting ideas I’ve heard is to privatise electricity generation (and open it up to all comers) while keeping distribution nationalised. The state then buys electricity on a market system, and assumes the responsibility for providing it to the people. This allows for competition on pricing while decoupling the generating entities from the debt of defaulting municipalities. The Competition Commission could provide regulations to prevent any one power producer from becoming a monopoly. Passing emissions regulations would also become easier as the state isn’t the one footing the bill for it.
The ideological leanings of the ANC, EFF and others would be a significant hurdle to overcome for this to be implemented.
Here is a list of suggestions I have been working on:
– Install solar geysers in all homes without one (offer rebates as they used to)
– Install solar panels/inverters in all homes that can afford to (offer rebates as they used to and put in systems to help maintain grid stability)
– Make use of existing electricity connections wherever possible for renewables (residences etc) to avoid lack of grid connections issue
– Set up a team to offer energy optimisations for private users and later homes (you’d be surprised how many people burn through electricity and don’t even know it)
– Implement BEE/VAT exemptions on energy products
– New legislation that docks the relevant Eskom employees’ pay based on how many hours a day we have loadshedding (discourage them joining criminal orgs that gain from sabotage)
– New legislation that docks the Energy minister’s pay based on how many hours a day we have loadshedding (discourage them from not giving a f&^%
– Have Eskom placed under business rescue, same as they did with SAA (will allow trimming of fat at Eskom as with SAA)
– TAX rebates
– Subsidies for installing own power
– Cash rewards for lowering usage as per higher end Eskom clients (what the UK is doing)
You need to be careful not to only put loadshedding as a Key Metric. This needs to be counterbalanced with other metrics such as Planned Maintenance Hit Rate, otherwise you get the situation we had before where machinery is run into the ground.
We are all forgetting that we have one of the most plentiful power source, we are just not using it. The amount of land and infrastructure needed to run a single power plant is more than enough space to provide space for job opportunities ie vegetable gardening under solar panels and also allowing the opportunity for additional employment and accomodation on site.
Otherwise has anyone actually thought of placing dynamos on stationary machines to let it assist in generating its own power? How many people would be willing to be employed to be the power source for a dynamo?
What about turbines in water distribution pipes or in the natural flow of water ?
Think out of the box because trying old solutions is more wasteful. Eskom should be mandated to accept sustainable power distributed from anyone ie sugar cane.
Provide incentives to those who go off the grid to feed back as apparently it costs a resident considerably more to buy from Eskom than sell to Eskom. Make it a flat charge both ways.
To deal with immediate crisis:
1. Give Eskom money to run their OCGT. Businesses are anyway using that diesel to run their own generators. Business pays R21/liter running smaller less efficient generators. Run the 2GW Eskom with that diesel at R7/liter and you wipe out 2 stages of loadshedding.
2. Put all non-payers on permanent stage 8. That should be good for reducing the payers at least another stage. I realize the political will is not there to cut non-payers off but it is nonsense that payers are on stage 5 and non payers are also on stage 5.
3. Not sure how true but have been told by people in the IPP game that if they have a 100MW contract they cannot supply the extra 15MW they have at times, which is often. Issue a directive that pays IPP their extra power at a flat 90c/kWh for anybody that has spare.
The longterm issues are obvious:
1. Do not allow Eskom to ever again build ANY generation other than on fixed price EPC turnkey build operate transfer contract. Whether coal or renewable. Done. They have never in their 80y done any project on time on budget. Not ever. Not going to start now.
2. Immediately contract EPC Turnkey parallel construction of the three pumped storage schemes identified ages ago and hand it to Eskom Transmission to run. Along with this, contract for 20GW of renewables. Use what we need live, store what is surplus in pumped storage.
Can carry on all day but get CR committee to respond?
I won’t pretend to know much about the intricacies of the matter, but my five cents towards relative appeasement is to encourage predictability. Yes, we have Eskomsepu(oe)sh but it has become a real poespas navigating the information with the constant and sometimes daily changes to stages and their implementation times. Be consistent with stage 4, 5 or hell, even 6. Shut everything down everywhere for however many hours over however many weeks at the same time every day. This way, everyone knows that everyone is in the same boat; we won’t have to schedule online meetings for ungodly hours because the Snor City’s power goes off just as Cape Town’s comes back on. The frustration would remain, but since we’ve somehow got used to accepting unpredictable stages at unpredictable times, we would have no problem accepting – and better adapting to – predictable stages at predictable times, would we?
Here is a proposed solution that has not been mentioned before:
1) Follow the model and processes that has been proven internationally: metros issue 20 year power purchase agreements to power producers.
2) The power producers submit these agreements to financiers who then privately finances the capital.
3) The FIT rate need to ensure that payback period is about 10 years. This can be achieved by paying a FIT rate that is financially viable.
4) Currently, the income of metros from electricity sales have been reduced by more than 50% as the don’t have electricity to sell.
5) Even if the metros pay the same FIT rate initially as their domestic rates, it would still be viable as it would stop people from running generators, assist businesses to continue operating, allow traffic to flow and government offices to operate.
6) Internationally, many countries have shown that it is possible to install 7GW of solar per year. This is the size of 3 Medupis’s at current capacity. The cost of coal alone is R1.50/kWh and when finance cost is included it comes to R50/kWh. Then the operational costs have to be added.
7) In summary, metros can be the catalyst in resolving the energy crisis within a year and without having to raise any capital.
I have rooftop solar grid tied . I only have 1.5kw of panels. My inverter can take an additional 3kw. A simple change to 12b of income tax refund for households too, would be enough incentive to upgrade. Feed in tariffs to allow recouping would be further investment. We are talking DAYS to implement, not weeks or months. There are many like me