FIFI PETERS: Just selecting up on Eskom, I used to be my Twitter feed and I might see that Stage 10, Eskom and André de Ruyter, in addition to President Cyril Ramaphosa, had been amongst among the dominating hashtags in the present day in South Africa. South Africans tried to make gentle of a darkish state of affairs due to the ability cuts. Today, for the second time in a row since 2019, Eskom applied Stage 6 loadshedding, warning that issues might nonetheless get fairly darkish.
We have unbiased power analyst Chris Yelland on the Market Update for extra. Chris, thanks on your time, as all the time. I believe that it’s important that we haven’t had Stage 6 load shedding in round two years, so I’m questioning in the event you noticed it coming when it was applied on the weekend?
CHRIS YELLAND: Well, that is the third time we’ve had Stage 6 load shedding. We had it in December 2019, and we’ve had it now twice this yr.
I suppose in the event you have a look at the statistics of the power availability issue, which I monitor each week, you’ll see that the power availability issue yr on yr [has been] declining each single yr for the final 5 – 6 years. And in truth this yr load shedding has reached a stage the place the variety of hours misplaced to load shedding is greater than in your entire yr final yr – and we are actually happening for the center of September.
So issues are getting worse. We had Stage 6 load shedding earlier than, so I believe we are able to count on it to occur now with better frequency until we do one thing about it.
FIFI PETERS: Just reflecting on what you mentioned, I’ve an infographic right here that claims we’ve got had 68 days of load shedding thus far this yr – and the yr’s not even over. In the entire of 2021 it was 48 days of load shedding; in 2020 35 days. I believe that image’s fairly clear. It’s been getting worse through the years. Who ought to we be blaming for this?
CHRIS YELLAND: Well, I believe we’ve bought to get previous this blame recreation. Of course individuals do must be held accountable. But proper now we must always give attention to options and actions moderately than complaining. It doesn’t assist to get indignant …. it helps to start out in search of options. So I’m simply tempted to say let’s put that on maintain for some time, whereas we take care of the issues and get right down to options.
FIFI PETERS: But we had been informed beforehand by the present Eskom administration, by the minister of public enterprises, by the president himself, that options had been being labored on. We’ve been informed about options for donkey’s years now. But let’s simply reference it again to perhaps 2020 – and people options haven’t been forthcoming. I suppose that that’s the reason persons are asking themselves ‘What now?’ by way of accountability, and who ought to be blamed for options having not materialised?
CHRIS YELLAND: Okay. Well, in the event you insist on trying on the blame recreation, let’s have a look at that. First of all, we’ve bought to carry individuals accountable for issues for which they had been accountable. Starting off with a report by Meridian Economics lately – they confirmed that, based mostly on empirical proof, that had we had an additional 5 000 megawatts on the grid final yr, we’d’ve diminished load shedding by 95%. I’m speaking about 5 000 megawatts of photo voltaic, PV and wind.
Now about 5 years in the past [former Eskom CEOs] Mr [Brian] Molefe and Mr [Matshela] Koko stopped the renewable power IPP programme. Had they not, we’d’ve had that 5 000 megawatts on the grid proper now, and we might’ve had 95% much less load shedding. Point primary.
Point quantity two, Medupi and Kusile are supposed to generate roughly 9 600 megawatts of energy. They ought to have been on the grid by 2014 and 2015. To this present day they don’t seem to be absolutely on the grid.
Medupi is struggling important technical points, unable to ship at full capability. One of the models has blown up. Kusile is just half completed, and that which is completed is performing exceptionally poorly. If these had been completed after they had been supposed to, we’d have had 10 000 megawatts – 9 600 MW to be actual – on the grid. We wouldn’t have load shedding proper now.
So these points – the design, the execution – occurred within the years from 2008 to 2015, 2016, 2017, and people individuals who did the design and did the planning and made the selections must be held accountable, for positive. So what I’m saying is we have to maintain those that are accountable for the present state of affairs accountable.
FIFI PETERS: All proper. Point taken. Getting to your level now by way of options, Eskom is speaking about talking with unbiased energy producers to assist them complement their present power deficit. What do you make of what they’re making an attempt to do to repair the issue, and what do you assume they need to do to repair it?
CHRIS YELLAND: Look, once more one has to have a look at what is feasible and what’s inside Eskom’s limits of authority. So let’s begin off by speaking about what’s not inside their limits of authority. Eskom will not be allowed to acquire, so construct, personal and function new era capability. Those selections are taken by the minister of mineral sources and power by way of the general public-procurement processes, and people processes are underneath approach, however they’re working very, very late certainly. Of the emergency danger-mitigation IPP programme introduced by the president in December 2019 [for] 2 000 megawatts of emergency procurement, solely 150 megawatts has been procured thus far underneath that IPP procurement programme by the DMRE’s [department of mineral resources and energy] IPP workplace.
Bid Window 5 is busy collapsing, is failing to succeed in monetary closure. That’s one other procurement by the DMRE’s IPP workplace.
What is inside Eskom’s energy? What is inside South Africa’s energy to ship new era capability rapidly? Well, firstly, there’s quite a lot of current era capability on the market. Eskom introduced yesterday that they’re going to market to seek out out what was on the market, and whether or not it may very well be dropped at the grid, and the way a lot it’s going to price in order that they will contract for a couple of thousand megawatts. That’s not insignificant.
Read: Eskom to acquire emergency extra power to ease load shedding
The different choices are in fact the personal sector – that’s, prospects of electrical energy – from home, industrial, mining, industrial, agricultural prospects doing personal era, so-known as self-era, embedded era, distributed era on a giant scale. This can ship big portions of recent era capability for free of charge to the general public purse and may be delivered rapidly. These are the issues that may and ought to be carried out.
The buyer is the answer. The buyer is the solely answer within the subsequent two years.
FIFI PETERS: Why is Bid Window 5 struggling to succeed in monetary shut?
CHRIS YELLAND: Well, it went out within the public procurement course of, the bidding course of, maybe on the most unlucky time. It was at a time when costs had been declining and the bidders anticipated costs of apparatus, plant to say no nonetheless additional. They got here in with very aggressive low-price bids and perhaps 20 or so obtained letters from the DMRE saying that they had been the popular bidders, and it’s now time to succeed in monetary shut.
In the meantime, the lengthy delay between the issuing of the bidding paperwork and the time when bids had been introduced, the profitable bidders, the entire world had modified. Covid had hit South Africa and the world, the Russian/Ukrainian warfare began, and the worth of issues like copper, metal, aluminium, photo voltaic PV panels, transformers, cables, switchgear, transport, have all skyrocketed.
And so by the point individuals had been now informed to go to monetary shut, the world’s costing had modified and these initiatives, a lot of them, are unsustainable on the bid costs that had been bid at a time after they anticipated the costs to go down and never up.
So they’re not reaching monetary closure. And a lot of them are unlikely to, to the extent the place the minister has introduced that they’re form of going to desert Bid Window 5 and exit to market once more. That’s going to trigger a two-yr delay.
FIFI PETERS: Scary stuff. Chris, we’ll go away it there for now. Thanks a lot for the insights catching up once more, I’m positive, within the close to future, Chris Yelland is an unbiased power analyst.
