Source Article: ESI Africa
In the next 15 years, South Africa will need to install at least 50GW of generation capacity to achieve energy security and will require an estimated R1.2 trillion in investment before 2035 to mitigate the energy crisis.
Eskom Group Chief Operating Officer Jan Oberholzer made this statement at a recent Energy Indaba, in a discussion about the path to reaching energy security in South Africa.
The country has experienced steadily increasing bouts of loadshedding, from 124 hours of loadshedding in 2018 to 1,677 hours by the third quarter of 2022, and the state utility’s ability to meet demand is declining.
With the current difficulties that face the state utility, including the R52bn municipal debt it is owed, theft and sabotage, corruption, breakdowns, explosions and fires, Oberholzer acknowledged that the utility has a long road ahead. As Eskom’s power system is old, neglected and “running in the red”, the utility needs to find the most efficient way to stop its declining generation capacity, and fast.
What happens when you don’t maintain your assets
Among the many challenges that face the South African state utility, Oberholzer also recognised that Eskom has made plenty of foundational blunders, including building power stations before confirming concrete design plans.
Furthermore, the 2019 Integrated Resource Plan estimated an energy availability factor (EAF) which is higher than the current and projected performance, resulting in an approximate 6,500MW gap.
Currently, 20,000MW of grid capacity remains unavailable due to breakdowns and maintenance. In addition, over 50% of the stations older than 40 years are due for decommissioning by and around 2030, with current maintenance initiatives not yielding the expected benefits and resulting in an additional gap than projected by 2025.
Characterising the state of Eskom’s energy system, Oberholzer explained that the current energy landscape in South Africa is a testament to the fact that “If you don’t look after what is entrusted in you, it comes back and gives you the same respect”.
Assuming a 5% increase in demand growth, the generation capacity of Eskom’s existing fleet is expected to ramp down to 15GW from 50GW by 2050, with current projections showing that a new capacity of at least 50-60GW will need to be added by 2030.
Hence, of the R1.2 trillion in investment needed to mitigate the energy crisis, approximately R990 billion will be dedicated to generation capacity, while transmission and distribution capacity will account for R130bn and R56bn respectively.
Finding the ideal hybrid energy mix to address energy crisis
The operational, financial and grid accessibility challenges currently facing Eskom signal the need to pivot to an alternative approach to achieving energy security.
As discussions turned to matters pertaining to South Africa’s energy transition away from coal and toward cleaner energy sources, Oberholzer also pointed out that coal capacity is expected to decrease by over 78% by 2051, supplemented by the increase in gas, renewables and energy storage.
“It will be challenging,” admitted Oberholzer. “But it will have a positive impact on the lives of 60 million people.”
However, the utility COO emphasised that, though they may have an important role to play, renewables are not the answer to South Africa’s energy security woes and that only a hybrid model can provide a solution.
Nuclear, renewables and customer solutions
To advocate for nuclear as a key to South Africa’s energy security, André Pienaar, CEO and founder of C5 Capital, said: “Nuclear energy is not able to contribute quickly to the resolution of the energy crisis in South Africa, but is a long-term source that can play a valuable part.”
As a low-carbon energy source, both Pienaar and Oberholzer agreed that nuclear has an important role to play, not to replace renewables in the energy transition, but rather as a complementary source. As nuclear physicist Kelvin Kemm phrased it: “solar and renewables are all well and good for certain purposes, but they are not going to solve the problem,” and the country should be realistic.
Both Pienaar and Kemm advocated for small modular reactors to meet the energy needs of smaller communities and fulfil the need for flexibility – Pienaar even hinted that he “can see a small modular reactor in Cape Town’s future.”
However, as nuclear as a form of energy still suffers from “reputational challenges”, the first challenge would be to better inform the public and private sectors about the advantages of nuclear energy and address the suspected disadvantages.
Chris Yelland, Managing Director at EE Business Intelligence, stressed the need for communities to work together and advised that customers are part of the solution to the energy crisis, endorsing self-generators who are able to supply energy to the grid.
“Its time for the customers to realise that they are the solution. Eskom is not going to build the 50GW, you are,” said Yelland.
In the meantime, while policymakers strive to find the ideal energy matrix and scrounge up the funds to rehabilitate South Africa’s deteriorating grid, Oberholzer encouraged the public to practice energy conservation and only use what they need.