Premier's 16th Energy Digicon looks at the future of power generation

Media Release:  Premier Winde’s 16th Energy Digicon looks at the future of power generation in South Africa

With South Africa plunged back into higher stages of blackouts following several weeks of a slight reprieve from the worst of loadshedding, Premier Alan Winde’s 16th Energy Digicon focused on the burning questions of what will the future of power generation look like. And what role will Eskom play in the new, emerging energy landscape?

To help unpack and answer these questions, independent energy policy and investment analyst, Professor Anton Eberhard, who also heads up the Power Future Labs at the University of Cape Town’s Graduate School of Business, was the Premier’s special guest this week.

In his weekly energy status update Special Advisor on Energy to the Premier, Mr Alwie Lester, pointed out that the energy availability factor (EAF) has been promising over the past few days. “Over the past week, we have seen an improved EAF of 58% hovering close to 60%. There are a number of factors that contributed to this,” explained Mr Lester. “The winter outage plan has contributed to that with less maintenance at power plants taking place during winter. Some of the big power users, such as mines, do their own maintenance over this period due to a different pricing mechanism.”

“Eskom has winter and summer tariffs, with the winter tariff being higher so the bigger customers tend to plan their outages over winter. You, therefore, see an opportunity for more energy being made available.” There have also been no additional unplanned outages, but more generation units have broken down over the past 3 days prompting the need for stage 4 and 6 rolling blackouts.  The recent colder weather has also been a factor as demand for energy has increased.

Prof Eberhard explained that some energy-intensive users have gone offline due to higher winter tariffs. Add to this a significant contribution from wind energy of about 2GWs, which is almost the equivalent of two stages of loadshedding, “What that means is that the demand that Eskom has to meet is lower,” he said. There have also been fewer breakdowns, up until this week.

Professor Eberhard warned that the country is in for a tough winter, but some respite is expected towards the end of the year with generation units expected to return to service at the Kusile and Medupi power plants in the coming months.

Koeberg power station

Professor Eberhard have an update on the situation at the Koeberg power plant, which is reaching the end of its lifespan. He detailed, “Certain equipment needs to be replaced, including three large steam generators at each of the plant’s two  reactors before its operating licence is extended.” But this has been dogged by delays.

“This work is years behind. Even this year’s deadline for unit 1 has slipped from July to September and now to October this year,” added Eberhard. The outlook of the situation is of great concern as unit 2 will then have to come offline for nine months for refurbishments, meaning up to 200 days of outages planned for next year and 2025.

Moving to the issue of South Africa’s future power generation landscape and the part Eskom will play, Prof Eberhard focused on two issues. Firstly, Eskom is overly reliant on coal with 84% of South Africa’s electricity generation coming from coal power stations. Additionally, it is becoming more difficult to finance these stations and they will eventually play less of a role in our energy mix because they cannot be maintained.

Secondly, Eskom remains insolvent despite price hikes and numerous bailouts as the current business model is woefully outdated. A new business model implemented by 110 other countries to break their energy producers into 3 branches – transmission, generation and distribution – is really the only way forward for the power utility.

The future of power is green

With Eskom being unbundled to make it more economically viable and efficient, Professor Eberhard emphasised, “You create a platform for private investment to come into the sector and a new power market will be created. New power will come mainly from solar and wind-backed storage and gas, cheaper sources of power. Fifty to sixty GWs of power is needed by 2030, supported by storage and gas to ensure we have a secure power system.”

He continued, “What is incredibly positive is that we are seeing a huge response from the private sector. Sixty-six thousand MWs of projects are currently being developed across the country. Unprecedented innovation is resulting in a very different power system. I have seen more innovation in this sector in the last 7 years than I have seen in the last 35 years.”

With innovation a key value of the Western Cape Government, Premier Winde stressed, “Unlocking the potential of innovation in the power sector means a more stable energy sector complemented and strengthened by job creation, which accompanies innovation.”

He added, “We must continue and intensify efforts to bring more of the private sector into power generation.”

To watch a recording of this week’s digicon, please visit:

https://www.youtube.com/watch?v=aNWzf1Jkz7M