Great interview between Judge Dennis Davis and @Eskom_SA’s CEO André de Ruyter. I’ve provided a précis is the thread below…
Davis: Is it possible to fix Eskom?
AdR: We’re trying but we also need an enabling environment. Power stations are old, unreliable. We need to pivot to a cleaner, greener future and we need better integration of government energy, fiscal, industrial and environmental policies
Davis: Where are you going to get the money to refurbish or replace old power stations?
AdR: It’ll cost R300bn to clean up our coal plant. But that funding could be diverted to a structured, large scale roll-out of renewable energy to create jobs with a just energy transition
Davis: You’re saying renewable energy is the solution? If we relaxed regulatory system to 50MW we could get a lot on the grid in a year. Is that true?
AdR: I’m going to stay in my lane
Davis: Would it alleviate the pressure?
AdR: Meridian study says 5000MW could be added soon
Davis: The country is hearing from the CEO of Eskom that we could relieve the pressure within a year but we have to bang on someone else’s door for this to happen. At least this will buy you time, won’t it?
AdR: Yes
ADR: We could have a phased, controlled closure of old, unreliable coal power stations with the DMRE contracting new sources of renewable energy for the grid as soon as possible.
Davis: But when is soon as possible, only by 2024? Does this mean we’ll only get relief by then?
AdR: Planning assumptions no longer hold. We’re at 64% EAF rather than 75%. There’s a capacity gap.
Davis: How soon can we reduce load-shedding?
AdR: We need to change our approach to how we generate electricity in SA. Not just Eskom. We need new capacity as soon as possible.
Davis: So even if you get Eskom’s efficiency up in terms of existing infrastructure, load shedding will continue? Am I correct in saying that?
AdR: That’s correct. We cannot work miracles with the system we’ve got.
Davis: And therefore it’s in the renewables sector that we’re going to have to look for urgent solutions?
AdR: That’s a fair statement. The advantages of renewables are costs have come down massively. Even if you factor in storage, solar PV is cheaper than anything else.
ADR: Solar PV is scalable. We have great solar radiation resources. We can roll it out quickly compared to large new coal power stations which take a decade to build and banks won’t finance them. There’s also a modest role for natural gas to balance the system.
Davis: I understand there’s significant funding at a reasonable rate to finance RE & reduce carbon emissions. Why aren’t we doing that yesterday?
AdR: You are absolutely correct. We’ve been approached & are exploring ways to relieve our debt while solving our energy crisis
Davis: Why then powerships?
AdR: We are currently assessing the contracts before our Board decides whether to conclude them.
Davis: If we get 5000 MW of renewables quickly will we still need the powerships?
AdR: Their proposed contracts are for 20 yrs.
Davis: That’s crazy!
AdR: If we look at cheap clean technologies and funding, as well as climate benefits, its an extraordinary opportunity for SA to pivot away from fossil fuels. We could face carbon taxes on our commodity exports. Our carbon footprint is not sustainable.
Davis: Is corruption so deeply embedded in Eskom that it’s impossible to root out.
AdR: It’s widespread but there are many good Eskom employees. We’re making progress but too slowly.
Davis: looks like you need the support from those who are telling you to stay in your lane.

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More from @AntonEberhard

14 Jan
With my home solar/battery system I’ve not had a second of load-shedding in many many moons but I mourn for South Africa. Power cuts will cripple our post COVID economic recovery. They cannot be the new norm. There is a wise consensus on solutions. A reminder below /1
Eskom can’t solve SA’s power crisis alone. The avg age of its kit is nearly 40 yrs. 11000MW will be decommissioned by 2030. With R480 billion debt it cannot finance new capacity. Government doesn’t have the money. South Africa is now reliant on private investment for new power /2
Energy minister @GwedeMantashe1 has been in office 21 months but has yet to conclude a single government backed contract for new power. The IRP mandated 5th round of the Renewable Energy Independent Power Independent Power Project Programme has been stalled since 2015 /3
Read 10 tweets
16 Oct 20
1/ Energy security is 1 of 4 priorities in President @CyrilRamaphosa’s Reconstruction and Recovery Plan. Makes sense. South Africa cannot power a post-COVID economic recovery unless it has an adequate & reliable power supply. Here’s my thread on the + & -…
2/ Positives in @CyrilRamaphosa’s plan
Energy security is prioritized
Key intervention areas are recognized:
a) fast track procurement of new power as per IRP elec plan
b) ease licensing for self generation
c) restructure Eskom to enable competition
d) no nuclear distraction
3/ Negatives in @CyrilRamaphosa’s energy security plan
a) silly mistakes around dates for new power coming on line (will embarrass president next year)
b) insufficient detail to hold ministers to account
Accuracy & details matter in strategies if we’re to see postCOVID recovery
Read 17 tweets
27 Mar 20
1/ I’m really trying to stay positive during the lock-down but we also need to think about the resilience of our economy and future growth prospects. This move by SA’s Energy Minister @GwedeMantashe1 was cranky, short-sighted and detrimental. Here’s why (in the thread below)
2/ South Africa’s Energy Minister has gazetted a schedule 2 amendment (under the Electricity Regulation Act) specifying which categories of electricity generators don’t need a licence from the regulator, NERSA. He decided <1MW rather than <10MW, ignoring stakehokder advice
3/ The Dept of Mineral Resources & Energy argues that they need control over, and knowledge of, who connects to the electricity grid & that the NERSA licensing process enables this. Let’s examine why & whether there are more efficient ways of doing this for smaller generators
Read 9 tweets
18 Mar 20
1/ It’s not easy for me to tweet this. I was a Board member of the National Energy Regulator of South Africa (NERSA) many years ago but they are not now serving South Africa as they should. Let me explain why in the thread below. Read this first…
2/ South Africa is experiencing crippling power cuts which constrain economic activity and prejudice household welfare. We urgently need new power procurements and investment, especially now when our economy will be battered by COVID-19 as well
3/ South Africa has a highly regulated power system. NERSA determines the electricity tariff & approves market access through licences (>1MW for generators). NERSA can only approve generation licences if there is an allocation in the IRP electricity plan or the Minister agrees
Read 12 tweets
19 Feb 20
1/ President @CyrilRamaphosa and energy Minister @GwedeMantashe1 (in his speech in parliament today) have outlined progress around 4 interventions aimed at accelerating investment in new generation capacity in South Africa. My comments in the thread below.....
2/ these are the 4 interventions:

a) ease permissions for self generation

b) procure emergency power

c) issue Sec34 determinations to implement the IRP and kickstart IPP procurements

d) allow municipalities to procure their own power

So, what progress has been made?
3/ On self generation: the Minister reported wrong data on the pipeline of applications/MWs for registration or licences. The industry says its much higher.
Minister says NERSA will decide self gen licence applications (any size >1MW) within 120 days, implying there’s no problem
Read 12 tweets
28 Nov 19
1/ Some take-aways from the 6 monthly financials reported this afternoon by South Africa’s national power utility Eskom
2/ Eskom’s net profit for the 6 months is R1.3 billion. But that doesn’t mean the utility is profitable. Higher winter tariffs skew the results and Eskom predicts another record loss of >R20 billion at year end. Dwarfs losses in all other SOEs
3/ Eskom’s revenue is up 10% despite electricity sale volumes declining 1.3%. Tariffs have increased double the rate of inflation. Eskom sells less electricity than 12 years ago. Classic utility death spiral. Can’t sell more so it hikes tariifs and consumers use even less
Read 9 tweets

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