Great interview between Judge Dennis Davis and @Eskom_SA’s CEO André de Ruyter. I’ve provided a précis is the thread below enca.com/shows/judge-yo…
1/ 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
2/ 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
3/ 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
4/ 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
5/ 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?
6/ 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.
7/ 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.
8/ 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.
9/ 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.
10/ 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
11/ 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!
12/ 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.
13/ 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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SA’s draft Integrated Resource Plan (IRP), published today for public comment, is an admission of failure around eliminating load-shedding and it fails to fulfil its declared purpose of ensuring electricity security while minimizing environmental impacts and the cost of supply /1
SA's IRP 2023 admits much “unserved energy” for at least the next 4 years. It advocates delaying the closure of old coal power stations, working around minimum emission standards & provides dodgy conclusions on a least-cost power system without detailing its input assumptions /2
SA's IRP 2023 is a stitch-up, with pre-determined outcomes in-line with what the energy minister has been advocating – wishful thinking around improvements in Eskom power station performance, delays in coal decommissioning, "clean" coal, nuclear energy, & lots & lots of gas /3
Reports are emerging that @Eskom_SA’s diesel tanks for its OCGT peaker plants are empty & won’t be replenished because the utility doesn’t have the cash and/or doesn’t believe the regulator - @NERSA_ZA - will condone budget overspend. SA’s power system at enhanced risk /1
South Africa’s power utility @Eskom_SA’s decision not to refuel its diesel OCGTs removes 2067MW from rapid response resources available to the System Operator at a time of intermittent and declining coal plant output, increasing the risk of more loadshedding and system failure /2
Crazy economics here. So, it’s OK for @Eskom_SA to dispatch more expensive Dedisa/Avon OCGT IPPs (because the regulator allows a pass through of PPAs to consumers) but not Eskom’s cheaper Ankerlig/Gourikwa OCGTs whose overbudget spend @NERSA_ZA might disallow? /3
Mostly I no longer notice @Eskom_SA load shedding. Sometimes I look at the EskomSeP**s App but I don’t need to. I have a solar PV+battery system.
I’m asked often about small scale embedded generation choices. Here are some decisions you might need to make (not exhaustive) /1
The first issue around alternatives to utility grid supply is affordability. We now have competitive options. Households can decide how big they can go - all their loads or only some /2
If your budget is constrained the best option is to buy a UPS system - uninterrupted power supply - a battery that can be charged when grid supply is on and and an inverter (to convert battery DC current to AC) to power a limited number of appliances, e.g. lights, TV, internet /3
South Africa's power market is being transformed. Here’s what’s happening 1/
* Generation licences are no longer required. New Elec Reg Act Sch2, to be gazetted in Sept/Oct, will clarify this. Neither the Energy Minister nor NERSA are now gatekeepers of market entry /1
* Power projects >100kW, which don’t need licences, still need to be registered with the National Energy Regulator of South Africa. This process has been made simpler and quicker /2
* Power projects procured by SA’s IPP Office have had to meet stringent local content requirements. These have now been relaxed by the Dept of Trade Industry and Competition to fast track investment and construction /3
President @CyrilRamaphosa has announced a number of interventions to end power cuts on SA: 1/ Further support for @Eskom_SA 2/ Acceleration of IPP procurements 3/ Further easing of distributed generation regulations 4/ Feed-in tariffs for rooftop solar 5/ Transformation of power
1/ Further @Eskom_SA interventions include:
* recruitment of past Eskom plant operators
* purchase of surplus elec from IPPs, mines, industry
* increased SAPP imports
* demand side resources
* climate finance for grid strengthening
* land leases for solar
* stepped up policing
2/ Accelerated procurement of pvt independent power producers:
* Move REIPPP BW5 2600MW to construction, relax localisation (but more interventions are necessary)
* BW6 doubled to 5200MW
* Battery RfP in Sept
* Gas to power RfP soon after
* New Sec34 determinations
* IRP update
Misleading comments have been made at the current National Energy Regulator of South Africa (NERSA) hearings that IPP costs are a major contributor in the 20% tariff hike requested by @Eskom_SA. Not true. IPP costs have declined and each year result in lower c/kWh for Eskom 1/
@Eskom_SA As production of electricity from renewable energy IPPs supplying @Eskom_SA increases, the overall required revenue will increase, BUT the implications for tariffs in c/kWh is lower as unit costs for renewables fall /2
@Eskom_SA Renewable energy IPPs cost Eskom ZAR 221 c/kWh in 2020 and 218 c/kWh in 2021. Each new renewable energy project added to the grid will further mitigate Eskom price increases. The latest wind costs in South Africa (REIPPP round 5) are now down to ZAR 34c/kWh & solar PV 43c/kWh 3/