- Bloomberg reports that the secretary general of the ANC, Fikile Mbalula, said that the US$8.8 billion climate finance pact is responsible for the recurrent power outages in the country.
Mbalula, speaking at a debate between political party leaders in Johannesburg on Thursday, said the closure of coal-fired plants to win the finance is responsible for the blackouts that have hobbled Africa’s most-industrialised economy. The program has “decapacitated us to the point where we are load shedding today,” he said, using a local term for scheduled power cuts.
Mbalula appears to be ill-informed. The climate finance pack has not been signed or implemented in South Africa as yet.
The South African government has actually received additional pledges from Denmark and Netherlands totalling nearly US$3.5-billion in support of their Just Energy Transition Investment Plan (JET IP). This increases the funding pledges to US$11.9-billion after pledges made in 2021 from the ‘International Partners Group’ (IPG) made up of the EU, UK, France, Germany and the US who have committed US$8.8-billion.
The JET IP implementation plan is expected to be approved by cabinet before COP28 which kicks off in Dubai on 30th November but not before it is hotly contested by stakeholders in the political arena which includes the country’s energy minister who wants jobs in the coal industry preserved. Read more
In reality, South Africa’s energy crisis has largely been created by poor planning, wide-spread corruption, fraud, looting and sabotage of the country’s state owned and state run energy utility, Eskom. The utility is bankrupt and has relied on tax payer bailouts over the last 10 years which are set to reach over R500 billion by 2025. The latest Eskom AFS reported by the board at the end of last month paints a dire picture:
- Generation performance continued to deteriorate, while networks and new build delivered variable performance. Plant availability deteriorated to 56.03% (2022: 62.02%), with unplanned load losses rising to 31.92% (2022: 25.35%) and planned maintenance at 10.39% (2022: 10.23%).
- Loadshedding had to be implemented on 280 days during the past year due to generation supply constraints and shortfall from IPP programmes. 9.9TWh (5%▼) decline in sales volumes across every sector due to Eskom and IPP generation supply constraints, leading to loadshedding and load curtailment.
- Gas turbines produced 4 116GWh (2022: 2 725GWh) at a cost of R29.7 billion (2022: R14.7 billion) for Eskom and IPP OCGTs.
- Arrear municipal debt escalated to R58.5 billion (2022: R44.8 billion).
- Net loss after tax worsened to R23.9 billion (2022: R11.9 billion).
Eskom’s generating plant availability reached the lowest levels ever, due to unprecedented levels of unplanned unavailability. A factor that contributed to the supply constraints is the fact that IPP capacity – both renewable and other programmes, such as DMRE’s Risk Mitigation IPP Procurement Programme – has not come online as expected under the IRP 2019, with an energy shortfall of more than 5 100GWh for the year, requiring increased levels of loadshedding and “overproduction” by Eskom and IPP-owned OCGTs of around 2 000GWh for the year.
Additional dispatchable capacity of 4 000MW–6 000MW is required immediately, to support the stability of the power system, create space for maintenance and reduce the need for loadshedding (blackouts).
Author: Bryan Groenendaal