Business and goverment in South Africa aim to increase generation capacity by up to 11.5 GW in 2024

  • The partnership between government and business is yielding positive outcomes, such as decreased load shedding, enhanced efficiency in rail and ports, and a decline in security incidents affecting energy and logistics infrastructure, according to South Africa’s president, Cyril Ramaphosa.

The South African Presidency, various Government departments, Business Unity South Africa (BUSA), Business for South Africa (B4SA), and Business Leadership South Africa continue to collaborate in strategic initiatives to address challenges within the key focal areas of energy, transport and logistics, and crime and corruption, in order to grow the economy and restore investor and public confidence.

On Tuesday 5th March 2024, President Cyril Ramaphosa met with members of Cabinet, senior business leaders and technical experts from Government and business to receive a detailed report on progress made to date and constraints that need to be addressed.

“We are beginning to see the tangible results of this collaboration in reduced load shedding, improved performance of our rail network and ports, and a reduction in security incidents targeting energy and logistics infrastructure.

“We are confident that we are turning the corner on our most urgent challenges, and are absolutely committed to building on this partnership as we work to grow the economy,” President Ramaphosa said in a joint statement between Government and Business.

Adrian Gore, co-convenor of the business delegation, said they have achieved real progress over the last nine months, and the partnership is gaining excellent traction.

“The private sector has contributed more than R170 million of support directly into this partnership, and has mobilised over 350 technical experts. We need to capitalise on the momentum and urgently implement the necessary reforms. This will help to improve societal and investor confidence in South Africa’s potential, and mobilize much needed investment to grow the economy inclusively,” Gore said.

As part of the support provided by business, the Resource Mobilisation Fund (RMF) was established to procure and donate resources to support the implementation of the Energy Action Plan. To date, the fund has raised approximately R100m, with R25m already having been drawn down to fund expertise to support the National Energy Crisis Committee (NECOM).

The joint statement said business is looking to scale this model to support the National Logistics Crisis Committee (NLCC) and the Joint Initiative on Crime and Corruption (JICC).

The meeting discussed the progress made over the last three months, as well as key priorities to accelerate progress in the next period.

One of the key updates since November 2023 at the meeting is that load shedding is roughly 61% less than the same period last year (80% less for stages 4 and above), and is starting to decouple from Eskom’s Energy Availability Factor (EAF), demonstrating the positive impact of alternative energy sources including rooftop solar.

Other energy related progress reported

The work underway within the National Energy Crisis Committee (NECOM) and the implementation of the Energy Action Plan is starting to bear fruit.

“Load shedding is down by 61% compared to the same period last year, with the return of units at Kusile power station as well as new generation capacity from rooftop solar and private sector investment having a positive impact.

“Reform of the energy sector is progressing, with an independent board appointed for the National Transmission Company of South Africa (NTCSA) and preparations underway for the new entity to commence trading,” the statement read.

On the downside, however, Eskom plant performance remains unreliable with an unacceptably high level of unplanned outages. Under the leadership of its new Group Chief Executive, Dan Marokane, Eskom is working to ensure full delivery on its recovery plan.

The joint statement highlighted that Eskom and business are finalising a Mutual Cooperation Agreement to establish a sustainable framework through which to deploy additional independent skilled experts to support Eskom in this regard.

“The aim for 2024 is to increase generation capacity from multiple sources by up to 11.5 GW, which will enable a significant reduction in the severity of load shedding by the end of the year. This includes improved plant performance as a result of Eskom’s Generation Recovery Plan, additional private investment in rooftop solar and utility-scale projects as a result of policy and regulatory reforms, and projects from previous bid windows connecting to the grid. Initiatives underway to unlock increased grid capacity, successfully conclude Bid Window 7 and open further bid windows for gas-to-power and battery storage will contribute to additional generation capacity in the medium term” the statement said.

Initiatives are also underway to unlock increased grid capacity, successfully conclude Bid Window 7 and open further bid windows for gas-to-power and battery storage will contribute to additional generation capacity in the medium term.

Finally, government is working to accelerate reforms in the energy sector, including the promulgation of the ERA Bill, the establishment of the NTCSA, the finalisation of a national wheeling framework, and the development of financing mechanisms for transmission infrastructure.

Link to the full joint statement HERE

Energy crisis update

Yesterday Eskom announced that Stage 2 loadshedding will be implemented at 16:00 today, as previously communicated. At 20:00 Stage 4 loadshedding will be implemented until 05:00 on Thursday. Thereafter Stage 2 loadshedding will be implemented until 20:00, followed by Stage 4 loadshedding until 05:00 on Friday. This alternating pattern of Stage 2 loadshedding and Stage 4 loadshedding will be implemented until further notice because of the delay to return to service three generating units and the need to replenish emergency reserves.

Unplanned outages account for 16 193MW of generating capacity, while the capacity out of service for planned maintenance has reduced to 6 171MW. This means than more than half of Eskom’s 38000MW coal generation capacity is out of service.

The latest Eskom Energy Availability Factor (EAF) for Week 7, 2024, is 52.79%, with the year-to-date EAF slightly lower than for the same period last year. This despite the return to service of 3 x 800 MW generator units (Units 1, 2 and 3) at Eskom Kusile Power station in November 2023, and the synchronisation of Kusile Unit 4 to the grid in December 2023.

Eskom week-on-week energy availability factor EAF for 2023. Data source: Eskom. Image credit: Chris Yelland. Chris is an energy analyst, consultant, electrical engineer, public speaker, writer and MD at EE Business Intelligence (Pty) Ltd. Follow Chris on X – @chrisyelland. 

Author: Bryan Groenendaal

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