Video: Eskom CEO, Dan Marokane marking his 100 days in office. Credit: NewsroomAfrica
News flash
- Speaking on Friday, marking his 100 days in office, Eskom CEO, Dan Marokane said that they do not have to wait for coal power plants to shut down, Eskom can start to build their own portfolio of renewable resources in the form of solar, hydro and battery energy storage capacity.
- Eskom has kicked off this strategy by releasing an EPC tender in April for the construction of a 75MW solar farm at the Lethabo Power Station. Read more
Marokane said they have just over 2GW of projects in the pipelines earmarked for the repurposing and re-powering the coal power stations. The idea is to have these plants fully commissioned before a decision is made to close coal fired power stations, ensuring a just transition for workers. The move may leave independent power producers who participated in the Eskom land lease programme for renewable energy projects stranded. Read more
Related news: Eskom reports poor performance across the board and record loss of R23.9 billion
At reporter from Engineering News asked Marokane how this programme would be funded given that Eskom is prohibited from raising finance for generation under the terms of a R254-billion National Treasury bailout package. Marokane acknowledged that it would also have to find “very creative ways” to fund the projects, which would most likely be pursued in partnerships.
JET funding
The South African government has received 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.
To date, this funding has not been realised largely due to non-compliance to the terms and conditions, internal conflicts and populist mutterings from the side of the South African government. The secretary general of the ANC, Fikile Mbalula, said that the climate finance pact is responsible for the recurrent power outages in the country. Read more
It can also be argued that the rich nations offering the funding do not understand the local context. A repurposing pilot project at the decommissioned Komati coal fired power station revealed major shortcomings. Read more
The South African government is in the process of realigning to unlock the funding some of which could be used to fund Eskom’s planned renewable energy projects. Read more
Eskom debt
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).
A major factor that contributed to the supply constraints is the fact that Independent Power Producer (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 “overproduction” by Eskom and IPP-owned OCGTs of around 2 000GWh for the year.
The generation capacity has since improve in 2024 with Eskom reporting 79 consecutive days without loadshedding (blackouts) due to further incremental improvement in the reliability of the generation fleet whichh includes the strategic utilisation of Open-Cycle Gas Turbines (OCGTs). From 1 April 2024 to 13 June 2024, Eskom spent R2.29 billion on OCGTs, producing 328.43GWh. This is about 74% less than from 1 April 2023 to 13 June 2023 when R7.84 billion was spent to produce 1 280.52GWh. Read more
Author: Bryan Groenendaal
