The poor state of South Africa’s electricity distribution network has been identified as one of the greatest threats to electricity supply security in the coming years.
In fact, the country’s Minerals and Energy Minister, Buyelwa Sonjica, warned, in early 2009, that South Africa faces an “imminent” electricity distribution network crisis.
Currently, the investment backlog in the distribution sector will cost some R27-billion.
In part, this backlog is a result of ongoing uncertainty over the restructuring of the electricity distribution industry (EDI), which has resulted in grossly inadequate investment in distribution infrastructure for several years. As a result, the network is deteriorating.
The lack of investment in the sector owing to policy uncer- tainty is, some believe, an eerie echo of what happened in the electricity generation sector. However, it is contended, that the years of underinvestment in distribution will be less easy to remedy.
Already a number of power cuts have been related to distribution problems, rather than supply shortages. Transmission difficulties have also caused power cuts.
Networks are not being adequately maintained or strengthened. Skilled and experienced staff are retiring and new, qual- ified engineers are not being recruited in sufficient numbers. One commentator has indicated that, while the country will probably, in time, make sufficient investments in new generation capacity, it is far from clear that any progress is being made in dealing with underinvestment in the electricity distribution sector.
Several years ago, Nersa commissioned independent technical audits of eleven of South Africa’s largest electricity distributors – nine municipalities and two Eskom regions. The results painted a disturbing picture of the state of South Africa’s power distribution infrastructure, particularly among municipal distributors, with the networks of many municipalities being described as being in a poor state, while some were found not to be viable in the medium term. Some municipal exceptions, however, were evident, and Eskom’s distribution regions were observed to be performing relatively well.
The electricity distribution networks of smaller municipalities were described as being in a poor state of repair, with basic contingency requirements being absent. Staff were reported to be demotivated and largely underskilled for their job requirements, and few formal systems were found to exist for managing maintenance processes and for training and developing staff.
The larger municipalities and metros were found to have robust and well-designed networks, but the auditors indicated that these are starting to falter owing to a lack of investment and a shortage of skills. The report states that “it is increasingly evident that the dearth of skilled staff has resulted in the [thinning out] of management resources and loss of control over essential technical elements”, which could have an influence on the sustainability of systems in the future.
Eskom’s distribution regions were noted to be well managed and well run, and “markedly different” from the municipal distributors. The Eskom regions were found to have adequate funding for refurbishment and maintenance, adequate staffing at all skill levels, and sound and competent technical expertise.
These findings lend support to alternative suggestions for the EDI restructuring in which large municipalities retain control of their distribution businesses, with the balance of the country being served by Eskom. Further, these findings call into question why Eskom was not given a leading role in the EDI restructuring process.
A more recent audit of 110 distributors found that only about one-third of distribution utilities have sufficient competent staff. Fifteen per cent of the distribution networks were found to be in an acceptable condition. Adequate maintenance plans were only found at 43% of them, and acceptable technical asset registers were only found in 23% of them.
In an effort to strengthen South Africa’s distribution net- work, a strategy called Approach to Distribution Asset Manage- ment (Adam) has been developed. Adam will focus on 12 priority cities, and will be implemented over a ten-year period. However, while a preliminary business plan has been completed, no budget has been set for the intervention, and it does not yet appear to be fully scoped, priced or funded.
It is also somewhat unclear as to whether such a rescue will be complementary or at loggerheads with the bigger aim of restructuring the distribution industry into regional electricity distibutors (Reds).
However, government agency EDI Holdings has indicated that efforts are under way to align the two programmes, and that best practice solutions will be deployed and carried over to Reds.