Until recently, South Africa had excess electricity generating capacity, owing to a period of overinvestment by electri- city utility Eskom. However, this situation has come to an end, and the country now needs to commission additional plants urgently.
From October 2007 to the end of the year, the country was hit by repeated load-shedding and rolling blackouts, and in January 2008, the crisis reached a new level, with daily load- shedding events. At that point, the South African government released a press statement indica- ting that it was the view of Cabinet that the unprecedented unplanned power outages must be treated as a “national electricity emergency that has to be addressed with urgent, vigorous and coordinated actions commensurate with such an emergency situation”.
Although the situation has since been stabi- lised, the country’s power supply is expected to continue to be vulnerable for a number of years into the future.
South Africa’s surplus electricity capacity is now depleted, and Eskom’s reserve margin, which was 25% in 2002, fell to 16% in 2006, and less than 10% in 2008. A more acceptable margin would be between 15% and 20%, which would allow time for maintenance throughout the year as well as for power plants to be operated at levels where equipment is not highly stressed.
With the reserve margin at its current level, opportunities for the maintenance and refurbish- ment of existing facilities have become limited. Of course, in having to limit maintenance and refurbishment activities, unforeseen breakdowns become more likely.
In addition to the problems being faced as a result of generation capacity shortages, some key transmission corridors in the country are constrained, and the distribution sector is in a state of disarray, owing to an extended period of policy uncertainty and inadequate maintenance. It is believed that these sectors also pose a significant threat to the country’s security of electricity supply.
Causes of the Crisis
One of the key reasons for the power crisis that emerged in 2008 is that policy uncertainty and planning confusion delayed investment in new power generating capacity.
A more proximate cause of the electricity supply shortages in 2008 was the fact that a large percentage of Eskom’s existing capacity was unavailable for supply.
Eskom usually undertakes planned maintenance during the summer months, when demand for electricity is lower, and the utility expects, and provides for, a certain portion of its capacity to be out of commission at such times. In early 2008, however, the situation was such that, in addition to the capacity undergoing planned maintenance, a significant portion of capacity was also unexpectedly out of commission.
Reasons for the unforeseen outages inclu- ded boiler-tube leaks and failures, the failure of various smaller pieces of equipment and generator output reductions.
The equipment failures were likely a consequence of the fact that, owing to power shortages, the plants had been run harder, and the equipment was highly stressed. Further, maintenance of Eskom’s generation plants has seemingly been inadequate.
Generator output reductions were linked to serious problems with coal stock levels and quality.
By early 2008, Eskom’s coal stockpiles had fallen to an average of below ten days, with some operations having stockpiles as low as two to three days, and the quality of coal being received by Eskom, while still within the company’s speci- fied quality band, was generally at the lower end of a spectrum that measures energy content, material abrasiveness, particle sizes and accept- able levels of fine material, with the result that the energy yield from the coal was low, resulting in coal-fired power stations operating at below their nameplate capacities.
In addition to the low stockpiles, and the poor quality, Eskom was suffering the consequences of wet coal, which had resulted from unseasonably wet weather and high coal fines content. Unusual weather had also hampered coal-mining operations and logistics.
It is thought that the situation of low coal stocks and the supply of poor-quality coal to Eskom may have resulted from surging global demand for lower-grade coal. Previously, low-grade coal was only appropriate for consumption by Eskom, the plants of which are deigned to run on low-grade fuel inputs.
Eskom continued to export power to neighbouring countries during the period of loadshedding incidents in early 2008. Such exports were in excess of the utility’s firm contractual commitments. Exports exceeded imports during the period by 469 MW.
Nersa, in its inquiry into the national electricity supply shortage and load-shedding, indicated that Eskom needed to explain why it had exported above firm contractual levels during the emergency. Further, the utility called for measures on how to deal with such situations to be included in the South African Grid Code.
Solutions to the Crisis
A number of solutions to South Africa’s electri- city supply emergency were proposed and pursued, including supply- and demand-side interventions.
On the supply side, the key inter- vention is Eskom’s R300-billion-plus investment and capacity expansion programme. This programme includes the development of new baseload and peaking capacity, the recommissioning of mothballed capacity, and the refurbishment of existing operating capacity, across a range of generation platforms.
Owing to long lead times for new baseload capacity, many of Eskom’s investments will only start contributing to the national grid in the longer term and, as a result, a number of alternative solutions to the energy crisis were also pursued.
One such alternative is the involvement of private sector participants in the generation of electricity, and independent power producers (IPPs) are mandated to generate 30% of the additional power capacity required by the country going forward. Towards achieving this goal, Eskom is pursuing three IPP programmes – the Pilot National Cogeneratoin Programme, the Medium-Term Power Purchase Programme and the Multisite Baseload Independent Power Programme. In addition, as part of what is believed to be a separate programme, Eskom has called for expressions of interest from the private sector for the generation of electricity from renewable sources. Further, the Depart- ment of Minerals and Energy is heading an IPP project, although this project has faced several delays, and numerous opportunities exist for sourcing electricity from cross-border IPPs, such as the Mmamabula energy project.
The availability of significant IPP capacity, however, is also a number of years away, and it seems that, in the short term, one of the best options for alleviating electricity supply constraints lies not in the supply of additional capa- city but in limiting the demand for existing capa- city. As a result, a demand-side management and energy efficiency programme has been deve- loped although, to date, the impact of this programme has been fairly limited.
Also, in the short term, Eskom seeks to resolve its coal-supply difficulties.