There has been scant information flow out of South Africa’s electricity war room, which was set up in December to deal with the country’s power crisis. It was interesting, therefore, to hear a recent report back from Professor Anton Eberhard, who has access to the war room by virtue of his appointment to Deputy President Cyril Ramaphosa’s energy advisory panel. The war room falls under Cabinet’s Inter-Ministerial Committee on Energy, chaired by the Deputy President.
Eberhard acknowledged the commonly held belief that “government didn’t have a plan to fix electricity, or, if it did, it wasn’t being implemented”. However, he described this view as a misconception, arguing that a plan had indeed been developed to improve the electricity situa- tion; that the plan was well understood within both government and Eskom; and that implementation was very much under way.
Many of the immediate areas of redress fell under Eskom’s area of responsibility, with the utility being directed to accelerate efforts to add new capacity, while improving the performance of the existing plant.
Here, the utility was being aided on the demand side by a decline in consumption, with overall demand about 1 000 MW lower in 2015 than was the case in 2014 and about 3 000 MW below 2007 levels.
This decline was partly the result of structural changes in the way mines and heavy industry, in particular, consumed electricity as they adapted to both supply instability, as well as to what had been a 300% tariff shock in less than ten years.
However, it was also largely the result of the weak economic climate and business confidence, which had, in turn, been affected negatively by the inadequate supply of electricity and more than 100 days of load-shedding since November last year.
For this reason, the plan continued to emphasise the addition of new capacity through delivery on Eskom’s R250-billion programme to build 11 000 MW of new generation capacity through projects such as Medupi, Kusile and Ingula. In parallel, priority was also being given to ensuring the introduction of renewable-energy and conventional generation from independent power producers (IPPs).
The second major component of the plan related to power station maintenance, which was viewed as critical to improving the performance of the existing fleet. There was still much scepticism about Eskom’s performance in this area, with some observers concerned that the relative supply stability since mid-August harked back to the pre-2010 World Cup days, when maintenance was deferred in favour of keeping the lights on. However, Eberhard insisted that this was not the case: “It’s pleasing to announce that Eskom is not compromising on its maintenance – the maintenance levels were quite high even through the last winter.”
But greater efforts were required to bolster complementary supply through baseload IPPs and Eberhard was optimistic that progress was being made through the Department of Energy’s IPP Office, which had set up “extraordinary capabilities and professional competence to contract with IPPs”.
But Eberhard stressed that the plan did not begin and end with the immediate crisis and that the war room was also beginning to investigate longer-term structural issues.
“It’s not the private participation that is necessarily the big issue – maybe it’s not even competition that is the big issue. But some kind of unbundling could deliver real performance improvements,” Eberhard mused, again flagging the possible virtues in separating Eskom ‘generation’ and ‘wires’ business.