I want to break free

Can a city like Cape Town eliminate its sole reliance on state-owned power monopoly Eskom? Local industry experts have their say.
Read time 6min 00sec
Letlhogonolo Tsoai
Letlhogonolo Tsoai

At the beginning of the year, news reports announced that the City of Cape Town (CoCT) intended to set up its own power supply grid and ‘break free’ from Eskom. While the headlines greatly simplify the complexity of the City’s goals, the suggestion that a city could make a move away from Eskom, and potentially say goodbye to loadshedding, holds particular appeal.

Over the last 20 years, the world’s energy landscape has changed quite a bit, and that’s been compounded by our local situation, says Phindile Maxiti, mayoral committee member for Energy and Climate Change at CoCT. “Global environmental concerns, prompted by a greater understanding of the harmful effects of carbon emissions that lead to climate change, in concert with the systemic corruption, malfeasance, fraud and state capture alleged at Eskom precipitated an energy crisis of national importance, prompting the need for urgent reform.”

Maxiti adds that it’s crucial that the private sector plays a role in addressing the future electricity needs of the country. Not only will this reduce the funding burden on government, it will also relieve the borrowing requirements of Eskom and introduce generation technologies that Eskom may not consider part of its core function. All of this stands to play a vital role in our future electricity supply options, in particular off-grid, distributed generation, co-generation and small-scale renewable projects.

This approach will also give Eskom the space to resolve the ongoing challenges it faces and become a more stable and sustainable energy provider, Maxiti says. “Importantly, Eskom will always have a big role to play, but the sole reliance on Eskom to provide coal-based power isn’t sustainable and it’s not working for South Africa. We need urgent change and a regulatory environment that allows for the diversification of energy.”

So, can it be done? And if so, how?

A combined strategy

“Anything can be done if enough money is thrown at the problem,” says Johan Strydom, senior energy analyst at GreenCape. However, the amount of money needed to leave the Eskom grid entirely makes the move unfeasible from a financial perspective. But this doesn’t mean that a level of independence wouldn’t be beneficial, he admits, noting that this would ensure that the City has mechanisms in place to minimise the impact of loadshedding.

“I must stress, the CoCT is not declaring independence from Eskom. But it does intend to reduce its dependence on Eskom,” says Chris Yelland, MD at EE Business Intelligence. He says there are three ways that the City can get this right, all of which aim to reduce the amount of electricity the City has to buy from Eskom.

SA's energy mix in numbers

According to GreenCape’s Johan Strydom, roughly 84% of all electricity in SA is generated from coal. But the coal generation fleet's operational statistics show that they operate with a 55% to 65 % capacity factor. A capacity factor is the percentage of time the asset actually operates versus the time the asset should have operated, he says. Planned and unplanned outages are part of these statistics. Planned outages include scheduled maintenance, which is in the range of 10% to 15% annually.

Unplanned outages are due to equipment breakdowns and are in the range of 20% to 25% for the entire generation fleet; coal generation is the main culprit for the unplanned outages, according to Eskom system reports. Renewable energy currently contributes 6% to the energy mix in South Africa, with 500MW from concentrated solar power, 2 212 MW from solar PV and 2 752 MW from wind, continues Strydom. The integrated resource plan for 2019 (IRP 2019), endorsed by the government, seeks to decarbonise the future energy mix to allow for an additional 6 076 MW of solar PV and 14 490 MW of wind up until 2030.

Firstly, the City can allow customers within the municipal city boundaries to generate their own electricity for their own use; this applies to personal, commercial and light industry use. To incentivise this, Cape Town has introduced a ‘feed in’ tariff, which will compensate customers for any electricity that they feed back into the grid to be used by others. So, if you put solar panels on the roof of your home and you generate more electricity than you use, you can sell that additional power back to Eskom.

‘Wheeling’ presents another alternative, continues Yelland. In this case, an independent power producer (IPPs) generates electricity and the power is then wheeled across the Eskom grid to an ‘off-taker’, with a fee paid to Eskom for the use of its network. In action, wheeling could see a wind farm in the Western Cape entering into a contractual agreement to sell energy to a manufacturing facility in KwaZulu-Natal, delivering the power using Eskom’s transmission network.

According to Letlhogonolo Tsoai, technical programme officer at the South African Wind Energy Association, something like wheeling is aided by the recent lifting of the licensing cap from 1MW to 100MW. Tsoai believes that this new legislation opens up opportunities for Cape Town to diversify its electricity supply.

Supportive policy and regulatory structures that provide guidance around how the power purchasing between IPPs and municipalities will work are needed, notes Tsoai. Instead of a bi-directional agreement between municipalities and Eskom, the municipalities will be able to enter into power purchase agreements with IPPs to purchase power from them directly.

The third approach, says Yelland, would see municipalities either building their own power stations – gas to power or renewable – or working with an independent generator that would build, own and run its own power station and deliver power to the municipality in the same way that Eskom does.

Chris Yelland
Chris Yelland

Renewable alternatives

The City’s current demand is in the range of 2 400 MW, says Strydom. In the medium term, it needs to aim to receive at least 10% (240MW) of demand from renewable energy sources. By combining the existing pumped hydro system at Steenbras Dam (180MW) and the two open-cycle gas turbines (42 MW and 36 MW) with this 10% from renewables, the City should be able to prevent future loadshedding woes, he continues.

Eskom will always have a big role to play, but the sole reliance on Eskom to provide coal-based power is not sustainable and it’s not working for South Africa.

Phindile Maxiti, City of Cape Town

But building your own power station isn’t as simple as it seems, stresses Strydom. Running such an operation requires specialised infrastructure and skills. Some credit needs to be given to Eskom's system operators who ensure that the grid is balanced. “For the country to receive good quality electricity, electrical generation and electrical load need to be balanced in real-time. These system operators have the skills and systems to ensure that happens. Loadshedding is one of those mechanisms used to ensure the balance is in the grid; it's terrible, but the alternative is much worse.”

For Tsoai, renewables offer social, environmental and economic benefits that align with the globe’s sustainable development agenda. A major benefit of renewables is rollout speed. The time it takes to complete the construction of a wind farm – approximately 24 to 36 months – is about half the time it takes to build traditional power generation facilities, such as a coal-powered plant. This means that it is significantly quicker to develop the renewable energy needed to contribute to the electrical grid.

“Ultimately, Eskom would like to supply all of us with the energy we need, but it can’t,” says Yelland. “Diversity of supply is a good thing. If we all reduce our overdependence on Eskom for our energy needs, this actually helps Eskom because it reduces the chance of loadshedding for everyone.”

* This feature was first published in the October edition of ITWeb's Brainstorm magazine.

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