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Renewable energy delays in 2016 haunt SA today

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South Africa could have essentially solved load-shedding if the country had not stalled critical renewable energy projects in 2016.

This is according to a report by energy advisory firm Meridian Economics, which notes the outlook for SA’s escalating load-shedding problem is significantly worse than generally recognised.

The report is the second of a two-part series, and comes as SA continues to experience energy challenges, with embattled power utility Eskom repeatedly implementing load-shedding over the years.

Corruption at the state-owned company, poor maintenance of power plants, as well as the over-dependence on ageing coal-powered power plants have mostly been blamed for the decay at Eskom.

The country delayed the signing of power purchase agreements with renewable energy producers in 2016 (Bid Window 4) with 26 bidders. The deals were finally approved in 2018.

Now, as the energy shortfall persists, president Cyril Ramaphosa recently outlined that work is under way aimed at increasing the energy availability factor, and closing the electricity gap between generation and demand, which is the root cause of load-shedding.

These include ensuring projects from existing procurement programmes − including Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPP) − reach financial close and are connected to the grid as quickly as possible.

Extraordinary measures

Meridian Economics notes that insights from its empirical evidence demonstrate that practical pathways exist to contain and then resolve load-shedding and kick-start the country’s green industrialisation and decarbonisation ambitions.

However, it points out that unprecedented interventions are required if the country is to ensure energy security.

“Load-shedding in 2021 was the worst on record, with 2022 fast becoming as bad or worse. As the reliability of the existing fleet of generators continues to decline and delays with procuring and connecting new capacity to the grid continue to mount, SA now faces the very real prospect of a return to level six or even level eight load-shedding in the foreseeable future,” says Meridian Economics.

It explains that if the average annual coal plant energy availability factor reduces from the current levels of approximately 56% to below 50%, its modelling shows a widening generation capacity shortfall of between 5 000MW and 7 000MW (up to stage seven load-shedding), in the absence of drastic interventions.

“Given the political imperative to do so, it is not surprising the message from policy-makers is that plans are well under way to resolve load-shedding and it appears most stakeholders assume it is just a matter of time before current efforts bear fruit.

“The inescapable finding from this investigation is that this is unfortunately not yet the case, and that in too many plausible scenarios, load-shedding and power shortages will continue indefinitely,” it adds.

Furthermore, Meridian Economics says, it appears SA does not have a single government entity with the overall responsibility of ensuring a coherent plan is in place to resolve load-shedding, safeguarding that the necessary suite of interventions by different players is co-ordinated, and indeed being delivered; and monitoring progress to provide regular feedback and strategy adjustment.

In the first part of this series, the firm says it laid an empirical foundation for the evaluation of feasible strategies to resolve load-shedding by analysing Eskom’s data from 2021.

In that report, it quantified the impact additional generation capacity would have had on load-shedding if it were already operational in 2021.

“To perform this ‘what if’ test, we focussed on the shortest lead-time and cheapest sources of generation – wind and solar,” it notes.

“Confirmed by two separate modelling methods, the results are startling – an additional 5 000MW of wind and solar capacity (the approximate capacity of two IPP Office REIPPPP bidding rounds) would have allowed Eskom to eliminate 96.5% of load-shedding in 2021.

“The extra renewable energy and capacity would have allowed more optimal use of the coal plant, the pumped storage assets, and the Open Cycle Gas Turbine peakers, reducing the amount of diesel burnt by 70% to 80%.”

It points out the remaining small fraction of load-shedding could have been eliminated by a modest expansion of Eskom’s ILS5 demand response programme, or other aggregated demand response interventions, and 2 000MW of one-hour batteries.

“Such a solution would not only have put paid to load-shedding in 2021 but also have resulted in a net annual saving to Eskom of at least R2.5 billion.”

Escaping the darkness

In response to this development, Greenpeace Africa Climate and Energy campaigner Thandile Chinyavanhu says: “This affirms Greenpeace Africa’s calls for a just transition and decarbonisation of our energy system.

“Renewable energy is now the cheapest energy generation source, and its quick uptake could solve our energy crisis. Minister [of energy Gwede] Mantashe has been a fossil fuels zealot; he has condemned South Africans to darkness, and economic and developmental regression in his dogmatic vision of South African energy policy. This just goes to show that while SA’s energy issues are deep-rooted, maladministration and a lack of political will are keeping us in the dark.”

Chinyavanhu alleges the minister notoriously stalled Bid Window 5 of REIPPP and continues to peddle expensive vanity projects such as Karpowership, which exacerbate the climate crisis and offer little to no reprieve for the unemployed youth, when the evidence indicates renewables are the solution to the crisis.

“The 2019 Integrated Resource Plan must make more provisions for renewable energy to stabilise our system and prevent further collapse of our electricity system,” says Chinyavanhu.

“The South African government needs to embrace the benefits of increasing its renewable energy capacity. South Africa can still write a new story of recovery if our government can let go of archaic ideas and embrace the new dawn of decarbonisation.”

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