It’s not just wet coal

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IOL  Eskom 2 DONE INDEPENDENT NEWSPAPERS File picture: Ian Landsberg

Eskom’s real problem is breakdowns and increasing maintenance at our ageing power stations, writes John Kemp.

Eskom’s declaration of a power emergency last week was followed by a programme of rolling blackouts to reduce demand and stabilise the grid.

This brought the first blackouts to consumers since 2008, but come after load shedding was narrowly averted on several occasions in November and last month as the grid comes under increasing strain.

Eskom asked customers to switch off all non-essential appliances, with the company warning that the “power system is very tight”.

This risk had increased significantly due to heavy rains and an increase in technical problems experienced at some of Eskom’s power stations, the power utility said on Thursday.

It later toughened its warnings.

“To avoid possible power failure in your area, switch off everything besides your TV and one room light,” the power supplier told customers via its website, appealing for maximum conservation.

In this instance, the short-term trigger for the emergency was seven days of torrential rainfall in the east of the country. This soaked coal stockpiled at power plants.

But the underlying problem is the increasing maintenance needs and unplanned breakdowns at Eskom’s ageing power stations, which have cut the margin of spare generating capacity to critically low levels and left it unable to cope with further disruptions.

Electricity consumption has actually grown much more slowly than either Eskom or the government forecast four years ago.

In 2012, net power delivered to customers was just 249 terrawatt-hours (TWh) compared with the 270TWh predicted in the 2010 Integrated Resource Plan, which remains the government’s official plan for the electricity industry.

Several factors have contributed to the reduction in electricity consumption relative to the forecast trajectory.

Eskom’s power buyback programme provided incentives for miners and other industrial customers to cut consumption and may have reduced demand by as much as 4TWh, according to the Department of Energy.

Hefty price increases over the past five years have also curbed consumption. Furthermore, some energy-intensive users – such as smelters – appear to be relocating activities to countries with more competitive power prices.

The energy-hungry economy appears to be becoming less energy-intensive in response to rising power costs.

Following the 2008 blackouts, municipalities, the national government and Eskom have all been aggressively pushing energy efficiency programmes.

But the government admits that slower growth in demand may also be due in part to the fact that supply is simply not available.

In its update last year to the Integrated Resource Plan, the Energy Department notes “the constraints imposed by the supply situation and the strong likelihood for suppressed demand, by industrial consumers as well as domestic consumers”.

South Africa’s power supply theoretically totals more than 48 000MW. Eskom has more than 42 000MW of its own generation capacity. Another 3 000MW is controlled by independent generators such as Sasol.

The Energy Department estimates the utility can call on consumers to reduce demand by up to 2 500MW when supplies run short.

The problem is that much of the fleet is unavailable.

Following the blackouts in 2008, Eskom has boosted supplies by postponing scheduled maintenance. However, the result has been a “deterioration in the performance of the ageing fleet”, according to the Department of Energy.

The 2010 Integrated Resource Plan assumed 86 percent of Eskom’s generating capacity would be available on average, but it has dropped to less than 80 percent.

In recent months as much as 23 percent of Eskom’s generation capacity has been unavailable, according to calculations by Bloomberg.

As capacity margins have narrowed, Eskom has been racing to bring as many power plants back online as quickly as possible.

But in the long term, the strategy of postponing maintenance at the cost of deteriorating availability is unsustainable.

“Eskom has proposed a new generation maintenance strategy that aims to ensure the required maintenance is carried out on key identified generators, regardless of the demand-supply balance,” the Energy Department explains in its update.

“The final objective is to arrest the deterioration in performance and return the average availability factor to 80 percent over the next 10 years.”

But that could mean even more rolling blackouts over the next few years as Eskom tries to stabilise the condition of the fleet. – Reuters

 

* John Kemp is a Reuters market analyst. The views expressed are his own.

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