Eskom's Kriel power station in Mpumalanga will have 2 400MW of its generating capacity taken out of service from January 1 unless the utility is granted a variation order allowing it to exceed emissions limits that have been made more stringent. Such an action could severely restrict economic growth.

Johannesburg - South Africa is weeks away from an extended dark age with Eskom planning to reduce its generating capacity to comply with environmental regulations from January 1.

The reduction would force the country to limp through to the second half of next year, with almost no safety margin between supply and demand, as there would be no capacity to replace the 2 400 megawatts that Eskom plans to take down at its Kriel power station until Medupi comes online.

But even when the first Medupi unit is commissioned, it will only add 800MW to Eskom’s generation capacity, a third of the capacity that could be taken down at Kriel.

A new, protracted power crisis will crimp economic growth, which is already faltering after gross domestic product (GDP) turned in a lacklustre 1.8 percent growth in the third quarter.

Azar Jammine, the chief economist at Econometrix, warned that the shutdown of Kriel, equal to 6 percent of Eskom’s capacity, was a “severe threat” to the country’s economic prospects, noting that it could cut half a percentage point off next year’s predicted GDP growth rate of 3 percent.

The state of living on the knife-edge was likely to start at the end of this month as Eskom had to comply with its new emission licence requirements in Mpumalanga from next month, Eskom’s group executive for sustainability, Steve Lennon, told Business Report yesterday.

Given the Kriel situation now and the ever-present prospect of unplanned outages, he said this created “a strong probability” that the supply emergency status in which the intensive power business users were asked to cut their consumption by 10 percent two weeks ago could recur.

“To retrofit the station it will take another three to four years. And there is nothing else available to replace that capacity. We will be on the edge even if the worst doesn’t happen; even if one or two units are down,” Lennon said.

With Kriel, an older coal-fired base-load power station in Mpumalanga, operating at 3 000MW capacity, Eskom’s reserve margin hovered between 2 000MW and 3 000MW and even less than 1 000MW on bad days.

The problem began when emission licences for three of Eskom’s power stations, Kriel, Matla and Duvha, were revised by the Mpumalanga government in July. Although the new licences were fixed at the original emissions requirement, they became more stringent, not allowing any exceptions to be made.

In the past, Eskom had a variation order, allowing it to apply for exemption to its emission requirements for the stations with outdated technology or when it was burning poor quality coal.

Lennon said since the new emissions licence became effective in July, the Kriel power station had often emitted twice its emissions limit.

For the station to comply with its emission requirement, Eskom might shut five of its six power generating units.

At Matla and Duvha, Lennon said the power stations had been managing to emit less than their licences stipulated, but there was no guarantee that this could be maintained when the utility experienced coal quality problems. If these two plants also struggled to comply, the utility would resort to reducing output from them too.

Kriel has six units with 500MW of generating capacity each. It represented 6 percent of Eskom’s installed capacity and the 2 400MW that was likely to be shut down could power the whole of Cape Town, Lennon said.

“We are uncomfortable with operating outside the parameters of the licence so by the end of December, if we do not get the variation order, we have to take the action to comply.”

Eskom has engaged the national government to get the variation order for Kriel, which it wants to use as a permanent order until it changes the station’s emissions technology to flue gas desulphurisation in 2017. The station was not prioritised for retrofitting even though Eskom began this process in the 1980s, because it is still a decade away from being decommissioned. Also, other stations such as Grootvlei emit more gases than Kriel.

Eskom had planned to retrofit Grootvlei next year, Tutuka power station in 2016 and then Kriel between 2017 and 2022.

“But we will take a careful look at our capital expenditure programme if there is anything we can do to move Kriel forward. We were prioritising those stations with larger emissions than Kriel.”

Asked what good Eskom’s compliance would do if it meant further power supply constraints, Lennon said the utility did not want to be seen as a culprit in contravening the World Health Organisation’s air-quality standards.

Dawie Roodt, the Efficient Group chief economist, said there was a simple answer to the problem: “If environmental laws are responsible, the answer is easy: change the law.” He said the economy faced a vicious circle. If electricity was not available, the economy could not grow. - Business Report