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Eskom gears up for transition to renewables with possible R1.2trl price tag

Mflathelwa said about R990 billion of that sum would be for generation in the energy transition plan, while R330bn would be for meeting compliance regarding air-quality requirements. Image, EPA, KIM LUDBROOK.

Mflathelwa said about R990 billion of that sum would be for generation in the energy transition plan, while R330bn would be for meeting compliance regarding air-quality requirements. Image, EPA, KIM LUDBROOK.

Published Jul 28, 2022

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Eskom has expressed hope that the newly-announced energy plan will help it recover sufficient generation capacity while it gears up for a multibillion-rand transition to renewable energy.

Eskom’s general manager for strategy and planning, Matthew Mflathelwa, yesterday (Wed) revealed for the first time that the energy transition could cost as much as R1.2 trillion.

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Mflathelwa said about R990 billion of that sum would be for generation in the energy transition plan, while R330bn would be for meeting compliance regarding air-quality requirements.

However, Mflathelwa said Eskom would not be able to foot this energy transition bill as it was still saddled with at least R400bn debt.

“We are by no means saying that the R990bn will come from Eskom,” he said.

“We are creating an environment where other investors can come in and invest, particularly on the generation side.”

Mflathelwa was speaking at the Joburg Indaba yesterday where he outlined Eskom’s plans for meeting energy demand and its views on coal and alternative energy sources.

He said that renewable energy was the fastest way to bring on new capacity in the next 18 months to 3 years whilst 300 000 jobs could be created from infrastructure roll-out. Mflathelwa said they were considering alternative technologies, mainly solar PV, wind, and gas.

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“There could be a 4-6GW peak shortfall by 2025 which could increase to over 10GW by 2035,” Mfathelwa said.

“We need to achieve operational and financial stability, prepare for competition and leverage technology to address our challenges.”

On Monday, President Cyril Ramaphosa announced the long-awaited energy reform plan after months of deliberations as Eskom’s generation capacity deteriorated further last month, resulting in the worst power cuts in 2 years.

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Among the interventions announced were recruiting skilled personnel including former senior Eskom plant managers and engineers, and adding new generation capacity to the grid on an urgent basis.

Eskom will also be allowed to buy surplus capacity from existing independent power producers, purchase additional energy from the existing private generators, as well as import surplus power from neighbouring countries.

The struggling power utility said these reforms will go a long way towards easing the power generation constraints the country has been grappling with for some 14 years.

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Eskom spokesperson Sikonathi Mantshantsha said the reforms will accelerate the end of loadshedding and will expand and grow the electricity generation industry in South Africa through structural changes.

Mantshantsha said Eskom was engaged in efforts with all interested stakeholders to introduce the necessary skills where we have gaps at the moment.

Eskom has already reached out to the National Society of Black Engineers to ascertain if members of the NSBE were interested in assisting Eskom to bolster its skills.

“Eskom is placing significant emphasis on recovering its Energy Availability Factor (EAF) at especially its coal plants, where performance has been disappointing,” Mantshathsa said.

“The measures announced by the President will enable Eskom to intensify its maintenance efforts to drive improvements in EAF.”

Eskom’s EAF has been below the required 70 percent for a long period now due to underperforming power stations.

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