This comes as President Cyril Ramaphosa appointed a task team, led by former Eskom chief executive Brian Dames on Friday to advise government on what needed to be done to clean up the power utility’s operational, structural and financial mess.
But senior energy and mining strategist Ted Blom warned that Eskom could also face a forensic investigation if his efforts to garner public and financial support yielded the required results.
“We can’t fix Eskom if we don’t know the extent of the problem. I warned them in 2007 of the disaster they are facing now but no one paid attention,” said Blom.
The challenges, according to Blom, varied from maladministration at various levels, lack of knowledge and skills, and poor quality of coal brought from “spaza shops”, which in turn led to technical problems, to a need to open new coal mines.
The latest Stage 2 load shedding, which has been put on hold during the holiday season until January 15, was according to Eskom due to technical problems caused by lack of maintenance.
While experts called for an end to Eskom’s monopoly over the generation and distribution of electricity, they said a solution to the electricity problems went beyond relying on Independent Power Producers (IPPs) for renewable energy.
“The energy from solar and wind is unreliable, expensive and not industrial electricity. We will still need coal or nuclear,” said Blom.
The City of Cape Town has instructed its senior legal representative to approach the North Gauteng High court to request that its application to force the National Energy Regulator of South Africa to buy electricity from IPPs directly be regarded as an urgent matter.
Mayoral committee member for Energy Phindile Maxiti said: “Currently, about 65% of the tariff for electricity goes toward the cost to buy electricity from Eskom. There will thus be a benefit to customers, but more so, diversifying the source of energy supply is vital in Cape Town and in South Africa to enhance energy security and enable economic growth”.
Maxiti said the price of power generated from IPPs would differ based on technology, but new wind power would come in below R0.80 per kilowatt hour as would solar photovoltaic.
However, he conceded that concentrating solar power technologies remained more expensive.
The further cities were from the coal power-generating plants, mostly based in Mpumalanga, the more expensive electricity became, with Cape Town paying as much as R5 per kWh, also depending on the consumption. But half of the city’s energy comes from nuclear power generated from the Koeberg site and the rest is supplied by Eskom.
“That’s equivalent to London drawing half of its energy from Rome - South Africa is big geographically - the same size as the whole of Western Europe - and these factors matter when it comes to supply of energy and the future of energy mix. I believe nuclear is needed in some parts of the country.
“Another site would be ideal in Cape Town as well as Port Elizabeth.”
He said solar and wind-generated power was intermittent and expensive and did not generate many jobs.
“Worldwide, the contribution of renewables to daily electricity generation is much lower than their installed capacity,” Kenny said.
Renewable IPPs achieved an average load factor of 31.5% by March 2017, while the average cost was about 222c/kWh and this cost was projected by Nersa to steadily increase.
Eskom purchased 9584 Gigawatt hours from IPPs at a cost of R21.3billion in 2017 and as of March this year total available IPP capacity was only 3774 megawatts.
Kenny said the City’s approach to IPPs was based on assumptions, including the fact that it would bring down costs.
“They would still have to pay for the cable connection to Eskom. Solar and wind have never provided enough baseline electricity”, he added.
Maxiti said while the City did not have a database of IPPs it would consider doing business with, it would, if the court challenge was successful, opt for a public tender process and solicit proposals from IPPs locally and internationally.@WeekendArgus