IN a desperate attempt to mitigate the worst power cuts in two years, the City of Cape Town burned through almost half a million rand of ratepayers’ money on aviation fuel to operate its open-cycle gas turbines (OCGTs) this week.
Eskom has implemented the worst power cuts the country has seen since the end of 2019 this week. It has blamed the outages on striking workers hampering efforts to bring faulty generation units back online.
The remainder of the striking Eskom workers affiliated with the union NUM returned to work last night after all unions met with the utility’s management on Friday. Chief executive of power utility Eskom, André de Ruyter, said he had personally briefed President Cyril Ramaphosa on an ongoing electricity crisis.
The unions and De Ruyter return to the Central Bargaining Forum on Tuesday. The City said should it run out of fuel reserves it may only be able to mitigate one stage of load shedding as opposed to the usual two stages.
The Automobile Association predicted a possible increase of R1.80 in the petrol price, and an increase of R1.60 in the diesel price on Wednesday. The general fuel levy was reduced by R1.50 from March to June. For July, the levy will decrease by just 75 cents.
“In effect, that 75 cents that is being added back to the General Fuel Levy will push the fuel price to over R2, and that will be very worrying for consumers,” said AA spokesperson, Layton Beard.
Cape Town mayor Geordin Hill-Lewis told Weekend Argus that it would cost a whopping R1.6m per day to run both the Athlone and Roggebaai power station OCGTs.
That’s only if they were to operate for a full 24 hours and if Eskom implements stage 6 load shedding.
The mayor said the cost was justified by the imperative to limit the economic and infrastructural side-effects of load shedding.
“However, we never run these facilities to this extent,” Hill-Lewis said. “This week, we ran the 40MW Athlone facility for a total of 10 hours (two hours per day during each evening peak, and on one day during both the morning and evening peaks).”
In winter, from 6pm to 8pm is the City’s highest demand period of any time in the year. This is attributed to people cooking more, heating up geysers and using heaters at home.
“We did not run the 20MW Roggebaai facility. The total cost of fuel for the Athlone OCGT for this week was approximately R440 000.”
Energy expert Chris Yelland said it made economical sense if there were no cheaper options.
“OCGTs deliver power in the region of R5 a KWh,” he said.
“So if the impact on the economy of not having KWh of electricity is R10 or R15 or R20 a KWh then it does make economic sense to run OCGTs even if it’s costing you R5 a KWh to run a OCGT running on aviation fuel.
“So it all depends on what is it costing the economy of not having that power that was going to be delivered by OCGTs running on aviation fuel,” Yelland added.
Another energy expert Ted Blom said the City had “no clue” as to what its doing.
The lobby group STOP COCT said Capetonians probably do not care where electricity comes from and may agree to any measure to get continuous electricity.
“This is, however, a financial ransom where decisions are taken by the City who probably did not follow the correct channels and procedures according to the Municipal Acts,” said founder Sandra Dickson.
“Was this additional cost put to tender or at least debated in council? Or is the City just steaming ahead at all cost to implement their ideal and one sided solution? We already had a 9.5% increase in electricity tariffs on Friday.
“STOP COCT and Capetonians would like to know what the impact of these unilateral decisions of the City will have on the electricity tariff increases for 2023.”
Steenbras cannot operate at full capacity indefinitely, according to Hill-Lewis.
“The lower dam fills up as the plant is run; further operation is limited when it is full. The water then needs to be pumped back up to the upper dam, but this occurs at a slower rate than the rate of discharge of water through the plant during operation.”
This simply because water comes down faster than it goes up.
“The plant therefore requires periods of downtime (figuratively, charging) before it can be operated again. Ordinarily, this happens at night and over the weekend, when there is less of a need for mitigation,” he said.
“The prolonged stage 6 load shedding this week, however, has meant that the lower dam is now full and the plant requires downtime so that it can be used to mitigate load shedding next week or if higher stages of load shedding (stage 8 has been mooted by commentators) occur.”
Hill-Lewis said the ongoing sabotage at Eskom's facilities was a problem.
“There has been chronic underinvestment in new generation capacity in South Africa on top of the various maintenance and construction failures that have besieged Eskom for decades,” he said.
“Many of Eskom’s (ageing) coal plants will reach their decommissioning dates in the next 10 years. It is clear that the only way that we can achieve energy security is to fully open up the market to private producers to invest in new generation capacity.”
The Cape Chamber of Commerce and Industry pinned the cost to the economy well into billions of rands.
“Previous estimates of stage 4 load shedding cost the economy around R900m, and estimates for a 24-hour period of stage 6, range up to R12 billion,” said the Chamber’s president Jacques Moolman.
“Not only are many individual businesses brutalised in terms of lost production, load shedding also impacts on the macro level – affecting the exchange rate, the JSE, investor sentiment, business confidence and in the longer term, our sovereign credit rating.”
In a lofty attempt to do away with load shedding the City said it’s expediting its Independent Power Procurement process.
“The bid window for our IPP procurement tender closed this week. Many IPP companies were interested,” Hill-Lewis said.
“We are now in a process of considering these bids and awarding preferred bidder status to the best candidates.
“It must, however, be noted that this is a complex and highly regulated process with onerous requirements imposed by national legislation.
“New generation capacity could be brought online much sooner if the national government were to cut substantial amounts of red tape that apply to this municipal procurement,” he added.
Weekend Argus previously exclusively reported that the City wants to take over Eskom’s residential customers. The power utility said talks were still under way.
“Talks with the City of Cape Town are still at a preliminary stage. There is a long regulated process before any transaction can materialise,” said Eskom spokesperson Sikonathi Mantshantsha.