South Africa's vastly improved energy supply is proving a major boost for business confidence — but an energy expert believes now is the ideal time to bring additional generation and assist millions of households that can't afford electricity.
As Eskom celebrates 100 days without plunging the country into darkness through load-shedding, the power utility also announced that 800MW of energy was added to the grid when Kusile’s new power generating plant, unit 5, was synchronised this week.
The additional 800MW — coupled with the anticipated return of unit 2 at Koeberg nuclear station in October, planned synchronisation of Kusile’s final generation plant unit 6 in December, and Medupi’s unit 4 scheduled to return to service in November 2024 — will see Eskom enjoying a stable energy generation period.
Eskom told Business Times the improved performance “is a positive development and indicates Eskom’s commitment to ending load-shedding as soon as possible”.
“However, the winter forecast (published in April) anticipated a likely scenario of unplanned outages at 15,500MW and load-shedding limited to stage 2, and this remains in force,” Eskom said.
Medupi’s unit 4 was hit by an explosion in August 2021, resulting in extensive damage to the generator. The incident occurred during activity to displace hydrogen with carbon dioxide and air for the purposes of finding an external leak.
When the additional capacity is achieved in December, this would mean Eskom would have added more than 2,500MW of energy in about five months — which is more than two and a half stages of load-shedding.
Eskom is currently achieving a high energy availability factor (EAF) of 62.8%, up from last year’s 58.3% and 2022’s 60.3%. EAF is the difference between the maximum availability from Eskom’s plant with the exclusion of renewables, IPPs and imports.
Koeberg’s unit 2 is currently undergoing a steam generator replacement project which will extend its lifespan.
Business Unity SA’s head of energy, Happy Khambule, said the level of confidence for business has been instilled by the positive energy position. “This is a good sign and instils a level of confidence that we’re getting back on the right track,” he said.
Last year, Eskom implemented load-shedding for more than 330 days, recording the worst load-shedding year yet.
Khambule said the interventions, including adhering to maintenance schedules by Eskom and other collaborations with business, yielded positive results. “I’ll cautiously say we’re stabilising the downward trend, we are not where we need to be but we are far away from where we were last year,” he said.
SA’s energy demands had been reduced, largely due to a slow economy and low production across various industries, including mining.
I’ll cautiously say we’re stabilising the downward trend, we are not where we need to be but we are far away from where we were last year.
— Happy Khambule, Business Unity SA’s head of energy
Former Reserve Bank deputy governor Kuben Naidoo recently told delegates at a two-day conference there was a possibility of load-shedding returning, should the mining sector ramp up production. He was speaking at the Operation Vulindlela conference hosted by the Presidency and National Treasury, in collaboration with the Southern Africa Towards Inclusive Economic Development programme.
Naidoo said if production was ramped up in the coal mining industry, that could spell disaster and lead to the return of rolling blackouts. He said he believes the reason “we don’t have load-shedding is because the mining sector is in a deep recession”.
Khambule, however, said even if the mines immediately ramped up production and increased their energy demands, the grid would still fare better, as this would not drastically affect the grid due to many high users having other alternative energy sources.
“For a period of years we’ve had suppressed demand even when load-sheddding was starting. We had asked large users such as your mines and smelters to reduce demand to allow us to weather the storms, especially in 2010. So, our mines and the economy got used to that,” he said.
Khambule said the current situation was very different. “Most mines are not relying only on Eskom power but have blended solutions. So it won’t be bad... there would be an increase but we are also increasing the amount of generation we put onto the grid every month and every day, actually,” he said.
Eskom had done a good job by keeping to the maintenance plans and ensuring that power plants are working at the expected capacity, he said.
Energy and electricity minister Kgosientsho Ramokgopa told Business Times that government was consistently looking for emergency energy solutions to be able to boost business confidence and help grow the economy. He said what has been achieve has only managed to fend off load-shedding so far, and was not sufficient to assist with growing the economy, which has suffered due to load-shedding.
“If we want the economy to grow — as you know it’s barely growing. With the current performance, there is no room to get the economy to grow by 1.5% to 3%. So we really need to get new generation capacity,” Ramokgopa.
“We cannot rely on Eskom alone, we need an emergency intervention that will carry us for two to three years, something to give us electricity rapidly. If we were to lose four units now, we would be in trouble as we need a buffer to protect us from load-shedding.”
The reduction of unplanned outages is another factor that contributed to the improvement in energy supply. Eskom said the Unplanned Capacity Loss Factor has decreased to 27.1% for the financial year , from April 1 2024 to June 27 2024. This represented an improvement from 35.1% in the corresponding period last year, according to Eskom.
The utility said overall electricity consumption has “across several sectors increased compared to the same time last year”, since load-shedding was suspended earlier this year.
Although there were no exact figures and details to illustrate the increase in energy demand, the Eskom has already established that the trend was continuing. “This [increased demand across several sectors] is due to a number of factors, including the suspension of load-shedding. A detailed analysis, which includes the improvement in generation, will need to be done in order to further shed light,” it said.
Independent energy analyst Clyde Mallinson said this was the most opportune time for planning additional energy generation capacity while the country was not that desperate.
“We should use the opportunity not to gloat or celebrate but to ensure that we build new generation,” he said.
Mallinson said even though SA the was not completely out of the woods, Eskom had done well to stabilise the energy supply situation. “We’ve turned the corner and we’ve got good cover. And the other important thing is we don’t have to run those units all the time flat out like last year.”
He said as most of the energy generation fleet Eskom relies on is old, and investing in additional generation was key to ensuring the country’s energy situation would not regress. “When availability was low, we were overutilising what was available all the time. We were desperate and we were pushing the units that were available much too hard.”
Last year, SA experienced the worst load-shedding yet , where average energy shortages were around 1,800MW during peak hours, according to Mallinson. However, the demand this year was lower, almost by the same amount SA was short of last year, at around 1,400MW, according to Mallinson.
“As soon as you’ve got a bit of surplus... we are in a position now where we’ve got enough energy but we still might fall short on a cold winter’s nights, where we may not have enough for what the grid demands.”
Mallinson said this was an opportunity for SA to prioritise around 10-million households which were experiencing “electricity poverty” due to the inability to afford it, among other reasons.
“So, in fact, 10-million households in South Africa SA are load-shedding all the time because they just cannot afford electricity ... the majority are load-shedding voluntarily. We need to strive to achieve social transformation by designing funding mechanisms [to assist the poor to have access to more electricity].”
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