Load-shedding warning and reality check in South Africa

[Nat Quinn]

Load-shedding warning and reality check in South Africa

Energy analyst Chris Yelland said load-shedding is completely abnormal, and it should be normal for South Africa to be load-shedding-free.

Yelland referred to Eskom’s announcement that it has achieved 100 consecutive days without load-shedding, which started on 26 March 2024.

The last time South Africa experienced such a prolonged suspension was nearly four years ago, between 08 September 2020 and 11 December 2020.

Eskom’s operational efficiency surpassed expectations, with unplanned outages averaging 12,500 MW since the start of the financial year.

The reduction in breakdowns has improved Eskom’s available generation capacity to 32,816 MW. It last achieved this level of availability on 06 August 2021.

The power utility’s energy availability factor increased to 61.5% between 1 April 2024 and 4 July 2024, a 6.94 percentage point improvement compared to the same period last year.

The weekly EAF increased from 57.0% at the beginning of the financial year to 65.7% from 1 July to 4 July 2024, an improvement of 8.7 percentage points.

These improvements helped Eskom to suspend load-shedding for over three months, which is good news for the country’s economy.

The load-shedding reprieve was achieved without having to burn more diesel to run open-cycle gas turbines (OCGTs).

Eskom spent R3.24 billion on OCGTs between 1 April and 4 July 2024. This is far less than the R9.96 billion spent last year over the same period.

Yelland said Eskom’s 40,000 employees should be commended for their work implementing the Generation Recovery plan and improving the power utility’s performance.

However, he highlighted that load-shedding is completely abnormal. South Africa is one of only a few countries with regular power cuts because of demand shortages.

“We should not think a lack of load-shedding is unusual. It is abnormal to have any load-shedding whatsoever,” he said.

“It is entirely normal to have uninterrupted power, and that is what Eskom and South Africa should aspire to.”

The reasons for lower load-shedding

Yelland said stopping load-shedding for 100 days was a team effort, with some aspects related to Eskom’s performance and others outside Eskom’s control.

Eskom’s lower unplanned capacity loss factor (UCLF), which decreased from 34.9% to 27.1% year-on-year, greatly contributes to the load-shedding reprieve.

Another factor is reduced demand. Many households and businesses have installed solar PV, which takes pressure off the Eskom grid.

The utility’s latest Weekly System Status Report shows that just over 5,565 MW of rooftop solar has been installed in South Africa.

Another factor which helped Eskom is South Africa’s economy’s lacklustre growth, which further reduced demand.

Yelland further credited Electricity Minister Kgosientsho Ramokgopa for his involvement in lifting Eskom’s performance.

“President Cyril Ramaphosa identified the problem, devised a plan, appointed an electricity minister, and created a national electricity crisis committee,” he said.

“The good work these people are doing, including Ramokgopa, played a big role in reducing load-shedding.”

Another reason that few people mention is the high electricity prices, which are reducing demand because households use less power.

“All these factors came together to stop load-shedding for 100 days. Some of them are in Eskom’s control, and others not.”

He added that Ramokgopa, the face of Eskom’s improvement and no load-shedding, is handsomely rewarded politically for his work.

Not the end of load-shedding

Yelland warned that load-shedding has not ended. Although the intensity and regularity are much lower, Eskom still warned that it may implement power cuts this winter.

The lower demand, which is partly due to a warmer-than-usual winter and lower demand from big users, is unlikely to last.

Former Reserve Bank deputy governor Kuben Naidoo said South Africa’s mining sector is the country’s largest electricity consumer.

The sector’s declining output over the past two years has substantially reduced its demand for energy.

Lower commodity demand, elevated operating costs, and logistical bottlenecks have effectively capped the mining sector’s growth.

This, in turn, reduced its demand for electricity. This has unintentionally helped Eskom stave off load-shedding.

“My personal view is that half of the reason we don’t have load shedding is because the mining sector is in a deep recession,” Naidoo said.

“If you switch on the mining sector, I think load shedding will return, so we still need to continue investing in renewable energy and other energy sources to break that constraint.”

Eskom believes it can meet an increase in demand by commissioning Kusile’s Unit 5 at the end of last month, and Unit 6 is expected to come online in November.

This will add around 1,600 MW to the grid, helping the utility suspend load-shedding under current circumstances.

However, this is not enough for Eskom to meet any rapid uptick in demand from the mining sector and industry, would it occur.

As such, the utility has stressed that its winter outlook, which aimed to keep load-shedding to a maximum of stage 2, remains in force.

source:Load-shedding warning and reality check in South Africa – Daily Investor

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