POLICY: Electrifying Power Supply Developments In South Africa

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POLICY

Electrifying Power Supply Developments In South Africa

By Glenda Zvenyika

THE electricity supply problems that South Africa has and continues to face are well-documented. Power generation, or lack thereof, has been a source of frustration to businesses and the public as well as a point of embarrassment to Africa’s second largest economy in the face of the international community.

South Africa is currently undergoing Stage 4 load-shedding where 4 000 megawatts are rotationally cut off nationally at a given period. Stage 4 load-shedding is the last resort for the country’s power utility Eskom to prevent a national blackout. This meant load-shedding 12 times over a four-day period for two hours at a time, or 12 times over an eight-day period for four hours at a time.

Eskom and the government were reportedly planning for Stage 5 and Stage 6 load-shedding, which officials said was a race against time to prevent a national blackout and grid collapse from taking place. Stage 5 and Stage 6 load-shedding implied load shedding of 5 000 megawatts and 6 000 megawatts respectively.

However all is not lost. The country has a wealth of opportunities to mine in order to solve the crisis. Even as South Africa’s government has tabled an updated Integrated Resource Plan (IRP), it is clear that a proper policy and regulatory regime attracts investors to help secure energy supply, spur industrialisation and economic development.

This much-anticipated plan comes at a time when the country is undergoing two critical lessons in the context of the ongoing energy security crisis. The first, there is a need to have competition in the power generation, as this enables the use of newer technologies, which gradually drives electricity costs down. The country would also be able to address the environmental impact of fossil fuel emissions.

In a country such as South Africa where unemployment is high, concerns were raised about the impact of new technologies and what the move from coal would have on jobs. This is understandable. However, global experience is that newer technologies open employment opportunities and attract much-needed investments. It is therefore encouraging that South Africa has adopted a sensible approach of gradually introducing new technologies.

The move towards new technologies is global in nature and it is encouraging that sub-Saharan Africa, including South Africa, scheduled capacity additions are mainly from hydropower (32%) and natural gas (26%), along with coal (13%) and solar (12%). Wind accounts for seven percent of scheduled new capacity and geothermal and biomass combined account for four percent.

Again, it is not desirable to move to these technologies overnight. South Africa has massive deposits of coal, which could be converted to a ‘cleaner’ energy source. There should be, if there is not adequate knowledge and technology to exploit this resource for the benefit of the country and its people. It goes without saying that, for the foreseeable future, coal will remain an important component of the total energy mix. Even developed countries such as Germany, which has made strong commitments to renewables, also have coal plants to help provide flexible power.

The second lesson is that, as experience from all over the world shows, a country needs an appropriate mix of energy sources. Relying on one is risky.  For example, Zambia relied on hydro-electricity for many years. Electricity deficit rose to 1 000 megawatts in 2016 as severe droughts reduced water levels at Kariba Dam. In Kenya, low rains pushed the country to generate more electricity using diesel. Diesel is expensive and this increases electricity costs. The intermittency of renewables results in instability of the power grid.

Other factors to take into consideration is Africa has verified natural gas deposits in excess of 500 trillion cubic feet. While most of the gas on the continent is used for export purposes, the drop in gas prices has now made it attractive to develop gas markets in countries with deposits for domestic use as well.

Exploration of this source is also taking place across the continent. The recent fortuitous find off the coast of Mossel Bay could thus be the fillip South Africa’s economy needs. Indications are that development of South Africa’s natural gas industry could boost Gross Domestic Product by R250- billion by 2030, creating up to 328 000 direct and indirect jobs. This would contribute towards a carbon-resilient future, cost-effective power sector and greater energy independence.

From an operational point of view, gas-to-power stations are beneficial because of their flexibility. It is easier to switch on and off, meaning you can supply electricity at the required scale and the time when it is needed, meeting operational efficiencies.

These operational efficiencies are critical and herein lie vast opportunities to utilise and enhance new power-generation technologies further by firmly entering into the fourth industrial revolution. Colloquially dubbed as using new technology in old industries, especially in coal-fired generation projects, digitising the entire supply chain is the way to go. Digitising the entire industry using smart technology provides the energy industry with an opportunity to be fully in sync with accurate predictions and subsequent supply interventions that are able to adequately meet demand.

Granted, newer power generation methods such as solar, wind, geothermal and biomass are already digitised. However, in this day and age it is next to impossible for any integrated resource plan to be truly integrated without the utilisation of digital technology; this, without compromising jobs but rather enhancing future job creation.

It is gratifying to see that President Cyril Ramaphosa has embraced this advancement, recognising the need for value chain optimisation and real time productivity regardless of which power generation methods are in use.

The biggest challenge in realising these opportunities is that they are long-term projects in nature, and they require huge financial resources. Most countries have limited funds, which means they must therefore involve the private sector in power generation.

It is therefore commendable that the South African government has embraced Independent Power Producers (IPPs), particularly in view of the financial challenges facing the lead electricity supply company, Eskom and the country. IPPs present an opportunity for the private sector to participate in growth of the energy sector and for the accomplishment of government’s goal to promoting Black Economic Empowerment and creating black industrialists.

In conclusion, there is no doubt that South Africa will continue to need more electricity to provide better quality of life for its citizens, drive economic and industrial growth. To achieve this, the government and private sector must work together to improve access to and harness local energy resources as well as implement innovative power generation technologies to achieve lower energy costs. The goal is to meet to energy and economic developmental goals. To do this, requires a balanced energy mix that includes renewables, gas and coal power. MA

Ojo Maduekwe

Editor: DISCUSSING AFRICA 

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