Fiscus must refurbish Eskom plants, electricity minister says
● Lack of investment will only lead to more load-shedding, Ramokgopa says
Electricity minister Kgosientsho Ramokgopa says the fiscus has to invest in refurbishing SA’s coal-fired power stations to improve their performance and will advance this as his preferred option when he presents his plans to cabinet before the end of this month.
He said it was necessary to think outside the constraints of Eskom’s balance sheet and provide fiscal support to the utility, even if that resulted in a bigger budget deficit.
Ramokgopa was briefing the media on Thursday after his recent visits to the country’s 15 coal-fired power stations to familiarise himself with the operations and what could be done to ease crippling loadshedding.
“Eskom has no money to invest in capital cost,” he said.
“When you accept that as a given and say there is nothing you can do as a country, then accept that you are going to have higher levels of load-shedding, then accept that the total cost to the economy continues to be exponential.”
The investment would be recovered in terms of higher economic growth, job creation and higher tax revenues, Ramokgopa said, stressing that difficult, hard decisions needed to be made now and in the medium and long term.
Ramokgopa said he would make a presentation to cabinet on the choices available, though his preferred solution was both to increase generation and reduce demand.
The cost of the required investment in power stations to improve their generation capacity and in their associated mines to provide better coal had not yet been calculated, but an attempt would be made to do this before the presentation to cabinet, he said.
There would also have to be investment in the grid.
“I am more than confident that we have both the capacity, the will and the expertise to resolve this load-shedding,” Ramokgopa said.
“I am more than confident and I am sure that once I go to cabinet and map out what these options are we should be able to say to you that these are timelines that it will take.”
Decisions also were required on granting emissions exemptions to the power stations, he said.
Another option was to get the private sector involved in the refurbishment of old plants, Ramokgopa said, adding that did not mean privatisation, as the work could be done on a build, operate and transfer basis.
Also necessary, Ramokgopa said, was a rethink about the pace at which SA achieved its nationally determined contributions to achieve net zero emissions so as not to inflict harm on the SA economy.
The presentation to cabinet would deal with the implications of the given timelines, he said, and a recommendation would be made to amend the timelines set out in the energy action plan.
Another decision to be taken was whether to close down old power stations at the current rate or to delay this and refurbish them to extend their lifespan, given SA’s reliance on coal for baseload energy.
Importing power from neighbouring countries and measures to reduce demand were also a consideration, he said.
Before his presentation to the cabinet, Ramokgopa will be talking to participants in the renewable energy sector.
Ramokgopa noted that there was a shortfall of 6,000MW of generating capacity to meet demand.
The energy availability factor — the percentage of total installed capacity available at any given time — was at 53% and meeting demand would only get more difficult in the winter months, he said.
Asked about the now abandoned state of disaster to deal with load-shedding, Ramokgopa said while his interventions did not rely on it, there were interventions by other departments that had required it.