SA POWER SUPPLY TO REMAIN HIGHLY CONSTRAINED, WARNS MOODY’S
- South Africa’s electricity supply will remain extremely constrained until the mid- 2020s, Moody’s Investors Service said in a report on the electricity market on Tuesday.
The report comes as the country faces a third consecutive day of load shedding as Eskom lost the battle to keep up with electricity demand, forcing it to drop customers from the grid to avoid it tripping.
Eskom’s reserve margin has been eroded by unplanned breakdowns of its plants, leaving only 64 percent of its units available (known as the energy availability factor) to dispatch electricity.
The Moody’s report says that despite the addition of new capacity to the grid — about 6, 700MW from new power stations Medupi and Kusile and from other sources — the decommissioning of some of Eskom’s older units will mean the supply is only moderately eased.
It also warns that new renewable capacity will have lower load factors as solar and wind energy is variable and new capacity from other installations “could be subject to delays or poor performance, maintaining pressure on the reserve margin.”
Much of Eskom’s coal fleet is ageing with 11, 000MW-14, 000MW due to be retired by 2030. This amounts to about 25 percent of Eskom’s current capacity of 45, 000MW.
However, some of these may have to be retired earlier if Eskom does not get permission to postpone environmental standards compliance.
Permission was granted to postpone compliance until 2020 and in some cases until 2025. If this is not granted about 18,000MW of units will have to be shut down in 2019 and 2020.
“Given the tightness in the system, that does not appear to be a viable solution for the government so a solution is likely to be sought,” the report says.
The economic growth scenarios modelled in the draft Integrated Resource Plan — SA’s long-term energy plan that has been tabled for discussion by the government — also points to serious system constraints in the future, notes Moody’s.
“Even under a low-demand growth scenario of 0.64 percent or a no-growth scenario of 0 percent the reserve margin looks tight, particularly if we take account of generally ageing and therefore less reliable assets,” it says.