Critics scorn notion that IPPs can plug Eskom’s capacity crater

Critics are casting doubt on President Cyril Ramaphosa’s plan to supplement Eskom’s capacity with privately sourced power.

Renewable energy and independent power producers (IPP) were to form an integral part of the patchwork Ramaphosa sought to employ to mend the broken energy system, which has plunged the country into load shedding since late last year and apparently will for most of the next two years.

But two analysts in the energy sector cited uncertainty and lack of capacity as probable stumbling blocks in Ramaphosa’s attempt to avoid load shedding over the next 18 months and beyond.

Energy analyst and industry insider Ted Blom said South Africa’s potential for renewable energy production under the current independent power producers legislation could not contribute a notable proportion of energy needs.

“Under the current scenario, IPPs are contracted for a minimal number of hours per year and one can’t say if the wind will blow longer or the sun will shine longer.

“So, the IPPs in the renewables provide a small amount of extra power. It is really nothing to write home about. You really cannot say that from IPPs alone you can salvage the grid.”

According to Blom, IPPs under the current dispensation could only provide a maximum of 3 gigawatts out of 46 gigawatts needed by Eskom.

Ramaphosa announced that a Section 34 Ministerial Determination would be issued to the Integrated Resource Plan 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal. Municipalities “in good financial standing” would soon be able to buy power from IPPs. Ramaphosa said government would also initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months from approval.

Energy analyst Tshepo Kgadima said finding external sources of electricity would simply put Eskom under more pressure by eating away at its share of the market. Municipalities were Eskom’s biggest customers, he said, accounting for 41.9% of Eskom’s total sales of 208 319 gigawatt hours of electricity for the year ended March 2019.

“In his [State of the Nation address], the president failed to show appreciation and understanding of the catastrophic impact his proposals mean for Eskom.

“Effectively, the end result would be that financially sound and well run municipalities would be the ones in a position to procure from IPPs, leaving Eskom with those municipalities that are already in default to the tune of R19.9 billion and rising, as customers. This proposal is an absurdity to say the least.”

This proposal is an absurdity to say the least