Electricity minister announces 15GW of renewable energy for next bid window but backs coal in short term

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26-04-2023
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Daily Maverick
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To date, South Africa only has about 6.2GW of installed capacity of renewables, making up about 10% of the country’s total 58GW of installed capacity.

Minister of Electricity, Kgosientsho Ramokgopa, thinks it’s in the best interest of South Africa’s energy needs to extend the life of coal-fired power stations that are set to be decommissioned. BusinessLIVE reported that last week Ramokgopa told the ANC’s National Executive Committee his short-term plan to ease rolling blackouts included relying on more diesel-powered open-cycle gas turbines and fixing the issues at the five worst coal-powered stations. 

But on Tuesday, at the opening of the Solar & Future Energy Show Africa 2023, in a room full of independent power producers, government officials, large energy users, solution providers and academics, Ramokgopa highlighted the government’s huge plans to expand renewables. 

“We are looking at unveiling a mega bid window of over 15,000 megawatts of additional renewables,” he said. 

In the 12 years since the Renewable Energy Independent Power Producer Procurement Programme (Reippp) was introduced, only 6,200MW have been added. 

Ramokgopa said there would be a formal announcement but, “that is the scale of proportion that we’re thinking about…” 

SA is far behind its plans for renewables 

The Integrated Resource Plan (IRP), which last came out in 2019, predicts how much power South Africa will need in the next 10 to 20 years and determines what combination of energy will provide the country with a reliable and least-cost electricity service. 

It has been criticised for being in dire need of an update, but SA has not even met the targets of an outdated IRP, which includes plans for 33% of the country’s electricity to be produced by renewables by 2030.

To date, South Africa only has about 6.2 gigawatts (GW) of installed capacity of renewables, most of which were installed under the Reippp, making up about 10% of the country’s total 58GW of installed capacity.

Coal still the short-term solution

Before unofficially announcing the biggest bid window for renewables SA has ever seen, Ramokgopa said, “The best opportunity to address load shedding in the shortest possible space of time, sits with that [thermal] installed capacity.” 

He explained that as SA has an installed capacity of thermal energy of about 44,000 megawatts (MW), and a nominal capacity (the power produced after taking away the needs of running a power station) of about 39,000MW, sorting out the existing infrastructure is the country’s best bet. 

To “fix Eskom and improve the availability of existing supply,” is the first of five outcomes of the Energy Action Plan which was unveiled by President Cyril Ramaphosa in July last year. 

This is reflected in Ramokgopa’s promises to Eskom employees that the life of ageing coal-fired plants needs to be extended. 

Ramokgopa did acknowledge the poor performance of the coal fleet and its contribution to rolling blackouts, saying that on average the efficiency (or Energy Availability Factor) of the thermal plants is about 51%, but it can come down to 48%, “and that’s why you see a significant amount of load shedding. 

“Also, the 81 units that are with Eskom are highly unreliable,” said Ramokgopa. He said they keep failing due to a myriad of reasons, “which includes… the lack of maintenance over a period of time. Because the Eskom balance sheet was severely constrained, it was unable to make the necessary investment, including maintenance.” 

Ramokgopa said that for bid windows 5, 6 and 7, the government would look at procuring battery storage because of the intermittency of renewables.

“Renewables on their own will not be able to sustain the economy,” said Ramokgopa. “They are still relying on the redundancy of thermal and also nuclear and hydro for them to be able to give us a kind of potential that is possible.” 

Solar has potential, but also constraints 

Ramokgopa highlighted how well-placed Africa is for renewables: “Sixty per cent of the best solar resources globally are located on the continent. Renewables, including solar, wind, hydropower [and] geothermal may account for over 80% of new power generation by 2030, and I want to argue that, in fact, a significant proportion of that 80% is on the African continent.”

Segomoco Scheppers, the group executive for transmission at Eskom, said at the signing ceremony for Bid Window 5 last September, “The reality is that where we find the best renewable resources in the Northern, Eastern and Western Cape, the network is not adequately developed.” 

Ramokgopa said that even though the Reippp had built 6,000MW of power, 800MW were “stranded” in the Northern Cape, “which is our renewable industrial complex. But there is not sufficient grid capacity that makes it possible for us to evacuate those electrons. 

“We need to address the issues of government investments in these spaces, and essentially create a regulatory environment to make it possible for you to make the necessary investment to generate and produce sufficient industrial capacity to make it possible for innovators like yourself to play in that role.” 

Ramokgopa started off his address by referencing financing institutions which have found that rolling blackouts has resulted in SA’s GDP contracting by 5% — a loss of R300-billion to 500-billion to the economy. 

“People have lost the ability to put bread on the table, businesses have closed, so people are entitled to be aggrieved. And that’s why we’re taking every action possible to ensure that we are able to resolve the load shedding problem in our country.”