With the further decommissioning of Eskom’s fleet of power stations on hold, the utility needs to start developing its own fleet of renewable energy generation sources, Eskom CEO Dan Marokane said yesterday.
Speaking during a panel discussion at Standard Bank’s Unlocking Africa Conference in Cape Town yesterday, he said that having to deal with load shedding had forced Eskom to look inwards at restoring its operations, while “everybody else was taking advantage in the market while we weren’t looking”.
Marokane said the utility was overcoming its operational issues. It had land adjacent to its power stations available for the development of renewable energy, it was open to partnerships, and it has direct access to the grid system.
He said that while South Africa needed its coal-fired power stations to maintain base load electricity capacity to meet South Africa’s industrial electricity demand requirements, there was space in the market for the renewable-energy sector.
Marokane said the closure of the Komati power station over the past 18 months was not successful, because the planning for the re-purposing the site was not done properly in the beginning of the process, and the results showed that there was the potential to create a “social atomic bomb” when closing coal power stations.
He said, however, that Eskom had learnt important lessons from the process on what was required to achieve the “just” in a just energy transition.
“We must not repeat Komati,” he said.
Marokane said electricity tariff reforms would be implemented in the future, this after an earlier attempt at reforms were not successful.
He said their short-term focus was to achieve an Energy Availability Factor (EAF) of 70% – the EAF for the full 2023 was an average 54.71%, well below what Eskom aimed for and achieving 70% was an important milestone.
Another focus was how the utility transformed responsibly and how it built its own fleet of renewable-energy sources. He said while the jury was still out on development of further nuclear plants, Eskom believed it was an integral part of the energy transition and it had 40 years’ expertise in the field.
He said they also wished to invest in new technologies to improve and extend the lives of their coal power station fleet, and they also wanted to get Eskom off its dependence on the fiscus, also through an appropriate electricity tariff structure.
Andrew Middleton, CEO of the residential solar power company GoSolr, said electricity tariff reform was required to address the pricing mismatches in the price of connection to the grid and the variable cost of power, and to ensure that the grid system was adequately valued in the tariff structure.
“If we get this wrong, we could have a bunch of unintended consequences,” he warned.
Peter Venn CEO of Seriti Green said he too supported the idea of electricity tariff reforms so that consumers were dissuaded from contributing to an overloaded grid system by for instance, charging their electric cars during peak demand periods.
Venn said developing renewable-energy capacity was a long-term project that required considerable investment. For instance, in the case of Seriti Green, a company owned by one of Eskom’s biggest coal suppliers, their first phase involved investing R5 billion to build 25 wind turbines, and 1 gigawatt of grid infrastructure.
He said the longer-term aim was to build 3GW of capacity, which would take an estimated 10 years to develop and cost about R75 billion. Venn said however there was no way the renewable-energy industry could take up the 100 000s of jobs that would be lost through a closure of coal-fired power stations, and the aim of renewables was to diversify the existing energy networks.
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