Eskom’s glacial approach to grid expansion raises questions about its commitment to a truly competitive energy sector, says Leoné Human, chair of the South African Independent Power Producers Association (Saippa).
“It’s convenient for Eskom not to act on this with the urgency that is required, but definitely not for the country. Accelerating the process would see more renewables being connected to the grid, which means it takes away their monopoly,” she says.
“There’s no other factual reason we can see why they would not want to expand the grid more quickly. We have to assume this if they don’t tell us why they are not lifting their feet and doing what is required for the betterment of the country.”
Human does not believe financial constraints are the problem. In transmission development plan sessions last year, “two of the Eskom big guns” said money was not a problem, and the roll-out of new grid capacity would go according to plan.
But the transmission development plan of 2024 set a target of 14,500km of new high-voltage power lines by 2034, and Eskom is hopelessly behind. “At the current rate there’s no hope of meeting the 2034 deadline. We’re two years behind already. They’re building 74km a year vs the 1,400km required.”
The deadline can only be met if Eskom is willing to “take hands with the private sector and not see us as a threat but rather somebody they can work with”.
Human says concerns about the commitment to a truly competitive energy sector have been heightened by electricity minister Kgosientsho Ramokgopa’s endorsement in December last year of Eskom’s revised unbundling plan, which allows it to retain control of the transmission assets rather than hand them over to the new transmission system operator (TSO) set up outside of Eskom, “in effect rejigging the unbundling process”.
In a webinar this week Eskom stated there was no real difference if the assets were within the new TSO or still under Eskom itself. This is a flat contradiction of the reality, says Human.
“If the assets are under the new TSO then it means they actually have the balance sheet, they have something they can borrow money against. Without assets on its balance sheet the TSO will be unable to borrow or support the large-scale grid expansion that is so urgent.
“So in our opinion the minister’s decision is a big no-no. It does not speak to what was initially thought would happen and what we all supported initially.”
It flies in the face of the Electricity Regulation Amendment Act’s purpose to create an independent TSO outside of Eskom, she says.
“That’s certainly what we thought was the whole idea. What is now happening is something very different. The fact that they can change their mind mid-process and come up with something else is worrying.”
Our grid is very old and fragile. If we don’t look after it, load-shedding can be back tomorrow
Human, an electrical engineer who did substations and overhead design in Eskom for 16 years before going into the private sector, where she did grid engineering for large wind and solar projects, says it’s not just about expanding the grid, it’s also about refurbishing the existing grid, including transformers, substations and power lines.
“It’s not just new lines. Our grid is very old and fragile. If we don’t look after it, load-shedding can be back tomorrow. So it’s not just the expansion that’s not happening, it’s also the refurbishment of the current grid that is not happening.”
The twin threats mean the integrity of the grid is going to “keep going down even more, and we’ll go back to load-shedding because it can’t handle the load. And the load-shedding won’t be small stages.”
“Projects will go into limbo mode just because the grid is not there. Which is very sad because the growth of our economy and our electricity market will slow down.”
Meanwhile, private renewable energy projects are being developed at a much faster rate than the Eskom-controlled grid can, or will, accommodate. The danger for South Africa’s energy needs is that investors will stop supporting projects if they know that space on the grid might only be available in five or more years’ time.
“Projects will go into limbo mode just because the grid is not there. Which is very sad because the growth of our economy and our electricity market will slow down.”
She doesn’t know why the government is not attaching more urgency to grid capacity given the potential for disaster. “That’s the answer all the gurus are searching for and not finding.”
Certainly, the perception is that Eskom is both delaying the expansion of new grid capacity and blocking access to existing capacity to protect its monopoly and revenue. “From Saippa’s side we are trying to take hands with Eskom, trying to nullify this perception, because we want to believe that they are not blocking anyone.”
The association is waiting to see if Eskom applies energy regulator Nersa’s new grid access rules to its own renewable projects and not only to private sector projects. If it fails to, “that will then mean that they are actually blocking us, which we can’t prove at this point in time, and which I don’t think they are doing”.
Eskom can only expand grid capacity fast enough by collaborating with the private sector instead of seeing itself as “a one-man show that can do it on their own, because they can’t. They do not have enough resources and skills left in Eskom because everybody left. They’re in the private sector, and Eskom needs to utilise them.”
While Human says she doesn’t think Eskom is blocking competition, she notes it has not dropped its legal action to have private electricity trading licences issued by Nersa set aside, in spite of publicly stating its commitment to the reform process.
“Once again, something was said and something else was done. That is mostly the issue with Eskom. They say they’re going to do one thing, and then something else happens in real life.”
Business Times
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