Private sector to support additional power supply

27th June 2014

By: Mia Breytenbach

Creamer Media Deputy Editor: Features

  

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Although additional baseload power stations will be required to combat the shortage in the electricity supply industry in South Africa, the exact time at which the next new baseload power station will be commissioned, after the commissioning of the current new build projects, is extremely difficult to determine, says South African National Energy Association MD Brian Day.

“For this reason, smaller power plants should be envisaged with greater involvement from the private sector,” he emphasises, noting that the success of the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) indicates that the private sector should be more extensively included to support Eskom in providing additional power for the grid.

While the procurement programmes for cogeneration and baseload coal power supply are eagerly anticipated, greater flexibi- lity to allow private power projects and enable private power purchase agreements (PPAs), as well as for the National Energy Regulator of South Africa to provide generation licences, is crucial to fully unlocking the contribution the private sector can make, Day says.

“In addition, reform of South Africa’s electricity supply industry is crucial to enabling such private PPAs – this includes the Independent System and Market Operator Bill, whereby wheeling and generation licenses are act- ively facilitated, ” he says, explaining that competitive wheeling costs from the grid operator – Eskom – will allow private producers to sell to private buyers, and not only to Eskom.

Believing the electricity supply industry to be in crisis, Day says the tangible and intangible effects of the supply shortage are immense, causing serious constraints to economic activity and related growth, as well as to employment.

“New developments are constrained owing to a shortage of supply and uncertainty about the duration of this shortage, while price pressures are having a telling effect, with a resultant increase in a focus on energy efficiency,” he adds.

Additional baseload power stations could use coal or natural gas – should sufficient supply be confirmed locally – or power could be imported from gas power stations in neighbouring countries, but Day points out that there is a difficult trade-off to be made between the various fuel sources and their related costs and environmental impacts.
“Certainty on cost is imperative before we embark on programmes such as a nuclear programme, as cost and time overruns will be damaging,” he adds.

Nevertheless, Day emphasises the importance of the new build programmes – the Medupi power station project, in Limpopo, and the Kusile power station project, in Mpumalanga – noting that these programmes will make a significant contribution towards reducing the power shortage, thereby enabling economic growth and job creation.

“It will also [allow] the older power stations to undergo much-needed maintenance that has been delayed to ensure sufficient supply in the short term,” he adds.

Further, he emphasises the importance of the Ingula pumped-storage scheme – a hydroelectric power project loc- ated in the Little Drakensberg mountain range, on the border between the Free State and KwaZulu-Natal – asserting that the scheme is just as important as, if not more important than, Medupi and Kusile.
In the short term, the greatest electricity-supply crisis is evident during the evening peak hours, mainly in winter and to a lesser extent in summer, which can at least be partially avoided once Ingula is operational, he says.

However, Day highlights that there will also be times when there is not enough power available during nonpeak times to “charge” the Ingula system, reducing its impact.
“During the day, when consumption is lower, water is pumped with the massive electrical pumps to the upper dam from the lower dam. This water is then released when it is required, and the motors operate in reverse – as generators – to generate additional power,” he explains.

“This constraint is expected to deteriorate until sufficient units from Medupi and Kusile are commissioned,” he comments.

Nevertheless, he maintains that Ingula is also important as support for renewable-energy generation to counter the variability in the resource of renewable energy and, consequently, the variability in output from these plants, adding that, with the current low reserve margin, this support is crucially important.

Although Eskom has curtailed the sale of power to neighbouring countries, where possible, it currently imports 1 500 MW from the Cahora Bassa hydroelectric power scheme, in Mozambique, to sup- port the national grid, Day highlights.

In light of this, he stresses, regional development of power should become the focus.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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