We will fight Eskom up to the Constitutional Court – IPPs

The position Eskom is taking by trying to stop the optimal use of power self-generation in the town of Frankfort in the Free State is typical of the ANC government’s centralist approach – and independent power producers (IPPs) will fight it, even if it requires going to the Constitutional Court.

This was the message from the South African Independent Power Producers Association (Saippa) on Tuesday following an on-site meeting with Rural Maintenance, the private company contracted by the Mafube Local Municipality to manage electricity distribution in its area of jurisdiction.

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Saippa chair Tommy Garner says if Eskom’s argument prevails, all investment in independent power projects by the private sector and municipalities will dry up – because the plants will not be allowed to run economically.

Rural Maintenance approached the High Court in Johannesburg with an urgent application to allow it to retain control over the implementation of load shedding in the municipal area pending the resolution of a dispute with Eskom. The application was heard last Wednesday (5 April).

Eskom opposed the application, and judgment was reserved.

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Moneyweb previously reported that Rural Maintenance, together with 20 other shareholders, developed four solar farms in the area to supplement the Eskom power supply and facilitate economic growth, because Eskom is unable to increase its supply to Mafube.

While waiting for land use approvals for the development of agri-villages where local produce will be beneficiated, the solar energy is used to supplement Eskom supply in Frankfort.

Rural Maintenance has also taken over control of the area’s load shedding from Eskom, fine-tuning it to mitigate the impact on businesses and households.

By deploying the solar power throughout the day, it reduces the cost of supply since the price of the solar energy beats that of Eskom. It also spares households load shedding during the day whenever the volume of solar exceeds the amount it is required to shed.

This of course also displaces Eskom sales to Mafube.

Rural Maintenance is planning to extend this system to other towns in the municipality, including Villiers and Tweeling – and later to Cornelia, where it must first build a new distribution line.

Eskom is however unhappy and has been threatening to take back control of the load shedding.

It requires Rural Maintenance to switch off part of its solar units and only deploy them during load shedding.

Eskom’s response

In court papers Valentine Ndhlela, a senior manager in Eskom’s sales and customer service department, complains that Rural Maintenance uses “renewable energy generated and embedded in the distribution grid … to offset the amount of load required to be shed”.

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He says the amount to be shed is based on the municipality’s normal load profile – the average load. This, he says, takes into account the additional generation capacity that is embedded in the distribution network.

According to Ndhlela, the way Rural Maintenance is using solar energy to offset the amount of load shedding required does not alleviate the system constraints on the national grid and thereby undermines the purpose of load shedding.

He argues that this jeopardises grid stability.

“If granted, large numbers of customers will claim entitlement to similar relief and Eskom’s ability to effectively manage the grid will therefore be severely compromised,” says Ndhlela.

Power and control

Eskom has effectively rerated Mafube’s baseline from which the reduction during load shedding must be achieved by deducting the alternative supply from its previous baseline.

The power utility has thereby nullified the municipality’s ability to mitigate load shedding while using alternative sources of energy continuously.

Garner says hundreds of projects countrywide are aimed at doing exactly what Rural Maintenance is trying to achieve. Such projects must sell energy to be financially viable, and that will be impossible if used only during load shedding.

He says Eskom is hiding behind the regulatory framework that is designed to protect its monopoly.

“The problem is that neither Eskom nor [electricity regulator] Nersa ever really sat down and thought about a liberated electricity market.

“Their thinking is framed by emergency response, which is the context within which the current regulations have been developed. They are not looking at how to deregulate the electricity supply industry to make IPPs part of the industry.”

Garner says the industry is not surprised by Eskom’s position.

“This may be the last push to retain control and is in line with Minister of Electricity Kgosientsho Ramokgopa’s centralist move back to the use of old coal power stations.”

He asks how Eskom can be allowed to prevent IPPs from exercising their constitutional rights while failing to execute its own constitutional mandate.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.

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