No load shedding until 2029 – key report

A report from the National Transmission Company of South Africa (NTCSA), unbundled from Eskom in July, projects that the electricity system in South Africa is “adequate” and will remain this way if Eskom’s current strong plant performance is maintained.

This is a marked change from prior years when load shedding was all but guaranteed across all but the most optimistic scenarios.

It notes that Eskom’s generation turnaround, “through an intensified focus on recovering performance at the worst-performing stations, while sustaining performance at the stations that have shown reliable performance”, has brought an end to load shedding.

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Energy availability factor

From April to September, the first six months of the financial year, Eskom’s energy availability factor (EAF), a measure of available capacity, was 63% versus 55%, an improvement of eight percentage points. In actual percentage terms, the improvement is 15%.

For the calendar year, the EAF is averaging at 60%, still a marked improvement on the 54.69% for 2023. For the last 14 weeks, the EAF has been above 60% for all but three weeks (and for two of those, it was 59%). It has exceeded 65% for five weeks.

The Medium-Term System Adequacy Report, published each year, has constantly maintained that improving the EAF is “the single most effective lever to improve the system adequacy”.

It considered two EAF scenarios:

1. The first is “a moderately optimistic scenario called high EAF which represents a moderately optimistic recovery of EAF levels and is based on partial recovery initiatives. This scenario reflects an annual average EAF of 63% over the study period.
2. The second scenario is a low EAF scenario, which represents a position where recovery initiatives are unsuccessful in turning around the historical EAF trend. This scenario is aligned with the draft IRP 2023 and reflects an annual average EAF of 50% over the study period.

The base case sees Eskom relying on its open-cycle gas turbines (OCGTs) only in 2025, with either very minimal or no usage in the next four years.

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There is a caveat to the base case scenario: Two large coal generation units need to be added to the grid on schedule.

Following an explosion in August 2021, Medupi Unit 4 is expected to return to service by the end of March 2025. Additionally, Kusile Unit 6 (the final outstanding unit at the power station) is slated to achieve commercial operation in July 2025.

The NTCSA says “these are two big base load units with a big impact on the system, their delays will negatively impact the system, and hence it is important for system adequacy that they are not delayed”. Already, the Medupi date has slipped from August 2024 to March 2025.

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Coal shutdown

The report assumes that the shutdowns of old Eskom coal units, originally planned for the 2023 to 2030 window, are now pushed out to 2029 and that this won’t change.

It notes that “Eskom’s OCGT fleet will experience a reduction of 372MW in 2026 due to the shutdown of the Acacia and Port Rex plants”.

The coal shutdown sees a reduction in capacity of 5.3GW in 2029, with a further 2.6GW in 2030.

Eskom itself will add a total of 739MW of battery energy storage system (BESS) capacity in the next three years, with a further nearly 2 900MW of BESS, photovoltaic solar and wind capacity in 2028 and 2029.

However, the report cautions that much of this latter chunk is still “under consideration”.

It sees a more than doubling of capacity from projects in the Renewable Energy Independent Power Producer Programme, with these totalling 6 800MW (versus the 6 400MW now).

It also assumes that a 3 000MW gas project to be operated by an independent power producer, as per the IRP 2019, will produce 2 000MW by 2029.

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Several “utility-scale” renewable initiatives are being planned in the private sector (outside the government’s procurement programme). These amount to nearly 8 700MW of capacity, and the report assumes this will all be online by 2027.

It doesn’t factor in all this capacity into its forecasts. Rather, it “narrows the focus to those projects with a stronger probability of achieving commercial operation”. Under this risk-adjusted calculation, it sees 2.9GW of new capacity added next year. This will rise to a total of 9.1GW in 2029.

It highlights that “the scenario with all new additional capacity presents a new challenge in the form of excess energy on the system”.

What a problem to have …

This article was republished from Moneyweb. Read the original here.