New game plan proposed to end load shedding, as top researchers say Stage 8 looms & More Trending News

• If essential interventions should not made quickly, load shedding may get far worse with stage 6 or 8 within the foreseeable future, in accordance to economics and vitality consultancy Meridian
• It says authorities’s plans for brand new rounds of energy procurement may fail until key parts are reassessed, whereas the vitality availability issue of its vegetation will proceed to deteriorate. 
• Meridian has modelled a game plan to end load shedding that wants a number of gamers and a reshaping of current vitality plans. 

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Economics and vitality consultancy Meridian has modelled a game plan for the shortest route to end load shedding, however it’ll require that authorities take “unprecedented steps” to reshape current vitality plans.

The analysis fashions a number of eventualities for the facility system with the straightforward purpose of figuring out the shortest potential route to end load shedding. It warns that if authorities merely waits for the plans it has within the pipeline to come to fruition, there is a gigantic danger that load shedding will get a lot worse – reaching stage 6 or 8 within the foreseeable future – and can proceed indefinitely.

The examine rests on two essential evidence-based assumptions. The first is that the efficiency of Eskom’s coal vegetation, which now have an vitality availability issue of 56% continues to deteriorate. The researchers estimate, conservatively, that may lower by 2% a yr.

The second is that many of the tasks in each the procurement programmes that authorities has in play – the Risk Mitigation Independent Power Producer Procurement Programme (RMI4P) and bid window 5 of the Renewable Energy Independent Power Producer Programme (REIPPP) – will fail as they won’t attain monetary shut due to vastly altered world financial circumstances. 

Government is counting on these two procurement rounds to convey new vitality onto the grid within the subsequent two to 4 years, largely closing the provision hole. It can also be hopeful that Eskom’s coal plant will buck the pattern and enhance its efficiency to 70%. 

Grové Steyn, one of many report’s authors and member of the Presidential Economic Advisory Council, says:

The report proposes a mix of measures to procure extra renewable vitality, pace up procurement processes, and improve the possibilities of success and maximise the vitality accessible to the system from tasks which can be already underway. 

The plan must be pushed by a “power crisis implementation unit’ in the presidency.

The top four points propose that government revisit the procurement rounds that are live and improve on these as a first priority. As these are already underway and are large projects the most important thing is to do whatever it takes to make sure they succeed.

The problem is due to the fact that the contracting for the RMI4P and bid window 5 of the REIPPP were concluded at a time when global prices for hardware and capital were much lower than they are now. Since then, large escalations in commodity prices and logistics, resulting from the Covid-19 pandemic and the Russian invasion of Ukraine, has put many of the projects “beneath water”.

There is also a high risk that many of the gas projects in the RMI4P – which include the Karpowership projects – will be delayed or fail due to their excessive pricing, complexity and ongoing litigation. 

Local content conditions that projects use a required amount of locally manufactured parts have added increased costs, risks and delays. Locally constructed parts for solar panels, when available, cost between 18% and 30% more, says Meridian. This requirement should be lifted immediately for at least the next two years and pricing for both procurement rounds should be revisited urgently.

There is an additional aspect to the way that the RMI4P tender was designed, which the researchers say will lead to wasted energy that should rather be made available to the grid. Because of tender specifications, the RMI4P projects had to substantially overbuild capacity to meet dispatch requirements. The consequence will be that these projects will sit with battery-stored energy that most of the time they will not dispatch. The report proposes the Eskom system operator be given the ability to use the battery storage as needed. 

This will lead to a higher availability energy factor and cheaper overall cost to the energy from RMI4P projects.

When it comes to bid window 6 of the REIPPP, which was opened earlier this year for bids and closes in August, the intervention should be to massively increase its size and put strong incentives in place for early delivery of power. 

READ| Chris Yelland | We can end load shedding fast – but not if we rely on Eskom alone

Government should also commission more peaking capacity – such as diesel turbines that can be used to make up demand at peak times – build more battery storage and expand the agreements that it has with large users to cut their supply when the system is strained in return for incentives. 

Investment in the Eskom transmission grid to enable more capacity to connect the grid is imperative, says the report. The Just Energy Transition Partnership will be very important to this and to the general objective of establishing a lower carbon future. 

Several other points on the game plan call for a further easing of regulations embedded or self-generation projects, assistance to municipalities to procure their own energy from independent power producers and attention to bureaucracy and institutional strength of that National Energy Regulator of SA (Nersa) and the Independent Power Producer Procurement Office.

“Implementing these reforms would require political will at a scale that has not but been demonstrated in coping with South Africa’s energy disaster. In contemplating the choices open to South Africa we’ve got arrived on the conclusion that no different technique is probably going to have a greater probability of resolving load shedding quicker and with much less unintended penalties than one primarily based on the strategy adopted right here,” the report concludes.

Go to the Fin24 entrance web page.

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