Eskom: Finger on the trigger

2014-03-09 14:01

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Eskom’s big red panic button is getting worn from overuse and big business says it simply cannot go on like this.

This week’s emergency was the fourth since November, affecting big industrial users, and there is every reason to expect far more of these power crunches in the coming months.

Since the catastrophic collapse of the power system in 2008, Eskom created several layers of emergency measures to cut electricity demand dramatically when needed.

These include temporarily interrupting the supply to BHP Billiton’s power-guzzling aluminium smelters in

Richards Bay and Mozambique, cutting almost half of power exports and making big users cut 10% of their use at two hours’ notice. Only when all of this fails to cut demand ­below supply does Eskom declare a “level three” emergency and start generalised load shedding the way it did on Thursday.

But the “levers” at Eskom’s disposal are disappearing, according to Shaun Nel of the Energy Intensive Users’ Group, a lobby representing the corporate users of about half of Eskom’s power.

Eskom has already lost one of its panic buttons.

The National Energy Regulator of SA last year forced Eskom to stop its programme of “buy-backs” – paying smelters not to use power.

This time last year, Eskom was managing to reduce demand by an extra 1?000 megawatts using this scheme. According to Nel, the buy-backs made sense because at 80c per kilowatt-hour it was cheaper than running the diesel generators that are currently keeping the lights on.

Nel says the whole system of emergency demand cuts needs a “rethink”.

It was designed in its current form at the end of 2012 to “equitably share” the burden of load shedding but no longer does that.

Eskom also asks big users for voluntary cutbacks from time to time, which they often give, he says.

“Voluntary cuts cannot be the standard.”

It is being used as a matter of course now, meaning it’s no longer being kept in reserve for when a true catastrophe like Thursday’s arrives, according to him.

The less visible “level one” emergencies Eskom has been declaring are already a huge problem for businesses, although they don’t necessarily stall the economy.

At 10% you can shift things around, but at 20% many operations like mines in effect simply have to shut down, says Nel.

The fundamental problem is the escalation of unplanned outages in Eskom’s aging fleet of power stations.

Back in 2012, the “allowance” for these unforeseen shutdowns was between 3?600MW and 4?500MW.

Now, that allowance is 6?500MW.

But on Thursday, Eskom had almost 10?000MW of unplanned outages. By Friday afternoon, that was still at 7?800MW.

The power stations are literally falling apart.

The system should be delivering at 90% capacity, according to Nel. These days South Africa is “happy for” 80%.

“It is unbelievable,” he says.

Eskom has now issued new predictions for the coming months, saying the system will be within a hair’s breadth of another emergency a number of times over the next three weeks.

Business Unity SA (Busa) also sent out an angry statement this week saying it will seek political intervention via the ministers of public enterprises and energy.

Load shedding affecting everyone is preferable to continually asking big business to cut 10% on short notice, Busa argues.

“There is supposed to be an official medium-term

response plan?...?but it seems to have disappeared off the radar,” says Busa policy adviser Raymond Parsons.

“Busa would like to know what has happened to it.”

Busa also want the whole emergency protocol rearranged to take the burden off big business. “If further load shedding is inevitable, it is nevertheless better that energy saving be spread over the whole nation,” it said.

Eskom’s emergency protocols

Eskom can cut more than 6?000MW of demand by declaring a “level three” emergency.

Cutting aluminium smelters’ supply – 2?000MW

Cutting exports – 800MW

Emergency 10% reduction from big users – 1?300MW

“Level three” emergency 20% reduction from big users and municipalities – 4?000MW

Eskom leadership

Hunt for CEO is ongoing

Friday’s briefing on the power emergency was most likely Eskom CEO Brian Dames’ last public appearance before he retires at the end of the month.

The early stage of the search underscores the fact that Dames’ resignation, announced early in December for “personal reasons”, was entirely unexpected.

According to chairman Zola Tsotsi, the parastatal does not even have a short list of possible replacements.

An executive search company had been contracted and Eskom still had to “receive interest from members of the public” and advertise the position, he said on Friday.

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