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South Africa faces a far greater electricity shortfall than is commonly estimated

By admin
18 March 2015

A policy paper released by think-tank the IRR on Wednesday has found that South Africa faces a far greater electricity shortfall than is commonly estimated.

Eskom is still facing a massive 18 000MW power shortfall, says engineer Andrew Kenny in an analysis published in @Liberty, the policy bulletin of the IRR.

“If the economy grows at the inadequate rate of 3% of GDP a year, by 2030 we’ll need another 18 000MW, equivalent to four more Kusiles or eight more Koebergs.

“In the meantime, several of our existing coal stations – built in the 1970s with an expected 40-year life – are being run into the ground and will need to be replaced by 2030, if not before,” said Kenny.

He said the country's "precarious electricity supply is a national crisis which is crippling our economy".

In his analysis, which tracks the rise and fall of Eskom, Kenny said the ruling party seemed to think Eskom was “some kind of magic machine that would automatically make enough electricity”, even as it was diverted from its core function to meeting the government’s “transformation” goals.

Kenny said one of the contributors to the crisis was Eskom's electricity pricing. "Since 1994 Eskom’s electricity pricing has been all over the place, to an extent that borders on the insane."

He said at first Eskom kept prices much too low, because it was bowing to a political imperative to provide affordable energy for all – "a laudable objective, but one that is likely to be disastrous unless prices cover costs".

Kenny said this is one of the key reasons Eskom did not want to build new stations: the costs would necessarily have raised electricity prices.

"Even when they and Ingula (a pumped storage scheme) are fully on stream, we will still not have enough electricity to power even modest economic growth," said Kenny.

According to Kenny, there are no quick solutions to the crisis but there are “clear ways out of it”.

The five steps that are vital are:

* Eskom must be depoliticised and must resume its earlier function of providing sufficient, reliable electricity at a price that covers costs;

* Eskom’s transmission system must be taken from it and given to an ‘independent system and market operator’ (ISMO);

* anyone who wants must be able to generate and sell electricity into the grid on a strictly commercial basis;

* electricity distribution should be taken away from municipalities and given to private electrical engineering companies that would compete with one another on efficiency and cost; and

* energy sources for future electricity supply must be chosen on scientific and commercial grounds, in the best interests of mankind and the environment.

“Above all, Eskom must return to being what it was before, an independent engineering company whose sole duty is to provide reliable electricity and that appoints its managers, engineers and technicians purely on qualifications and experience, not skin colour or political affiliations,” said Kenny.

-Fin24