The national average price of electricity is now above the levelised cost of renewable generation resources which range between R/kWh 0.5 and 0.6 for solar PV and wind utility scale power plants in the REIPPP programmes.
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Banele Ginidza
Rotational load shedding cost the South African economy about R2.8 trillion in 2023 as the country experienced the highest and intensified bouts of power cuts than any other year.
However, the economy recovered in 2024 as the country experienced more than 300 consecutive days without load shedding as no power cuts materialised between April and December 2024.
This was said by the Council for Scientific and Industrial Research (CSIR) on Monday in its utility-scale power generation statistics report covering January to December of 2024.
The CSIR report also noted that the national average price of electricity increased by 12.74% this year to reach ~ c/kWh 195, which is much higher than the cost of the latest variable generation resources that ranged between c/kWh 50 and 60 for solar photovoltaic (PV) and wind.
As a result, the national average price of electricity is now above the levelised cost of renewable generation resources, which ranges between R/kWh 0.5 and 0.6 for solar PV and wind utility scale power plants in the Renewable Energy Independent Power Producer Procurement (REIPPP) programme.
At a media briefing, CSIR head of the energy centre, Dr Thabo Hlalele, noted that the national average price of electricity increased annually by an average of about 11% over the last 10 years compared to the annual average inflation rate of about 5%.
The study compared Eskom's aggregated generation resources for 2024, including coal, nuclear, hydro, pumped storage, open cycle gas turbine, REIPPP, solar PV, wind and concentrated solar power with their installed capacities and energy production outputs from January to December 2024 to assess their impact on load shedding.
This iteration also examined national average electricity tariff increases and compared it to the tariff in other countries. The National Energy Regulator of South Africa (Nersa) proposed electricity tariff increase of 12.74% is above the expected inflation of 4.4% for 2024.
"The national average price of electricity is now above the levelised cost of renewable generation resources which range between R/kWh 0.5 and 0.6 for solar PV and wind utility scale power plants in the REIPPP programmes," it noted.
Hlalele said that the average national electricity tariff has increased by 190% since 2014, which was higher than inflation and may impact affordability while Eskom’s aggregated tariffs increased by 190% since 2014, which was much higher than the average annual inflation rate of 5.2% over the same period.
Electricity prices are already above utility-scale solar PV (levelized cost of energy) of R/kWh 0.5 and the proposed Nersa tariff increase of 12.74% pushes the average tariff to c/kWh 195.93, the report noted.
The reported also said private sector embedded solar PV generation of 5.8GW generated about 2.3TWh in the first three months of 2024 where the country had load shedding and contributed to minimising the power cuts.
"We do see some indicators there and there in terms of the residual that continues to decline and that could largely be because of the rooftops solar and embedded generation that we are seeing across the country be they be bilateral between IPP and the energy supplier," Hlalele said.
"To that extent that continues to be indicated by the volumes that continue to decline while we are not quantifying the actual extent towards the rooftop solar as well as the other embedded generation are lookinglike at the moment."
The report noted that renewable energy generation from the REIPPP programme has grown by 723% since 2014 though the energy generated last year was marginally lower compared to 2023.
Hlalele noted that in a decade growth, more than 300% of total renewable energy installed capacity under the REIPPPP from January 2014 to June 2024 had in total produced 3 443MW of wind, 2 287MW of large-scale solar PV and 500MW of CSP became operational in South Africa.
No additional capacity in 2024 compared to 2023. Diesel and gas utilisation reduced by almost 6% in 2024 compared to 2023 due to improvements in coal capacity factor.
According to the report, Eskom's annual average Energy Available Factor (EAF) gradually increased to 60%, compared to an average of 55% in 2023, driven by an improved unplanned plant failure rate and relatively higher planned maintenance undertaken in 2024.
The demand for Eskom's electricity decreased by an average of 3% this year due to increased private sector generation capacity uptake.
Consequently, a combination of lower electricity demand and a gradual increase in Eskom's EAF helped to reduce the utilisation of diesel generators to an average of 6% in 2024, compared to 12% in 2023, and eliminated load shedding from April 2024 onwards.
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