Koko revealed Eskom's expectations, saying its business plan anticipated peak demand to reach 40GW by 2026, compared with the 35GW peak demand it met this winter. Koko revealed Eskom's expectations, saying its business plan anticipated peak demand to reach 40GW by 2026, compared with the 35GW peak demand it met this winter.
Johannesburg - The trauma of load shedding is a thing of the past, Eskom’s group executive for generation, Matshela Koko, assured Parliament this week, but the risk will return by 2026 if the country fails to make a decision now on whether or not to build new nuclear power stations.
An updated Integrated Resource Plan (IRP) has been promised before the end of the year, and Energy Minister Tina Joemat-Pettersson said it was ready to be presented to the cabinet, but a meeting of the cabinet subcommittee scheduled for this week had been postponed.
That plan - the first official energy planning blueprint since 2010 - will finally place before the public the assumptions about economic growth and consequent demand for electricity, and the government's thinking on whether to go for nuclear.
But Koko revealed Eskom's expectations, saying its business plan anticipated peak demand to reach 40GW by 2026, compared with the 35GW peak demand it met this winter.
In other words, Eskom sees growth in peak demand of 5GW over the next 10 years, giving rise, in Koko’s view, to the need for an urgent decision on nuclear.
But Energy commentator Chris Yelland said no one could confidently predict future electricity demand because the economy was undergoing a profound structural change affecting energy intensity.
He referred to a graphic prepared by the Parliamentary Budget Office showing projected electricity demand as contained in the 2010 IRP, compared with the actual results in the intervening six years.
Since the global financial crisis of 2008, demand for electricity has been falling. Yelland said this was partly because primary industries such as smelting and deep-level gold mining were scaled back in the face of the slump in demand for commodities.
Not only had plants closed, but some heavy industries now reduced production or shut down completely during winter. These energy-intensive industries were being replaced by secondary industry, such as commerce and services, with lower-energy intensities, leading to an overall fall in demand relative to economic growth.
The question, said Yelland, was whether, if the supply constraints were removed, demand would return to the levels anticipated.
“It is very uncertain what the answer is and people are saying there’s this structural change, with the price of electricity three times higher, it’s not going to get back to that. Economic growth in South Africa may improve, but because of the change in the structure of the economy, electricity demand will certainly not get back on to the same trajectory,” Yelland said.
“There are other people that say, and this is a sort of self-fulfilling way of thinking, we have a growing population, we just have to have a growing economy.
“And maybe it's true, we just have to, but will we? We don't know.”
Added to this was the entry of disruptive technologies such as solar photovoltaics, whose price had been plummeting without an end in sight.
“The latest bid prices in Abu Dhabi, a couple of weeks ago for a major solar plant, utility scale, was coming in at 35c/kWh,” Yelland said.
This compared to prices in South Africa's last renewable energy bid window of 80c/kWh.
Under the country’s Renewable Energy Independent Power Producers Programme, projects are contracted for 20 years to supply electricity at the agreed price, adjusting for inflation, meaning it cannot fluctuate or increase as technologies reliant on fossil fuels like coal and gas do.
Yelland said whether at utility scale, or in the form of industries using solar PV to reduce their usage of grid-supplied electricity, or domestic users investing in solar to go off-grid, it could significantly alter the demand picture as prices continued to fall. Battery storage was another rapidly evolving technology which could affect future electricity demand.
But even if Eskom’s anticipated 5GW growth in demand materialises over the next 10 years, new build projects already in the pipeline would more than cover it, according to information contained in Joemat-Pettersson’s budget speeches and announcements on determinations she has made.
About 3 126MW of new gas-fired plants are planned for Richards Bay, Ngqura and domestic gas projects, about 7 000MW of renewables is expected to be added to the grid, she said, announcing winning bidders for 863MW of private coal generation this week.
The remainder of capacity from Medupi and Kusile, totalling 8 800MW, has yet to enter commercial operation, adding up to about 20GW, or four times Eskom’s predicted demand. “Will we have a surplus by 2025? Yes, we could,” Yelland said.
This makes Koko’s insistence on the need for an additional 9.6GW of nuclear generation capacity by 2030 seem at best an unnecessary, potentially very costly, risk at this stage.
Sunday Independent