Boom and bust: A woman carries firewood on her head as she walks below Eskom’s electricity pylons in Soweto. Picture: Reuters
Boom and bust: A woman carries firewood on her head as she walks below Eskom’s electricity pylons in Soweto. Picture: Reuters

One way of thinking about SA’s base load electricity system is to ask: if the electricity system had to be rebuilt from scratch with what we know now, would it look similar to the one we have?

The answer is no. Around the world, base load utilities and the fossil fuel extractive industries that supply them risk becoming stranded assets.

As the price of renewable electricity generation falls below the price of coal-fired power, renewables have moved from the fringes to the mainstream. At the same time, opposition to renewables has moved from an argument that they are too expensive to one fixated on the variable nature of the generation profiles of wind and solar photovoltaic electricity.

This issue of "variability" speaks to the often-questioned ability of renewables to provide electricity when the sun is not shining or the wind is not blowing on a continual basis throughout the day. Traditionally, this capability is thought only possible with what is referred to as base load power — generated by large, inflexible generators that run, roughly, at a constant
energy output when they are fully operational.

In SA, the opposition to renewables is increasingly led by Eskom. To understand this, an understanding of Eskom’s operating model is required. It operates a vertically integrated monopoly at generation and grid transmission levels. Eskom’s model is highly centralised, based primarily on a small number of very large coal-fired generators near, and on, the coal fields in northeast SA, which deliver electricity over a vast countrywide transmission grid.

In contrast, systems based on renewable energy operate best in a decentralised system where many much smaller generation units are spread throughout the country and are closer to where they are required. This means that renewable energy not only presents a threat to Eskom’s generators as renewable energy gets cheaper, but challenges the very basis of the state utility’s operating model.

There are many technical and economic inefficiencies inherent in SA’s legacy base load system, including losses caused by transmitting electricity over vast distances; the inflexibility of base load generators, which are unable to efficiently follow variable demand by ramping generation up or down as demand requires; pollution, which requires costly remediation; and exorbitant water use.

For base load plants such as Eskom’s, an overinvestment in generating capacity is required to compensate for the losses occasioned from the large transmission distances. Since base load plants cannot ramp up and down to suitably meet demand, Eskom’s base load plants generate more
electricity than they can sell in off-peak times.

The other problem with the inflexibility of base load is something that most South Africans have direct experience of: load-shedding. It is difficult to compensate for large centralised base load generators when removed from the system. As generators reach the end of their life span, their reliability declines. When these unreliable generators suffer "unplanned outages", which other capacity cannot compensate for, the result is load-shedding. These power cuts cause immense harm to the economy directly and in terms of investor confidence. They force further wasteful investments in standby generators for enterprises that cannot sustain an unreliable supply of electricity.

Inflexibility by virtue of scale is another problem. Mega project base load generators not only experience cost and time overruns when they are being built, but when they are finally complete their capacity is often unable to be fully absorbed.

SA’s mega power stations, such as Medupi and Kusile, have typically taken about 10 years to build (and are still not complete) and it is impossible to know whether in a decade they will be needed — particularly as planners often overestimate demand, resulting in significant overcapacity at certain periods, and idle plants.

Typically, overcorrection and shortages follow the oversupply; boom and bust, with huge costs to the economy. This is what happened to the old Escom, Eskom’s forerunner.

Having splurged on huge base load coal-fired power stations, Escom had to mothball many of them, with some returning to service again only in the mid-2000s.

In an effort to use this excess capacity, Escom entered into ruinous long-term deals to supply electricity to aluminium smelters. Eskom again has surplus capacity and is looking to enter into special deals with energy-intensive customers to get rid of it.

The variable nature of renewables presents a different sort of challenge. However, variability is not the same as unpredictability.

Forecasting allows a high degree of certainty of how much electricity variable renewables sources will generate. The introduction of more individual renewable generators increases their collective predictability.

In the medium term, the Council for Scientific and Industrial Research has shown that a combination of solar photovoltaic and wind, supplemented by gas (or storage), can provide continuous supply to match demand at much lower costs than coal.

In the longer term, the value proposition presented by renewables is even stronger as prices are decreasing rapidly.

Eskom presents the need for coal-fired or nuclear base load as a technical given.

These options are more costly and carry huge risks, which include time and cost overruns and very costly oversupply when they eventually become operational.

Instead of repeating the past, we have superior options for the type of electricity system we want for SA now and for the future.

The idea of a need for a "base load solution" from coal or nuclear is wholly outdated.

• De Vos is director of QED Solutions and Löser is an attorney at the Centre for Environmental Rights

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