Advisory council takes tough stance on woeful state of electricity system

SA’s electricity woes dominated discussions at President Cyril Ramaphosa’s meeting with the Presidential Economic Advisory Council (PEAC) on Wednesday.

Business Day understands some ministers came in for criticism over a lack of investment in infrastructure, delays in releasing bid windows and a lack of focus on transmission, which would allow new generation capacity onto the grid.

Eskom’s current transmission development plan, published in 2022, outlines the need for the installation of more than 14,000km of new high-voltage power lines by 2032. Over the past 10 years, it has built only 4,300km of transmission lines.

“Despite the progress made in putting in place fiscally, socially and environmentally sound economic policies, PEAC noted that significant challenges remain. In its assessment of the current economic environment, PEAC highlighted fiscal risks, the poor performance of state-owned enterprises, ongoing load-shedding, historical underinvestment in infrastructure, and rising levels of crime as the most urgent obstacles to growth,” the presidency said in a statement.

The PEAC is a nonstatutory and independent body chaired by Ramaphosa, which brings together prominent local and international economists and technical experts from academia, the private sector, labour, community, think-tanks and other constituencies.

“The president always challenges the members of PEAC to be as open and honest as possible, there are no holy cows with respect to what they advise on or in sharing their observations. There were different views on the IRP [Integrated Resource Plan], which is out for public comment and on the delays in closing some of the bid windows. The reality is, all along, the focus was on generation and not on transmission, which has created the kind of grid access issues we are resolving. On the electricity as a whole, there was robust engagement,” spokesperson Vincent Magwenya said.

After announcing the winning bidders in the first battery energy storage procurement round at the start of December, the department of mineral resources & energy has now opened the second round, calling for 615MW of storage capacity from eight facilities to be located near certain Eskom transmission substations in the northwest supply area.

The storage projects selected under bid window 1 will add about 500MW of capacity and are expected to reach commercial close by May 2024.

The department has said prospective bidders under any of these new bid windows should note the available grid capacity in the different areas of supply as indicated in Eskom’s 2025 Generation Connection Capacity Assessment.

This showed about 20,000MW of available generation connection capacity available across various provinces.

Most is in Mpumalanga, Gauteng, KwaZulu-Natal and Limpopo. There is no generation capacity available any more in the three Cape provinces — the most favourable areas for wind and solar power generation.

In bid window 6 of the Renewable Independent Power Producer Programme, the department issued a call for proposals for 5,200MW of renewable energy generation capacity but ended up procuring only about 1,000MW of solar power capacity and no wind power.

This was due to a lack of available grid access capacity to connect more projects in the Western Cape and Northern Cape, where most of the projects in the bids that were submitted would have been located.

omarjeeh@businesslive.co.za