South Africa’s electricity grid is dominated by coal. According to the Council for Scientific and Industrial Research (CSIR) in South Africa Utility Scale Electricity Generation Statistics in 2022 Reportthe contribution of coal fell below 80% for the first time.
In 2022, 77.7% of the 228 TWh was supplied by South African coal-fired power stations. South Africa’s coal-fired power stations will generate 176.6 TWh of electricity in 2022. Nuclear contributed 10.1 TWh (4.4%) for the third time in a row, while solar PV, wind and CSP outperformed nuclear with 15.9 TWh (7%). The remainder was captured by other sources, including diesel, hydro and pumped-storage plants.
The Koeberg plant in Cape Town is the only operational nuclear power plant in Africa (Egypt has begun construction of nuclear power plants and other countries are in various stages of exploration). It is a pressurized water reactor (PWR). According to Eskom, Koeberg has the largest turbine generators in the southern hemisphere and is the southernmost nuclear power station in the world. It has two 970 MW units giving an installed capacity of 1,940 MW.
South Africa has gradually added utility-scale wind, solar PV and concentrated solar power (CSP), increasing installed capacity from 467 MW in 2013 to 6,230 MW by the end of 2022. However, electricity production in South Africa is declining since 2011, from 250 TWh to 233 TWh in 2022. The average annual Energy Availability Factor (EAF) of Eskom plants decreased to 58.1% in 2022. In 2019 it was 66.9% and in 2018 it was 71.9%.
South Africa’s nominal installed capacity has increased from 53,673 MW in 2021 to 54,669 MW in 2022 thanks to new capacity of 720 MW coal, 419 MW wind and 75 MW solar PV that became operational in 2022. Below is a summary of the installed power capacity.
54 GW of nominal wholesale/public capacity consists of:
- Coal – 39.8 GW (raised)
- Nuclear — 1.9 GW (unchanged)
- Diesel (OCGT) – 3.4 GW (unchanged)
- Hydropower is 0.6 GW hydro and pumped storage – 2.7 GW (unchanged)
- Wind – 3.4 GW (unchanged)
- Solar PV — 2.3 GW (increased)
- CSP — 0.5 GW (unchanged)
The report from the CSIR shows that despite this increase in installed generation capacity, Eskom’s fleet Energy Availability Factor (EAF) continues to decline leading to record outage events in 2022, with specific concerns about UCLF (Unplanned Capability Loss Factor). In 2022 there were 3 773 hours of load shedding. This was the most intensive year of load shedding in South African history.
Load shedding in 2022 largely took place in phase 4. This was also the first year that phase 2 was not the dominant phase of load shedding implemented by Eskom since load shedding began. Eskom’s electricity rationing (load shedding program) is structured in “stages”, in which Eskom sheds a certain portion of the load from the grid to stabilize the grid. So, depending on the severity of the crisis, load shedding is implemented in phases from phase 1 to phase 8, where phase 1 takes 1,000 MW of load off the grid and in a phase 8 scenario Eskom takes 8,000 MW of load off the grid. . Load shedding is implemented on a rotational basis in 2-hour or 4-hour blocks, depending on the severity of the crises.
Distributed solar power and storage at scale in the commercial and industrial sectors can play a major role in addressing the shortfall. Stimulating and accelerating the penetration of solar systems on roofs and carports plus C&I energy storage systems can help to quickly bridge the generation gap. There is a huge opportunity in South Africa to leverage large roof and carport space on campuses across sectors to unlock generation capacity very quickly. In warehouses, schools, universities and farms, among others, PV installations can be placed that are capable of producing excess electricity that can be fed into the grid and “transported” for a reasonable fee to where demand is greater within the framework of corporate PPA programs. This could unlock a new revenue stream for the utility for its already existing transmission infrastructure and provide clean electricity for energy-intensive sites such as data centers, smelters, large factories and mines. This could be the fastest way to ramp up generation capacity, all with private sector investment in independent power plants, removing the financing burden from Eskom and the government.
South Africa’s C&I solar energy sector looks set to pick up speed as the government raised the threshold for South African companies to generate their own electricity without a license from 1MW to 100MW. In fact, the government has recently scrapped this upper limit altogether. Thanks to this progressive policy, 1,659 MW of decentralized sustainable energy was registered with the energy regulator in 2022. 38 projects were registered, including 14 projects above 50 MW. Most of this was recorded from the end of the second quarter. If you compare it to only 86 MW registered in 2021, the impact of such progressive policies is crystal clear.
The effects of load shedding on homes and businesses have been brutal, and the South African Reserve Bank says that during the higher stages of load shedding, where consumers can experience 12 hours of load shedding per day, South Africa can experience up to R900 million ($50 million) per day. Urgent solutions are needed to stop load shedding.
In an effort to ease the burden on homes and businesses, South Africa will introduce tax incentives for residential solar panels from March 1, 2022 and also add new incentives for businesses to use renewables. Individuals who pay income tax can claim a reduction on their tax debt. Individuals can claim a discount worth 25% of the cost of new and unused photovoltaic (PV) solar panels, up to a maximum of R15000 per person. From March 1, 2023, companies can reduce their taxable income by 125% of the cost of an investment in renewable energy. There will be no thresholds to the size of eligible projects, and the incentive will be available for two years to encourage short-term investment.
South Africa needs to work on all fronts. Strengthen Eskom’s fleet The Energy Availability Factor (EAF) should be supplemented by increasing the installation rate of utility-scale solar and wind energy, while prioritizing resolving grid constraints in certain areas to facilitate the integration of these variable renewables to ease. In addition, they should increase utility-scale battery storage and continue to drive growth in the C&I and residential solar sectors. These should all be areas to focus on at the same time.
All images from the CSIR report Statistics of Utility-Scale Power Generation In South Africa In 2022.
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