Acting head of generation Andrew Etzinger said the power grid might be put under pressure as customers’ demands increased, but the utility was in a good position to meet the needs.
The new tariffs are expected to start on July 1, leading to a lower usage by the industry.
“We’ve done a lot of maintenance work over the past few months and are still continuing. Our coal and diesel stock levels are healthy. The system is stable, so we don’t foresee any load shedding. Normally in winter the peak period for demand is between 5pm and 9pm - but we don’t think it will lead to rolling load-shedding,” Etzinger said.
In April, Eskom made a commitment, as part of its winter plan, to avoid load shedding or at least limiting it to Stage 1 during the approaching colder months, while it also shared information on what had been achieved in trying to boost its performance.
Chief operating officer Jan Oberholzer said work on the new power stations, Kusile and Medupi, continue and for the first time one of Kusile’s units has successfully synchronised to the national grid.
But Professor Anton Eberhard from UCT’s Graduate School of Business said it would take time and serious resources to fix Eskom.
“The problems are severe. They can be fixed. Governance is improving. Now they have to rebuild capabilities and skills that were hollowed out during the state capture years,” he said.
While the technical challenges were significant, Eskom’s financial woes were even more serious.
“The National Energy Regulator of South Africa tariffs and government bailout are insufficient to restore financial sustainability. Government will have to do more on debt relief and certain financial restructuring options are at an advanced stage of consideration.
“There is also the possibility of lowering Eskom’s cost of debt through arranging a large blended finance facility which includes some climate-related funding linked to accelerated closure of some of the old expensive dirty coal power stations.”
He said Eskom was not in a position to build new power generation capacity beyond its commitments at Medupi and Kusile.
“It does not have the balance sheet to raise more debt to finance more plants. But customers are prepared to invest, as is the private sector, and it is straightforward to free up this market.”
Eberhard said some interventions that could be made would be the launching of the next round of Renewable Energy Independent Power Producer Procurement Programme(Reipppp) by Energy Minister Jeff Radebe.
“Prices have fallen so rapidly that we are likely to see bids well below 50 cents per kilowatt compared to Eskom’s average selling price of 102c/kWh. This procurement could be done within existing ministerial determinations for new generation capacity. But it would be good to also gazette an updated intergrated resource plan so clarity is provided on future electricity generation requirements,” he added.
On small-scale generation, a huge backlog of applications for licensing and registration existed which, according to Eberhard, could be cleared “at the stroke of a pen”.
For instance, Radebe could gazette new Schedule 2 regulations under the Electricity Regulation Act exempting generation plants under 10megawatts and getting the regulator to simplify and accelerate registration procedures.
“This would unleash innovation and investment in many hundreds, perhaps even thousands, of small-scale distributed electricity generation plants and significantly alleviate pressure on Eskom and the grid,” according to Eberhard.
South Africa was a leader in renewable energy but has now fallen behind after Eskom blocked the signing of the previous Reipppp for two years.
“But we could turn this around in a very short time. South Africans are becoming impatient at the inexplicable delays,” Eberhard said.