South Africa’s load shedding woes are a fading certainty as most power plants, with the exception of Tubatse, have attained close to perfect performance scores, with the next two months set as a turning point for stations including Kusile, Tutuka, Kriel and Matla, which are on the priority list for efficiency tests.
Eskom’s head of Generation, Bheki Nxumalo, credited by Electricity Minister Kgosientsho Ramokgopa as the pillar of new generation capacity in direct liaison with original equipment manufacturers (OEMs), said yesterday there were signs of excellent health at all power stations ahead of the looming winter season.
“You will see that in the next two months there will be a major review and we expect that to be a turning point for the plants,” Nxumalo said.
Ramokgopa said without undermining existing Public Finance Management Act (PFMA) requirements, Eskom sought to expedite procurement processes for required components that were not in the scheduled list of existing OEMs.
He said despite ongoing load shedding, efforts to improve the performance of the coal fleet were showing results, particularly at the six power stations being prioritised for intensive intervention.
“We can ill afford to have units out of service because of lacklustre procurement requirements. We must have the flexibility to procure parts or components that we need speedily with due consideration to the requirements of the PFMA. National Treasury has agreed in principle on this. We have to be careful that people with ill intentions do not then abuse this," Ramokgopa said.
“We have learnt important lessons from plants such as Medupi, which we have applied to Kusile. Plants including Majuba are showing good work, with only Tutuka and Kendal needing special attention.
He said anticipated changes to the Electricity Amendment Act would include the expediting of various regulatory licence requirements including environmental impact assessments, water use licences, procurement, grid connection, and other previous stumbling blocks to generation capacity upgrades.
He said the amendments would lower electricity prices by introducing competition and multiple players, while Eskom would still retain its position as the dominant player.
“Buyers will procure from the one with the least cost whose tariffs are lowest. The net effect is that over time, as the market matures and becomes robust, you will see a reduction of electricity prices,” Ramokgopa said.
He said the newly established National Transmission Company of South Africa (NTCSA) was off to a flying start with the about 120 independent power producers (IPPs) having signed off-take agreements to sell electricity to Eskom.
Ramokgopa said Eskom was considering lifting the current 1 000 megawatt allocation set aside for its Standard Offer Programme to 4 000MW and extending the scheme beyond its initial three-year time horizon.
Through the Standard Offer Programme, Eskom can buy power from existing producers, mostly industrial groups, at a set price calculated based on the avoided cost of its own generation, including long-term purchases from independent power producers.
The scheme includes an option for a static price, which is established each year based on the regulatory approved cost recovery and covers the variable cost of generation, as well as a dynamic price option, whereby the price is set the day ahead for each hour of the following day.
Ramokgopa said the enlargement and extension of the programme was motivated by the fact that there had been an “oversubscription” in interest, even though the full 1 000MW had not yet been contracted.
He said Eskom Generation, which was being separated from the transmission and distribution businesses, was gearing up to build a gas-to-power plant in Richards Bay in line with a 3 000MW ministerial determination received, with the regulator’s concurrence.
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