Alarm bells ringing at Eskom
Embattled power utility Eskom has revised its energy outlook for the next year, showing red across the board.
The group’s latest Generation Adequacy Report provides an outlook for energy supply over the next 52 weeks, including the risk of shortages over the period.
The forecast covers demand versus the available generating capacity for each week and is colour coded to indicate what the utility expects – this goes from green (no shortage) to red (worst case).
Unfortunately for South Africa, the group’s outlook is red across the board.
The latest outlook differs greatly from previous reports, in that the unplanned outage assumption has been pushed higher to 15,000MW (from 13,000MW before), while the planned risk level and likely risk scenarios have also been pushed higher – to 17,200MW and 18,700MW, respectively – indicating a deterioration in the situation.
Under the previous assumptions, if Eskom was able to keep outages below 13,000MW, the country would not be experiencing load shedding at all. With outages at 16,000MW or above, Eskom projected that load shedding would be at stage 4 load shedding for most of the year.
In reality, Eskom has struggled to keep unplanned outages below the 16,000MW level; hence the elevated levels of load shedding for much of the year so far.
According to the Bureau for Economic Research (BER), load-shedding returned to sustained higher stages last week, with sudden, unannounced escalations likely aggravating the extent of the disruptions associated with power cuts.
Load shedding is destroying the South African economy. All major banks, including the SARB, as well as analysts and ratings firms have flagged load shedding as the main cause for downward revisions of South Africa’s growth prospects for this year – just a hair away from causing a full-year recession.
The South African Reserve Bank has revised its growth projections to just 0.2%, with the bank estimating 250 days of load shedding this year. Eskom’s outlook is far bleaker than that.
On top of the sea of red, Eskom’s projections on its Energy Availability Factor (EAF) is also missing the targets set up by its board.
Board chairman Mpho Makwana told the nation in January that the group would restore its Energy Availability Factor to 60% by the end of March. This did not happen.
According to Eskom’s latest projections, the group will barely scrape past 55% by the end of the year, and will likely average 53% for 2023 – down from the average of 58% in 2022.
The EAF is a critical aspect of determining the amount of load shedding South Africans can expect.
Analysis in March from Virtual Energy and Power director Clyde Mallinson showed that South Africans are in store for a cold, dark winter, warning that Eskom must lift the coal fleet’s capacity factor (CF) to at least 50% to prevent high levels of load-shedding over the winter months.
If the power utility is unable to do so, the country will likely see upwards of stage 6 load shedding during peak winter in June.
The analyst pointed out that Eskom’s coal fleet managed to only operate at 40% CF in February – if this was the same in June, load shedding would have to be pushed up to stage 11, a level that does not yet exist on the available schedules.
June is a critical month, as it is deep winter where demand on the grid is usually at its highest. Energy experts have been warning for months that if the country’s power situation does not improve by then, the country is likely to be thrown into much deeper stages of load shedding.
Previously, Eskom expressed some confidence in being able to mitigate the peak winter demand by returning more power stations to service from planned maintenance – but the group was also banking on having Koeberg unit 1 – which can cover around 1 stage of load shedding – back in service.
However, this is not to be. Due to delays in getting Koeberg’s maintenance started in December 2022, the unit is already behind schedule, with the latest estimate that it will only be back online in September 2023.
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