Eskom is shooting itself in the foot

 ·5 Jul 2023

The Democratic Alliance (DA) says it will call on the National Energy Regulator of South Africa (Nersa) to review and set aside proposed regulations relating to private connections to the national grid.

Eskom has proposed new rules to allocate access to the national electricity grid with the goal of providing equal access to independent power producers.

Under the rules, renewable electricity producers are required to follow several additional compliance steps, including environmental and water usage rights, purchase agreements and a minimum of a year’s data on the availability of sun or two years on the availability of wind.

The new rules have, however, faced backlash from business and political parties. The DA said that the proposed grid regulations would lead to disinvestment in the energy sector by Independent Power Producers (IPP) at a time when the country is faced with an electricity crisis.

“What Eskom is doing now, through these proposed grid regulations, is essentially anti-competitive behaviour. It is leveraging its monopoly to create barriers to entry in the energy market for IPPs,” the DA said.

The political party said that Eskom had not done any sort of economic impact assessment to qualify the impact the new rules will have on the energy sector.

Eskom is increasing the investment risk premium by asking IPPs to spend more on power generation projects with no guarantee they would obtain grid access.

“It is a shot in the foot that will reverse all the gains that have been made thus far to increase the proportion of independent power generation to the energy mix,” the DA said.

“Instead of playing gatekeeper to the electricity grid, arbitrarily deciding who should or who shouldn’t be connected, Eskom should instead be expending its energy on encouraging grid investment by the private sector,” said the political party.

Eskom also plans to update and improve its existing grid system.

In broad terms, Eskom’s new approach to the grid seeks to tap into the private sector’s liquidity; however, it does not wish to relinquish ownership of the national grid. The power utility said that it should be solely in control of the national grid.

Underdeveloped grid systems have stalled the uptick in renewable energy projects, with overloading of the grid becoming a big risk of a national blackout.

Electricity minister Kgosientsho Ramokgopa recently said that adding too much renewable energy to the grid at once could cause a grid collapse.

Professor Sampson Mamphweli, the head of the energy secretariat at the National Energy Development Institute, said that grid capacity is like a water pipeline that can carry a certain amount of water.

“If you try to push more water than it can carry, it essentially bursts,” he said. As a result of this, the country needs to strengthen its grid capacity.

The claim has been disputed by energy experts.

Rein Henkeman, Managing Director of Alumo Energy, said the minister’s concerns about abruptly adding a significant amount of solar generation into the grid are unfounded.

“The process will more likely follow a staggered implementation approach over multiple years,” he said.

“Large-scale solar projects require months to construct, and the planning, and permit application and allocation phases can take up to three to five years to complete. As a result, the national grid won’t experience a sudden surge of solar energy for several more years, at the very least. This should give the utility ample time to enhance its infrastructure to be ready for solar.”

Henkeman said the main issue is rather that Eskom’s current generation equipment is not designed to handle sudden fluctuations in the transmission network.

“For example, if a solar unit produces one megawatt of electricity and there is a sudden drop in solar production for any reason, the utility’s generation equipment must account for that drop – which it is not designed to do. In other words, the problem does not lie with solar, but rather with our electrical infrastructure, which requires an urgent update.”

Read: Eskom vs Tshwane showdown coming this month

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