The big solar problem emerging in South Africa

 ·4 Jan 2024

While private solar boomed in South Africa in 2023, the rapid growth has had an impact on peak and demand spikes – which presents a challenge for Eskom as it struggles to meet demand through its ailing power stations.

According to independent energy analyst Pieter Jordaan, Eskom and South Africa as a whole will need to rethink how they use and store energy to address this emerging issue.

Put simply, the growth of private solar means that demand patterns have shifted significantly:

While there has always been a peak in the morning and the evening as people leave or return home, because solar is largely ineffective without sunlight (and battery backups), the grid faces a surge of demand when the sun goes down.

This has become apparent in the way Eskom’s load shedding has been scheduled for the past year, with lower stages during the day and more intense outages in the evening and overnight.

The problem is that when this surge of demand hits, the utility simply doesn’t have the necessary generation capacity to meet it – and it turns to peaking (ie, diesel generators) as a backup.

Peaking is not intended to be baseload generation and comes at a significant cost.

Year-end data from Eskom, compiled by Jordaan, shows that peaking was the second biggest source of power generation in 2023 (6,800MW), just ahead of renewables (6,200MW).

2023 proved to be a landmark year for renewable energy in South Africa, with full-year data from Eskom showing that renewables now make up approximately 11% of its generation sources.

Due to the consistent decline in Eskom’s coal-generating fleet, renewables have slowly started picking up the slack – but it has not been enough to keep up with the growing energy supply gap (hence the record levels of load shedding experienced over the past year).

Notably, the data recorded by Eskom only shows its own energy supplies and doesn’t account for private solar.

According to the Department of Public Enterprises, by the end of August, solar panels capable of generating 4,481 megawatts had been installed in terms of private embedded generation – 2,500 megawatts more than in 2022.

This has gone a long way in cutting demand on Eskom’s grid – but not without consequence.

Big costs – and problems ahead

Despite the growth of renewables, South Africa still suffered a massive supply gap in 2023, which forced Eskom to turn to peaking to keep the lights on.

Peaking sources are only supposed to be tapped when exceptional demand is placed on the grid, forcing the power utility to find emergency sources of generation to meet demand. The most commonly used peaking sources are pumped hydropower and open-cycle gas turbines (OCGTs).

Given Eskom’s inability to meet demand for most of the year, peaking sources were used extensively throughout 2023, carrying huge costs – particularly with OCGTs.

According to Jordaan, while OCGT use in December 2023 was lower than in December 2022, the data shows that Eskom’s reliance on diesel generators for the year overall was much higher than in previous years.

Not only does the use of OCGTs cost Eskom billions of rands every year – adding to the financial pressures on the company and, by extension, National Treasury – it is still not enough to meet demand.

As a result, the South African economy continued to rack up more losses and costs associated with load shedding and the yawning power supply gap.

According to Jordaan’s calculations, based on the assumption that the country suffers an economic loss of R11 for every kWh of unmet demand, South Africa lost an estimated R184 billion (or 2.7% of GDP) to the supply gap.

“The power supply gap has markedly slowed the South African economy over the past five years. However, the gap in 2023 surpassed the previous four years combined, by 29%,” he said.

While the private solar boom has mitigated some of this impact – as it initially provided some unexpected
economic growth and subsequently started to dampen utility demand – this hasn’t come without its own problems, he said.

“There are two risks attached to this phenomenon. Firstly, the base effect will, in 2024, recover some of the economic upswing.

“Secondly, the solar solutions have exacerbated – and escalating with subsequent installations – the peak and demand spikes during severe weather events.

“Renewable power will require a rethink of how we use and store energy,” he said.

Read: Eskom jumps the gun

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