South Africa\u2019s newly appointed electricity minister warned that record electricity outages could get even worse and said the state power utility\u2019s performance targets need to be reviewed to determine whether they are appropriate.<\/p>\n
\u201cAll indications are that it is going to be difficult\u201d as electricity demand increases going into winter and the dire energy situation could deteriorate further, Kgosientsho Ramokgopa said in an interview at Bloomberg\u2019s Johannesburg office on Friday.<\/p>\n
\u201cWe need to set explicit targets\u201d and those must be met to provide confidence to business, the markets and households that the crisis is being addressed, he said.<\/p>\n
Africa\u2019s most-industrialized nation has been subjected to rolling blackouts every day this year as Eskom Holdings SOC Ltd., the state company that supplies about 90% of the nation\u2019s electricity, fails to meet demand from its dilapidated plants.<\/p>\n
President Cyril Ramaphosa this month named Ramokgopa as electricity minister, a new position in the presidency, and tasked him with reducing outages, improving Eskom\u2019s plant performance and accelerating the procurement of additional generation capacity.<\/p>\n
\u201cI see myself as a portfolio manager addressing the multiplicity of programs\u201d that have been instituted to improve the power supply, Ramokgopa said. \u201cThere\u2019s no minister who has done that.\u201d<\/p>\n
Ramokgopa will visit power stations and meet with business representatives to determine firsthand how much-unutilized generation capacity can be connected to the grid and how quickly \u2014 an assessment that should take about four weeks. Thereafter, he intends to release a detailed plan spelling out how much additional power will be brought online and over what timespan.<\/p>\n
Eskom\u2019s performance has deteriorated to the point where less than half of its capacity has been regularly available. Mpho Makwana, the utility\u2019s chairman, on Thursday commended its staff after six of its plants registered an energy availability factor of 70% for the first time since May.<\/p>\n
\u201cThe problem with that is just today we could be told the same ones are now down to 40%,\u201d Ramokgopa said. \u201cThe fact that a monopoly issues a statement to celebrate\u201d such a performance is \u201cjust an illustration of the crisis,\u201d he said.<\/p>\n
The central bank estimates that outages, which have been instituted since 2008, will shave 2 percentage points off growth this year. The blackouts have dented support for the governing African National Congress, with opinion polls showing the party is in danger of losing its parliamentary majority in next year\u2019s elections.<\/p>\n
South Africa\u2019s National Treasury has hired a consortium of international consultants to review Eskom\u2019s fleet of 14 coal plants and determine which ones can be restored to meet the original equipment-manufacturers\u2019 standards.<\/p>\n
The utility will have to implement the group\u2019s recommendations to access R254 billion of debt relief from the government over the next three years.<\/p>\n
In the search for solutions, \u201call options are on the table,\u201d including issuing concessions to private investors to run power plants if that is found to be feasible, according to Ramokgopa. The privately owned Kelvin power station boasts of having an 80% energy availability factor, although that is unconfirmed, he said.<\/p>\n
Efforts to mitigate demand for energy should also be explored, including the option of utilizing technology to remotely switch off water heaters in households, which could potentially free up as much as 4,000 megawatts of capacity, Ramokgopa said.<\/p>\n