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Separate Just Energy Transition plan from coal plants – Eskom

The issue of decommissioning coal-fired power plants need to be decoupled from South Africa’s Just Energy Transition (JET) plan.

During a fireside chat on the opening day of Enlit Africa in Cape Town on Tuesday, Eskom’s senior executives emphasised that the two aspects of South Africa’s energy plan need to be regarded as separate projects.

Bheki Nxumalo Eskom, Group Executive: Generation, said the utility is committed to the 2030 target towards achieving carbon neutrality.

Eskom dealing with the coal issue ‘holistically’

He said the issue of renewable energies need to be separated from the process of weaning the power stations off coal.

Nxumalo said Eskom’s approach has been to assess all of its power stations which “gives us the opportunity reduce coal usage across the fleet.”

“We are committed to decommissioning coal plants… among the  bigger stations, we are busy for example at Lethabo [in the Free State] to lower emissions.

“We need to decouple JET from [the] closing [of] power stations. So even if we do it at Grootvlei, there is no anxiety…”

He cited Komati as an example where battery energy storage has been commissioned as coal usage continues to be phased out.

Between 2018 and 2022, all nine of Komati’s generators were sequentially removed from operation and the number of jobs supported by the plant started to decline, ESI Africa reports.

Now, the power station building will be given new life as part of Eskom’s Komati Repowering and Repurposing Project, which will be the utility’s reference point for how to decommission coal plants.

Nxumalo said nuclear energy is another option the government is exploring. He said there is a review of coal usage underway with an eye on 2030.

Municipal debt to Eskom a sticking point

Addressing municipal debt – Eskom is owed R75 billion – Dan Marokane, Eskom: Group Chief Executive reminded that if Eskom is not paid, “the shareholder becomes the last port of call.”

Marokane said a national conversation needs to be had about finding a sustainable model – from a financial and performance perspective – for municipalities in terms of paying their electricity bills and serving residents and businesses.

“We need to start codifying new ways of doing things as a country… regarding municipalities.”

Calib Cassim, Eskom CFO, said National Treasury has incentivised municipalities to pay their debt, which calls for for 12 consecutive months of payments.

To date only 10% of municipalities have complied to this payment schedule.

“How do we ensure that we have a mechanism in place to make sure Eskom is paid what it is owed… to unburden the fiscus so Eskom doesn’t have to go to government and the taxpayer.”

However, Eskom’s recovery has been aided by the Debt Relief Bill which has given the utility a financial buffer in which to budget for its capital expenditure in advance.

This, Cassim said, Eskom has been unable to do for the past six years.

He said the reduction year-on-year of the diesel bill as announced by Minister of Electricity in the Presidency, Kgosientsho Ramokgopa, has “given us some runway.”

On Monday, Ramokgopa said the utility has spent R1.24 billion on diesel from April 1 to May 16.

This is a decrease from the R5.2 billion spent on diesel during the corresponding period last year, he said.

Beyond loadshedding

In terms of transmission development plans (TDPs), Segomoco Scheppers Eskom, Group Executive, Transmission, said “we have to look at the grid holistically.”

He said it is key to balance the need to roll out infrastructure, while maintaining the daily running of the electricity system.

Given the pressures on the supply/demand side, Eskom has prioritised shorter term projects to generate capacity.

Adopting a project life cycle model, Eskom has seen projects in the various phases increase significantly over the past year.

“There were five  projects in definition phase in 2023… that jumped to 22 in the past financial year. This is not a planning exercise… we are getting projects into development.”

Scheppers cautioned that a methodical approach needs to be taken in terms of “how we go about dealing with the system and getting new projects on board.”

Marokane said ending loadshedding is not Eskom’s end goal. Today marks the 55th day with no loadshedding. The last time South Africa had more than 51 days without loadshedding was between 5 December 2021 and 2 February 2022.

“What will Eskom look like in 100 years from now? This is an opportunity for Eskom to re-invent itself.”

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ESI Africa
Content Team
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