Dr Kgosientsho Ramokgopa, the Presidency’s Electricity Minister, has admitted that Eskom lacks the requisite generation capacity to avoid Stage 8 load shedding this winter!
This comes after Eskom warned last week that rising electricity demand due to cold winter weather could force it to implement unprecedented Stage 8 load shedding if unplanned breakdowns increase to 18 000MW and 4 000MW is taken out of service for maintenance.
Ramokgopa returned yesterday to Kusile power facility in Mpumalanga to receive a report and examine the maintenance and construction work being done there.
At least three of the power station’s units have been taken offline owing to a flue gas duct (chimney) breakdown that happened in October, losing Eskom at least 2 400MW in generation capacity, while another unit has also been taken offline.
Ramokgopa stated that the four units shut down at Kusile would have each supplied 800MW to the national grid, totalling 3 200MW and reducing load shedding by at least three stages.
“Kusile is a critical part to the easing the load shedding crisis. If we were to get these units back, I think we would have made significant advances,” Ramokgopa said.
“Last time I was here, management indicated that they will be bringing those three units back (online). The last one will be brought back on December 24; the last one of the three will be back on-stream by November 28, 2023 and the second one by December 11.
“The confirmation we got is that we will start doing tests on Unit 5 by October. We are confident that we will have it fully running by April next year,” the minister said.
Kusile is one of Eskom’s two new power stations, with six 800MW coal-fired generating units for a total capacity of 4 800MW.
The station has been beset by architectural faults that will cost an additional R14 billion to complete construction, bringing the total cost to South than R175 billion since the building began in 2007.
Despite complaints from environmental advocacy groups, the government has taken steps to improve the performance and extend the life of Eskom’s existing coal fleet as part of a plan to reduce load shedding.
Though Ramokgopa stated that three units would be restored later this year, he could not rule out the prospect of higher levels of load shedding in the winter.
“I am saying this reluctantly because load shedding is load shedding… It is devastating to the economy,” he conceded.
“It will be very irresponsible of me to declare by decree there will be no Stage 8. We are doing everything possible to ensure that we don’t go to higher stages of load shedding.”
Power station breakdowns now total 16 486MW of producing capacity, with 3 817MW of generating capacity out of service owing to planned maintenance.
According to Bank of America Merrill Lynch’s South Africa strategist John Morris, it has helped that Eskom has dealt with fears of a national blackout, even if it has guaranteed load shedding will peak at Stage 8 this winter.
“Grid collapse fears have eased. If it did (collapse), consensus says it would take one or two weeks to restart,” Morris said.
The risks identified by Eskom have increased the likelihood of real GDP reductions in the second and third quarters, and possibly throughout 2023.
However, a lot of experts are deferring further downscaling of the GDP prediction until the first quarter GDP numbers are released early next month.
S&P Global Ratings did not release a rating assessment for South Africa on Friday, keeping the country’s BB- long-term foreign currency debt rating unchanged with a stable outlook.
Jacques Nel, head of macro at Oxford Economics Africa, said S&P’s inaction was unsurprising given the uncertainty surrounding South Africa’s energy situation.
“The decision by S&P to not issue a ratings review despite having one scheduled could mean that it is reluctant to affirm the rating given the uncertainty permeating through the economy at present,” Nel said.
“Another downgrade is much more likely than any improvement, which suggests we could see another, more damning review down the line…
“The inaction could also just mean that S&P felt another review was unnecessary given the change in outlook it communicated in March. However, it is difficult to believe the latter without at least some semblance of truth also being behind the former,” he said.