Image Source: Eskom
Local – Despite Eskom having excess electricity at certain times of day, energy expert Mohamed Madhi believes South Africa still lacks enough base-load power to meet demand over a full day.
Electricity and Energy Minister Kgosientsho Ramokgopa said earlier this week that supply was exceeding demand, with more than 4,000 megawatts of available capacity during some parts of the day. The government is now considering battery storage and gas-fired power to manage the changing system.
Madhi welcomed Eskom’s plans for large-scale battery storage but said gas-to-power was not a sensible route. He said battery storage was one of two ways to address the midday surplus, describing Eskom’s plans to install large amounts of it as a very good thing.
“Now gas to power ordinarily would not be a bad idea. It is less polluting than… other forms of power. The thing is we don’t have gas in this country. That’s the elephant in the room. We need to understand we don’t have gas in this country.”
Private Solar Shifts Demand
The midday surplus largely results from businesses rapidly moving to generate their own power over the past few years. Many of those that could afford it installed solar panels and battery storage on site.
Madhi said this was a direct result of years of load shedding and Eskom price increases well above inflation, which pushed businesses to build their own power plants. More than 5,000 megawatts of behind-the-meter projects had been installed, equal to roughly 12% of Eskom’s available capacity.
Because most of this was solar, which produces most of its power around midday, demand on Eskom fell during those hours. Madhi said the obvious response was to lower prices to stimulate demand, but Eskom didn’t have that on its radar.
“You get three time-of-use tariffs over the day: peak, off-peak and standard. Midday is considered a standard tariff. It must be considered an off-peak tariff, and that will stimulate demand.”
Why Prices Keep Rising
While Eskom has posted improved results over the last two periods, electricity prices continue to climb for consumers. Households and businesses are still feeling the pinch, even as the country marks hundreds of days without load shedding.
Madhi said this was because Eskom’s operating and debt costs were high, with a large share of those costs fixed. This set the price Eskom needed to charge to break even or show a profit.
He acknowledged that government policy had been good, allowing private companies to build power plants with few practical limits on size, but said Eskom had not yet been broken up operationally.
“The price that works for Eskom is not the price that works for the economy. So renewable energy and other forms of power are cheaper than Eskom. So when it comes on a like-for-like basis, Eskom cannot compete, and this is the biggest problem we have.”
