New twist in IPP battle as Eskom may close stations early

April 10th, 2017, Published in Articles: EE Publishers, Articles: Energize, Featured: Energize

 

Eskom has been vague when it comes to backing up its claims about five power stations which will have to close early due to the expected inclusion of more renewable energy producers. Not even the three unions that have met with executives from the power utility over the past few weeks have been given details about how much sooner the five – mostly very old – stations will close.

Hendrina power station

Two of the power stations were scheduled to start their final decommissioning in 2020 and the remaining three in 2024, 2025 and 2026, respectively. Although Eskom has repeatedly said that it would bring these decommissionings forward, it has not indicated when this occur.

Eskom is blaming the decision to speed up its decommissioning schedule on the Renewable Energy Independent Power Producer Procurement (REIPPP) programme, which legally obliges it to buy all the power produced by private wind and solar electricity generating plants.

In the process, Eskom has effectively enlisted the unions at its operations as allies in its continuing campaign against private renewables.

The National Union of Metalworkers of SA (Numsa), as well as the National Union of Mineworkers (NUM), has directed its anger at the REIPPP programme. Numsa promised to organise a national shutdown to protest the closures and has submitted a section 77 notice to the National Economic Development and Labour Council – the precursor to a protected national general strike. NUM has likewise promised “rolling mass action” to get the REIPPP programme reversed.

However, NUM spokesperson Livhuwani Mammburu this week told City Press that Eskom had not indicated when it intended to close the stations. Information from members indicates that at least one of them, Hendrina, might start closing in 2018, but there has been no formal notice from Eskom, he said. Deon Reyneke, the energy sector head at union Solidarity, said that Eskom had not yet responded to its requests for more information.

Asked if Eskom had provided a timeline for the plant closures, Numsa said that Eskom had not indicated whether it intended to mothball the plants. The union also said that Eskom had presented the decision to close plants as “a directive from government”.

This uncertainty has not stopped NUM and Numsa from adopting almost exactly the same position – renewables are good, but cannot be introduced at the cost of coal jobs. The closure of the five stations, namely Komati, Kriel, Camden, Grootvlei and Hendrina, will take a nominal 8000 MW off the national grid, although not all of them are running at capacity.

The latest decommissioning schedule was released as part of the new Integrated Resource Plan in November 2016. The only immediate change to this schedule, compared with the one in 2013, was that the closure of Hendrina was brought forward from 2021 to 2020.

Excess power

Khulu Phasiwe, Eskom’s spokesperson, says the decommissioning will be brought forward in an effort to create space for renewables. But even without the REIPPP programme, Eskom will have excess power. It is important, Phasiwe said,  to note that if the economy was growing at 4,5% as projected in the Integrated Resource Plan 2010, or if the electricity demand was growing by 2,8%, there would be no need for Eskom to close the power stations. The reality is that electricity demand has remained stagnant and economic growth has shrunk to 0,3%.

Notwithstanding the fact that Eskom now has a surplus of more than 4000 MW on any given day, Eskom has an obligation to add new renewable energy projects to the grid. Eskom is basically left with no option but to close five of its power stations, according to Phasiwe, because not signing the REIPPPP was not an option.

South Africa’s peak power demand last year was lower than it was a decade ago, and was far below the medium-term projections Eskom is still using. The already large surplus of electricity in the country is at least 4000 MW at peak demand every day, according to the power utility.

While there are renewable projects with a capacity of 2900 MW connected to the grid, the solar projects in particular make little contribution during the evening peak electricity usage time. Closing the stations early will also enable Eskom to avoid expensive retrofittings to reduce emissions.

Acknowledgement

This article was first published by City Press and is republished here with permission.

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