Treasury officials said the government would apply to the BRICS New Development Bank (NDB) for further loans in the 2023/24 fiscal year, but were unable to say whether the paperwork would be ready by the time South Africa hosts the BRICS Summit in July.
In December 2019, the NDB provided a loan of R6 billion to Eskom to set up a Battery Energy Storage System comprising 360 MW of distributed battery storage sites across four provinces of South Africa.
The project was primarily aimed at meeting peak electricity demand, increasingly through renewable energy, and avoiding emissions associated with utilisation of fossil fuels. NDB’s financial support to this project was provided along with that of the World Bank and African Development Bank.
Currently Eskom uses expensive diesel-fired Open Cycle Gas Turbines (OCGT) and hydro-electric pumped storage schemes to meet peak period demand, but recently, unplanned breakdowns at coal-fired power plants have meant it has been unable to meet demand and so has had to institute load shedding to balance demand with supply.
Eskom’s Energy Availability Factor (EAF) eased to 52.22% in 2022 from 58.01% in 2021 and 61.79% in 2020. Planned maintenance outages eased to 10.61% in 2022 from 10.81% in 2021, 11.24% in 2020 and 9.94% in 2019, while unplanned outages rose to 29.82% in 2022 from 24.49% in 2021, 20.88% in 2020 and 21.57% in 2019.
Finance Minister Enoch Godongwana said in his Budget speech that the lack of reliable electricity supply was South Africa’s biggest economic constraint.
This was because South Africa experienced record levels of load shedding in 2022 with 207 days of load shedding compared with 75 days in 2021.
The new NDB loan is likely to focus on strengthening the transmission system as the wind-rich and solar-rich provinces of the Eastern Cape and Northern Cape have reached their transmission capacities.
Only five solar photovoltaic (PV) projects had been appointed in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 6.
This Bid Window was launched in April 2022, and was then delayed specifically to allow for an expansion in the procurement allocation from 2,600 megawatts (MW) to 4,200 MW as part of interventions announced by President Cyril Ramaphosa on 25 July 2022 to tackle extreme load shedding.
In the event, projects with a combined capacity of only 860 MW have advanced to preferred-bidder status, a figure that could rise to 1,000 MW, if discussions with a sixth eligible project are successful.
Not one of the 23 wind projects bid, with a combined capacity of more than 4,000 MW, have been appointed, even though 3,200 MW was specifically allocated for wind procurement under this bid window.
BUSINESS REPORT