Light at the end of the tunnel as first 100MW private supplier gets go-ahead

The National Energy Regulator of SA (Nersa) has approved its first 100MW power-generation projects in the private market.

Renewable energy provider SOLA Group and titanium dioxide and inorganic chemicals producer Tronox Mineral Sands are working together to create the solar photovoltaic (PV) projects in North West.

PV refers to materials and devices which convert sunlight into electrical energy.

The extra 100MW will help bolster the electrical grid as power utility Eskom battles to meet the country’s requirements. 

The announcement coincided with the start of the Joburg Energy Indaba. The two-day event will act as the matchmaker between the city and renewable energy companies.

Johannesburg mayor Mpho Phalatse wants to add an extra 500MW of alternative energy to the grid.

The city’s energy distributor, City Power, receives 90% of its electricity from Eskom and 10% from the Kelvin Power Station.

Both sources use coal to generate electricity.

Last year the city said it was looking to add 200MW of electricity from PV farms and rooftop suppliers, 200MW of private PV electricity generation to the grid, 50MW of gas-powered electricity generation and 25MW capacity from waste to energy in the Robinson deep landfill site.

This was made possible in August after President Cyril Ramaphosa amended the Electricity Regulation Act, allowing municipalities to add independent power producers (IPPs) to their grids.

Last year’s load-shedding was said to be the worst, increasing by 38% — an estimated 1,136 hours of power outages — but SA has already experienced 594 hours of blackouts this year. Experts predict the hours of darkness will surpass those recorded in 2021.

Phalatse said this has had dire consequences for the country’s economic hub.

She said R26bn was needed to help fix City Power’s infrastructure, but the city’s entire capital budget is R7.7bn — which includes not only electricity but other infrastructure such as water and roads. 

“There is no way the city alone can turn about the energy problems in Johannesburg.

“Private-public partnerships are seen as the most feasible way forward ... The power sector generally, including embedded generation, energy storage and smart grids could leverage huge investment in our city and enable us to create the jobs we desperately need.”

Solarus SA, an IPP dealing in renewable energy, gave some perspective on the current energy crisis using Eskom’s Integrated Report 2021.

Director Tokologo Phetla said Eskom generated 201,400GW/hour (GWh) in 2021, which was a 13,568GWh loss in power generation from the previous year. 

He said a typical middle to low-income family uses about 3,600kWh of electricity per year, which means the power generation loss translates to more than 3.79-million households’ worth of electricity was lost.

The cost of load-shedding on the economy is R9.53 per kWh, in production and job losses, which makes the total cost of the generation loss last year R129.3bn.

Energy expert Mike Rossouw said the loss in generation was due to there being less than Eskom’s target, which was 80% of its total fleet being available to produce power while 10% was on planned maintenance and 10% in breakdown mode.

Rossouw said at present less than 50% of the fleet was available to produce power.

Load-shedding is then instated to ensure some power remains in reserve so the country does not have a complete blackout. 

SOLA Group CEO Dom Willis, commenting on the approval of the 100MW project, said: “The significance of this first move is that it will pave the way for many more large-scale private projects to receive approvals to be able to contribute to generation capacity to the grid.

“Further, this is a clear signal to the market that private power is achievable and there are private funders that are excited to finance this market.”

Meanwhile, Cape Town has already established the need for IPPs to add 300MW of energy to the city. 

Tenders for that project will close on Thursday.