Eskom has placed the responsibility of protecting the national grid in the hands of electricity users, while the government scrambles to avert a grid collapse on the back of deteriorating generation capacity.
This comes as the National Rationalised Specifications Association finalises the new national rationalised specifications document – NRS048-9 Revision 2 – which proposes load shedding schedules of up to Stage 16 following Eskom’s application.
The struggling power utility on Friday said it had opened applications for the demand-side management programme, which provides a financial incentive for demand reduction by commercial and residential customers.
Through the Demand Side Management (DSM) programme, Eskom has so far been able to avert national Stage 7 and Stage 8 load-shedding through load curtailment by industry, in spite of shedding between 6 000MW and 7 000MW.
The DSM programme is currently running with the industrial sector, which sees intensive energy users reduce as much as 20% of their power usage when requested to ease demand in exchange for a financial incentive.
However, Dr Kgosientsho Ramokgopa, the minister in the Presidency responsible for electricity, said Eskom was extending its DSM programme to commercial and residential users, which would contract qualifying groups to assist Eskom in load curtailment.
Ramokgopa said they had scheduled meetings with the SA Property Owners Association to discuss measures that could be implemented to help conserve electricity.
He said the DSM interventions were going to be a focal point as the country entered the winter months leading into December, because initiatives at the household level were cheaper and faster.
According to Ramokgopa, there will be an incentive of R3 million for every megawatt saved, but only “qualifying and deserving groups” would receive the incentive.
“Once we aggregate the number of organisations and households participating, we are likely to see this coming to fruition rapidly,” Ramokgopa said.
“Simple measures such as switching off electric geysers when not in use can reduce demand by 1 000MW.”
This proposal has been backed by former Eskom chief operations officer Jan Oberholzer, who is overseeing all the projects dealing with the current electricity crisis.
Oberholzer on Friday said Eskom was busy trying to recover some of the big units, which would provide between 1 000MW and 4 000MW to the grid, but this was not going to happen before the end of the year.
He said Eskom bringing forward the return of three units at Kusile power station by December, which should provide at least 2 100MW, would help ease pressure on the grid.
“We will be able to get additional capacity before the end of the year, but I don’t believe it will be sufficient. We need additional capacity as soon as possible, and we need to reduce demand in order for Eskom to take units off-line and fix them properly,” Oberholzer said.
“If we don’t get to that situation where there is sufficient capacity and we reduce demand, I’m afraid that we are going to sit with this risk for some time to come.”
The SA Reserve Bank has estimated that one unmet stage of demand results in a R300 million loss to the economy per day, with stage-6 load shedding costing the economy at least R1 billion a day.
According to Ramokgopa, the country is set to lose more than 850 000 jobs this year owing to load shedding, after more than 650 000 jobs were lost last year.
Load shedding is also expected to shrink by as much as 2% the gross domestic product growth forecast for this year, as it has placed significant pressure on output in the primary sector.
Food inflation has remained sticky at a 14-year high, as farmers pass on to consumers the cost of alternative energy sources to keep the lights on and production flowing, and to keep produce stored in the necessary conditions.
The agriculture sector lost more than R23bn over the nine months between January and September last year, when load shedding more than doubled compared with 2021.
Load shedding has also been devastating to small businesses, which rely heavily on a consistent and reliable energy supply. A considerable number of small business owners reported a decline in business productivity levels as a direct result of the rolling blackouts.
According to the “Insights Report”, conducted by Nedbank in partnership with the Township Entrepreneurs Alliance, about 65% of small township businesses are forced to cease operations during power cuts, while a further 66% have also been forced to cut jobs owing to significant revenue losses.
Business Partners Limited chief investment officer Jeremy Lang said the cost of load shedding had exceeded an estimated R1.2 trillion, notwithstanding the losses accumulated during the current financial year.
“Many of the corner shops, tailors, shisanyamas, and local fruit and vegetable sellers who have become such an important part of the South African SMME landscape are not in a position to afford expensive generators, inverters and alternative energy sources,” Lang said.
To mitigate some of these losses, Ramokgopa said the Land Bank had established a R2.5bn fund for farmers to invest in alternative energy solutions to support energy security.
This will provide a mix of grant and loan funding, with the grant component ranging from 30% to 70%.
Ramokgopa further announced that the National Treasury was finalising adjustments to the loan guarantee scheme to establish an energy bounce-back scheme, which would be launched shortly.
He said this would provide first-loss funding for solar-related loans, as well as for leasing solar equipment to small and medium businesses affected by the rolling blackouts.
Ramokgopa has also proposed that the Cabinet drop the fuel levy on diesel for generators to help businesses, hospitals and the agricultural sector – all of which rely on generators – to keep their facilities operational during load shedding.
The national grid remains at risk of higher stages of load shedding as Eskom on Friday suffered unplanned breakdowns of 18 713MW of generating capacity on Friday, while 3 222MW of generating capacity was out of service for planned maintenance.
Eskom estimates that demand for electricity will peak at at least 34 000MW over the next couple of months.
Energy analyst Chris Yelland said he did not agree with a protracted approach of procuring renewable energy over many years when Eskom needed immediate solutions.
“What can be delivered in the short term is 10 000MW of solar rooftop PV in the domestic, commercial, manufacturing and agricultural sectors, coupled with 3 000MW of battery-energy storage that would solve 95% of the problem in one year,” Yelland said.
“I’m not saying we shouldn’t focus on longer-term issues. I’m just saying that, before you can fix Eskom’s fleet of poorly performing coal-fired power stations, you need to have surplus generation capacity to enable you to shut down the generators to enable you to have deep-level maintenance over a long period of time.”
BUSINESS REPORT