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Business and sustainability performance review  
SECURING CONTINUITY OF SUPPLY  
 
Load shedding – demand exceeds supply | Stabilisation and recovery plan | Generation plant performance  
 
Transmission system performance | Distribution system performance | Primary energy  
   
 
Load shedding – demand exceeds supply    
   
  Major transmission line construction strengthens the national grid
  Major transmission line construction strengthens the national grid.
   
 
 
Introduction

Between October 2007 and February 2008 South Africa suffered major supply interruptions, as load shedding had to be implemented to manage the energy shortage.

Load shedding is carried out by Eskom, together with redistributors (municipalities), when the demand for power on the national grid exceeds the available generation capacity. Failure to manage this would result in the possibility of massive power blackouts across the nation. To avoid this, Eskom monitors the demand for power and sheds (shuts down) sections of the grid to reduce the load and ensure network stability.

Electricity cannot be stored to act as a buffer against any unforeseen events. An adequate reserve margin1 acts as a buffer against such circumstances. With the decline in the reserve margin the only option available is to reduce the load through load shedding and reduced demand by customers.

1A cushion of spare capacity that can be used when planned maintenance is necessary and when the   system is impacted by unexpected technical faults that demand unplanned maintenance, such as poor   coal quality, sudden peaks in demand, or “acts of God”, such as extreme weather conditions. Reserve   margin is measured as a percentage of maximum generating capacity.

Why the energy shortage?

From 1996 to 2004, both the private sector and government felt that Eskom should not build new capacity, although they were warned that a decision was required by 2000. Government wanted to bring independent power producers into the market. Eskom’s low prices, however, dissuaded independent power producers from investing in the power-generation sector. We were only given the go-ahead to start building new plant in October 2004. Taking into account the long lead times to build new stations, there was not sufficient time to build new power stations to ensure adequate generation capacity in the short term.

As a result, Eskom’s reserve margin has decreased to about 8%, well below the accepted norm of 15%1. When generator units are taken out of service for planned maintenance2, the lower reserve margin means that the remaining generator units need to run harder to meet the demand for electricity. This makes the units more vulnerable to faults caused by accelerated wear and tear. As a result, we experienced an increase in technical faults during this period.

The situation was worsened by a reduction in the quality of the coal received, which necessitated the burning of increased volumes of coal for the same output of electricity. The unusually heavy rains during January and February 2008 also caused production delays at the collieries. In addition wet coal, which turns to sludge, created coal handling problems both at the collieries and the power stations. As a result of these coal problems, a number of power stations were unable to operate at full production.

Government and Eskom have apologised for these events. We acknowledge that load shedding is very disruptive and we are extremely concerned about its impact on our customers. Many difficult lessons have been learnt.

1 Nersa has recommended a reserve margin of 19%.
2 Planned maintenance is mostly scheduled in the summer months, as electricity demand is traditionally  lower in summer than in winter.

Managing demand

Eskom has the challenge of optimally balancing the supply of, and demand for, electricity to ensure a more reliable supply of energy for all consumers.

The solution is to improve the operational performance of our power stations and at the same time find sustainable short-, medium- and long-term solutions to the current situation. A number of initiatives have been implemented such as the construction of two open-cycle gas turbine power stations and the recommissioning of three mothballed coal-fired power stations, and further alternatives are being developed to address the challenges. Another supply-side solution is co-generation. In the short term the primary focus is on demand-side initiatives to reduce the demand for electricity, which unfortunately currently includes load shedding.

Eskom is confident that it can address the challenges, but this is only achievable with the support and assistance of all stakeholders. It is, however, important that emergency load shedding and other demand reduction initiatives should be implemented in a transparent manner to fairly share the load and responsibility among all consumers.

We have developed a set of guiding principles to assist with the optimal planning and effective execution of national load shedding:
  • maintaining network stability
  • integrated national approach to the crisis
  • minimising the safety risk
  • minimum disruption to our customers and the community:
  • predictability of disruption
  • fairly share load shedding among customers
  • rotation of load shedding times
  • accommodating special customer needs where possible
 
  The rationale for exporting electricity  

Eskom is frequently asked why it exports electricity to neighbouring countries when there is a power shortage in South Africa. Eskom’s exports amount to 5,7% of the total energy available in the Eskom system and imports account for 3,9% – giving a net export of 1,8% of total energy.

Our neighbouring countries have a relatively small system demand for electricity, which makes it uneconomic for them to invest in generation capacity. Some of our neighbours rely on imported power for between 50% and 80% of their electricity needs. Such a situation cannot be reversed very quickly and a sudden cut in the electricity supply to them will have a crippling effect on the regional economy.

Firm power agreements are in place with the national utilities of Botswana, Swaziland and Lesotho, while an agreement with Namibia ensures their continued supply as well. In addition to national utilities, Eskom also has firm supply agreements with three large customers across the border in Mozambique and Namibia. These three customers make up the bulk of Eskom’s total exports.

The SADC region has considerable coal and gas resources and hydro-electric potential that present attractive generation opportunities for the future. As South Africa’s domestic electricity demand grows and production costs increase, there is a growing potential for electricity imports into the country, with environmental benefits if the hydro capacity is considered. Eskom already imports electricity from Mozambique, the DRC and at times the other countries in the region. The current and future imports could be severely jeopardised if exports of electricity from South Africa are restricted.

Ultimately, due to the relatively small size of the level of net exports, ceasing exports and losing imports would not result in a significant difference to the current South African energy situation. The short-term response to the energy situation has been to maximise purchases and reduce sales as far as possible. The load reduction required of the South African customer base (currently 10%) is also expected of the neighbouring countries, and when manual load shedding is necessary our neighbouring utilities also undertake proportional manual load shedding.

 
 
   
 
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