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Electricity Regulation Act, 2006 (Act No. 4 of 2006)

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Integrated Resource Plan 2019

5. IRP Update

5.1 Observations from the Test Cases

 

The analysis of the results from the simulation of test cases shows (Appendix C) that

in addition to a need for additional capacity in the long-term, there is an immediate risk

of energy shortage in the immediate term.

 

• Immediate term
o Power system simulations show that due to the low EAF of Eskom’s generation plants and the early shutdown of non-performing units (Grootvlei, Komati and Hendrina), there is an immediate risk of huge power shortages. This is likely to result in Eskom running diesel peaking plant for an extended duration, or manifesting in load shedding to avoid high expenditure on diesel. It is also clear that there are inadequate capacity reserves in the event of emergency plant breakdowns in the immediate term. The price path in Figure 9 shows higher average energy costs compared to scenarios in the draft IRP 2018 published for comments. The reason for this is because the system runs diesel peakers at high loaf factor to make up for shortage in capacity in the short-term.
o This risk plus the associated energy shortages gets worse when considering the non-compliance status of some Eskom plants vis a vis NEMA. Eskom is also unlikely to meet the deadline for compliance (postponements granted in year 2015) with MES due to constrained finances and project execution delays. Assuming that non-compliant power plants are shut down, the reality of power disruptions manifests significantly from year 2019 onwards.
o Medupi and Kusile are now de-rated at below name-plate rating, meaning that these plants are unable to provide the full complement of energy for their rating. It must be noted that this energy shortage occurs notwithstanding the already committed capacity from renewable energy projects and the commissioning of the remaining units at Medupi and Kusile. Continued underperformance and late commissioning by Medupi and Kusile units will exacerbate the load shedding risk.
o Simulations also indicate that shutting down Koeberg in 2024 in line with its 40-year end of design life of plant worsens the situation.

 

The recently experienced load shedding as well frequent alerts of possible shortages corroborate the observations from the power system simulations.

 

While the purpose of the IRP is to balance supply and demand on a least-cost basis, implementation lead times for various generation technologies limit the options available for deployment immediately and in the short term.

 

Simulations indicate that the option available to Eskom is to run diesel-fired peaking plant at load factors averaging about 30% for the period 2019 to 2021. Running these plants at higher than contracted load factors creates logistical challenges as there is insufficient infrastructure to support the volumes of diesel required under these circumstances. This arrangement will also worsen the already delicate Eskom financial situation. In addition, electricity users will suffer high tariff increases.

 

The results from the simulation also show that in the long term, the system uses the combination of renewable energy, gas and storage to meet demand.

 

The following specific observations are made with regard to the long-term:

 

• Long Term
o The system only builds renewables (wind and PV) and gas if unlimited renewable and gas resources are assumed.
o Despite decommissioning of old power plants and preference by the power system for renewables and gas, coal remains dominant in the energy mix for the planning period up to year 2030.
o The removal of annual build limits on renewables results in large erratic annual capacity allocations in the plan.
o When annual build limits on renewables are imposed and realistic gas availability assumptions are applied, the system builds battery storage and coal to close the gap.
o Imposing annual build limits on renewables for the period up to 2030 does not affect the capacity from wind or solar PV in any significant way.