Energy Transition: Acceleration of Generation Capacity in South Africa

As we move from 2020 into 2021, it has become clear that the Covid-19 pandemic and ongoing load-shedding continue to severely hinder the South African economy. In the meantime, energy transition is accelerating globally, spurring South Africa on to decarbonise its economy while supporting sustainable economic growth.

2020 recorded the highest number of load-shedding hours since 2015, with the disruption continuing into 2021 as Koeburg Unit 1¹ (900MW of capacity) was taken offline ahead of scheduled maintenance in January and remained offline until 22 June. The impact of this unplanned disruption demonstrates the continued fragility of the electricity supply and demand balance in South Africa and the urgent need to bridge this gap.

Some progress could be seen on this front by the end of 2020 with the launch of the Risk Mitigation IPP Procurement Programme (RMI4P)² and Eskom being increasingly open to using Independent Power Producers (IPPs) to support its own generation units.

This momentum has continued in 2021 but not without challenges. In March we saw the opening of the Renewable Energy Independent Power Producers Procurement (REIPPP)³ Round 5 for 2,600MW of wind and solar power, with further rounds promised for later this year and in the first half of 2022.

At the same time eight projects (1,846MW) were awarded preferred bidder status under the RMI4P with three further projects (150MW) also awarded preferred status under the programme on 1 June 2021. While the legal and contractual concerns surrounding the Karpowership projects (1,220MW in total) have been well publicised and may not progress, the remaining RMI4P projects will still add 776MW of dispatchable power to the grid by mid-2022.

This is approximately equal to one unit of the Medupi or Kusile coal power stations and will significantly mitigate South Africa’s electricity supply risk.

Footnotes:

1: Eskom press release

2: Department of Mineral Resources and Energy media statement

3: Department of Mineral Resources and Energy media statement