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Tag: Electricity

Amendments to Electricity Regulations IS Great News

According to energy experts, the proposed amendments to the electricity regulations will pay great dividends in the long run. After many years of delays, President Cyril Ramaphosa announced a major step forward for independent power production. This amendment will allow independent contractors to produce up to 100MW of power without having to go through a long-drawn-out licencing process.

They’ll even be able to sell back electricity into the grid, providing they acquire the necessary permit from the National Energy Regulator of South Africa (Nersa). The Government’s announcement came on the back of a fresh round of rolling power cuts and repeated warnings from Eskom that power supply would remain constrained for the foreseeable future.

The amendment will pave the way for independent power producers to make electricity and sell it into the grid. The Government has been under intense pressure to open up the power market and energy economist, Lungile Mashele, said that the expansion of embedded generation puts a plan in place to help reduce Eskom’s load requirements.

“It is probably the best plan that helps Eskom both with their financial problems but also with their lack of capacity as well.”

Ramaphosa promised that the amendment would be published within 60 days – after that, there were still a great many details to be ironed out. Energy experts like Ted Blom are warning not to expect a miraculous turnaround immediately.

“For the guys who have the resources, it can happen in 60 to 90 days. For those who have to go through the rigmarole of changing their business plan and applying for funding, it could take a lot longer.”

The amendment will allow municipalities to customise their power mix and procure electricity directly from independent power producers. Unfortunately, this will take time, but there is light at the end of the tunnel.

 

Eskom fearful of electricity disruptions on eve of wage talks

Eskom put out an ominous statement on Friday, 30 April, ahead of its meeting about wages with its workforce’s unions next week. On Tuesday, 4 May, the power utility and its recognised labour representatives – the National Union of Mineworkers (NUM), The National Union of Metalworkers of South Africa (NUMSA) and Solidarity – will head to the Central Bargaining Forum to hash things out.

Eskom said that the wages talks could cause rising tensions and disruption to South Africa’s electricity supply and called on parties involved to “put the country’s best interests first.” In 2018, the last time these wage negotiations took place, the power utility started by offering workers a zero per cent (0%) increase, which led to strikes. The parties eventually settled on a 7% increase.

ESKOM SAID IT IS APPROACHING TALKS IN GOOD FAITH

Eskom and the labour representatives are heading to the Central Bargaining Forum on Tuesday to kick off wage negations, which are expected to last for about a month until 3 June. The power utility cited the unpredictability of wage negotiations as the reason why tensions between Eskom and the unions could rise.

The power utility “assured the public” that it will do its utmost to reach a financially sustainable agreement with the unions that is in the best interest of employees, the public and South Africa as a whole.

Eskom suggested that any wage disputes could potentially affect the country’s already unreliable electricity supply as it could have a negative impact on the power utility’s infrastructure and operations.

 “If disruptions were to occur, these may have a negative impact on our infrastructure and operations, which may compromise our ability to supply electricity,” said Eskom.

“We would like to appeal to all the parties to the talks to conduct themselves in a manner that puts respect for the law, best interests of the country and its citizens first, and to do everything possible to avoid unnecessary disturbances,” said spokesperson Sikonathi Mantshantsha.

“This is particularly crucial as Eskom is, by law, providing a critical essential service.

NUM and NUMSA are calling for a 15% wage increase, while Solidarity is asking for 9.5%.

ESKOM Announces More Power Cuts for this week

 

On Sunday, Eskom said that it will be implementing load reduction in the Free State, Gauteng, KwaZulu Natal, and Eastern Cape province to avoid network overloading in high-density areas. The power utility said load reduction will take place between 5 pm and 10 pm. Areas like Soweto, Vaal, Msinga, Ladysmith, Msunduzi, and Butterworth will be affected by the load reduction.

Provincial statements issued by Eskom name the specific areas that will be experiencing power cuts.

“During the load reduction implementation, customers are urged to switch off all their electronic appliances to avoid possible damage due to power surges when supply returns.  Failure to do so may lead to transformer trips or failures, and damages to household appliances when supply is restored.”

Amazon is going to make its own electricity in SA

South Africa will soon be one of the countries where online behemoth Amazon generates its own electricity from “utility scale” solar and wind plants – and then it will use Eskom’s power lines to get that power where it is needed.

Amazon announced 26 such projects on Thursday, adding France, Germany, Italy, and South Africa to the list of countries where it will generate power to feed its large data centres, which support both its own services and those of many other companies. It has promised to be a “net-zero carbon” entity by 2040, and says the new projects will make it the largest corporate buyer of renewable energy on the planet.

At its present trajectory, 100% of Amazon’s business will be running on renewable energy by 2025, CEO Jeff Bezos said in a statement.

Amazon has been adding data centres in South Africa, and recently made it available as a “region” for data storage and processing, implying that its capacity will grow as does demand for such services in South Africa and nearby countries.

Though Amazon itself provided no details, Business Day reported that the power Amazon intends to generate in SA will come from a solar project in the Northern Cape, due to start construction in 2021. From there the power will be wheeled across the Eskom grid to where it is needed.

Such transmission using Eskom’s power lines is possible – mostly in a theoretical fashion – for other users. The Amazon project could “truly modernised electricity market in which consumers can procure cleaner energy through state-owned grid lines while paying for their upkeep in the process”, Chris Haw, executive director of the Sola Group, which is due to develop the project, told Business Day journalist Lisa Steyn.

Amazon says it has 68 solar rooftops at various fulfilment and sort centres around the world, plus 59 utility-scale solar and wind projects.

The announcement of Amazon’s project in South Africa came on the same day Eskom warned of a “a high probability of loadshedding” thanks to unexpected outages at a number of its – mostly coal-fired – power stations.

City Power clamping down on Illegal Connections

City Power has been targeting illegal power connections in businesses and residential areas in and around Roodepoort. This is the latest in an ongoing operation dubbed Kleena Joburg.  Several areas have been targeted for the cleanup of illegal connections, including

This is the latest part of the operation dubbed Kleena Joburg.

Some of the areas that have been targeted recently include Midrand where officials found that some residents and business owners had been connecting illegally to the grid. Illegal power connections appear to be a serious problem in the Roodepoort area.

City Power officials arrived unexpectedly at the Golden Meat Basket Butchery to the surprise of the owners. The butchery has been accused of stealing power. A man believed to be one of the owners of the butchery tried to convince officials to reconnect them but was unsuccessful in his endeavours.

Other neighbouring shops also lost their power as officials continued with the operation to disconnect illegal users.  Even a nearby church ended up being disconnected as owners failed to pay for electricity.  Joburg said that those guilty of stealing power would be fined R30,000 and needed to pay all arrears before reconnection.

 

Child Killed by Illegal Electricity Connection

A 9-year-old child was killed last week in Rabie Ridge after touching exposed cables at an illegal electricity connection.  Mpho Moerane, Joburg Infrastructure Member of Mayoral Committee, sent condolences to the family of the nine-year-old child who died in the incident.

Moerane said the city was clamping down on illegal connections in the area.  “Illegal connections not only costs the city millions of rands, but it poses a threat to residents, and especially to children.”  An increase in vandalism and theft of City Power infrastructure has been noted and the city has called on councillors and community leaders to assist it in stopping illegal electricity connections.

The city undertook to provide essential services to the informal settlements which includes electricity.  Any person who is caught stealing cables or making illegal connections will face the full force of the law.

FROM THE DESK OF THE PRESIDENT

Dear Fellow South African,

Every South African knows how important electricity is in our lives. When it is available no one thinks about it. But when we have load shedding everything just goes wrong in our lives at home, in our work environment and practically in every facet of our lives.

As we know only too well our energy security is precarious and load shedding imposes very high costs on our economy. Our fleet of coal-fired power stations is ageing, vulnerable to breakdowns and incurs significant maintenance costs.

Reliable, secure and affordable energy supply is the lifeblood of any economy. To limit the impact of climate change, it is equally important that energy is sustainable and environmentally-sound.

We have one of the most energy-intensive economies in the world. While our energy sources have become more diverse than before with the increasing inclusion of renewable energy sources, we remain heavily dependent on fossil fuels, mainly coal. We are also a water-stressed country and coal power generation consumes vast quantities of water.

As government we have decided that to grow our economy and attract investment, secure and sustainable energy supply is paramount.

It is therefore vital that we significantly, and speedily, increase our electricity generation capacity.

Following the commitments we made in the State of the Nation Address in February, government has now gazetted ministerial determinations that will enable the development of more than 11,800 megawatts (MW) of additional power generation. To give a sense of the scale of this development, South Africa currently has in the region of over 30,000 MW of electricity available on the national grid each day.

This signals government’s clear intention to move ahead with one of the key reforms that is needed to unlock the growth of our economy and attract much-needed investment.

This new energy will be procured from diverse sources, including solar, wind, gas, coal and storage. While meeting our energy needs well into the future, this new capacity will also help us meet our international obligations to reduce carbon emissions.

This electricity will be procured through a transparent tendering process that prioritises competitiveness and cost-effectiveness.

Most importantly at a time when energy supply is severely constrained, new generation projects that can be connected to the grid as soon as possible will be prioritised. The next step, which will be following soon, is to initiate various procurement bidding windows including opening Bid Window 5 of the renewable energy independent power producer programme.

This is in addition to the 2,000 MW of emergency power that is being urgently sought through the Risk Mitigation Procurement Programme to meet the country’s current energy shortfall.

In an effort to facilitate electricity self-generation and as part of the reform process, we have removed the licensing requirement for self-generation projects under 1 MW. So far 156 self-generation facilities under 1 MW have been registered, with a total installed capacity of 72 MW.

For facilities that can generate above 1MW, the National Energy Regulator of South Africa is improving its licensing processes to improve turnaround time. So far, five such facilities, with total installed capacity of 25MW, have been licenced. Further work is being undertaken to reform the regulatory environment to ensure that we make fuller use of the great potential in this country for self-generation among commercial and industrial users.

As part of our regulatory reforms, draft amendments to regulations that would enable municipalities in good standing to procure their own power from independent power producers will soon be gazetted.

Stabilising our state-owned enterprises is an important part of the reform process. In this regard, we are working to restore Eskom’s operational capabilities and restructure Eskom to fundamentally change the way in which we generate and transmit electricity in our country. Our vision is to lead South Africa though a just transition which ensures that as many people as possible benefit from the investment, growth and job-creation that we can achieve through expanding our electricity generation capacity.

We are making progress in overcoming the challenges that Eskom has been facing over a number of years. As part of the necessary restructuring process, separate governance structures in the form of boards have been appointed for the power utility’s generation, transmission and distribution divisions, as we announced at the State of the Nation Address. Improvements are continuing in municipal debt collection. Despite recent challenges we have faced with load shedding, maintenance work is continuing at power stations.

The concerns that have been raised about energy policy uncertainty are being addressed on an ongoing basis through the reform process that is at the centre of our national economic recovery effort.

The progress we are making in the area of energy policy reform isn’t just critical to fixing the current power supply crisis. It will begin to reduce the impact of electricity interruptions on businesses. It will create investment possibilities – and upstream and downstream industrialisation opportunities – as we build new generation capacity and expand the electricity grid in the years ahead.

That is why addressing and overcoming the financial, structural, managerial and operational challenges at Eskom has had to take place alongside fundamental structural reforms to assure the future of our energy supply.

The crucial first step in this reform process was the release of the Integrated Resource Plan last year. The IRP updates the national energy forecast and provides a roadmap for our energy sector for the next decade.

It clearly outlines our energy mix, sets out key policy supply and demand decisions to support electricity infrastructure development, and paves the way for investment in low-carbon, climate change resilient energy sources and technologies.

The latest developments I have highlighted in this letter represent a huge, fundamental step forward in the implementation of our ambitious energy plan.

The procurement of power from independent producers will significantly increase investment in the sector, particularly in renewables and gas. This will attract greater investment in energy and create much needed jobs, and spur business development and localisation.

As we begin the long and difficult recovery from the coronavirus pandemic, we can draw encouragement, confidence and hope from the measures we are taking now to address our immediate electricity challenges and secure our energy supply well into the future.

These and other economic reforms that will be undertaken in the months ahead will without any doubt establish a firm and enduring foundation for the return to growth and job creation that South Africa sorely needs.

ESKOM: Possible price increase of 15%

Eskom has welcomed a decision by the High Court to set aside the National Energy Regulator (Nersa)’s decisions on the utility’s regulatory clearing account (RCA) submissions.

The judgement now opens the door for Eskom to retroactively recover billions in tariffs for electricity used by consumers between 2014 and 2017.

“Eskom had made an application for R67 billion for the three RCA balances, whereas Nersa had determined the balanced to be R32 billion,” Eskom stated.

The power utility can, therefore, implement price increases to consumers that are much higher than the previously-approved 8.10% and 5.22% for the 2020/21 and 2021/22 financial years.

“The RCA mechanism allows Eskom the opportunity to achieve the initial revenue that was allowed during the revenue decision and to adjust the allowed revenue due to changes in costs that are subject to re-measurement as outlined in the Multi-Year Price Determination (MYPD) Methodology published by Nersa,” Eskom explained.

“The areas specifically dealt with are the treatment of revenue variances, coal costs, independent power producer costs, and the capital expenditure clearing account,” it added.

Possible price increase of 15%

Nersa previously admitted to procedural mistakes in its revenue and RCA decisions.

This included considering a R69-billion Eskom bailout by the government as revenue when it should have been appropriated as an equity injection.

The regulator subsequently withdrew its opposition to two court applications from Eskom to allow it to recover this money through electricity price increases.

The court is yet to rule on the matter relating to the bailout amount.

Eskom told MyBroadband that a report from Rapport claiming that the utility indicated it wants to increase prices by 15% next year was correct.

Any price adjustments will likely be from 1 April 2021 onwards, Eskom said.

The utility said the correction of the unlawful and poor decisions made by Nersa will assist Eskom to return to financial sustainability.

 

Source: My broadband

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