Page 45 - Energize July 2022

VIEWS AND OPINION

The analysis in Part A of the Study Report demonstrates how avoidable the current load Furthermore, there is no time to
shedding crisis has been, and how cost-effectively it can be resolved based on hard evidence start from scratch. To deliver expedited
from the actual 2021 data. capacity we must work with what we
Insights from this analysis also demonstrate that by taking adequate steps (starting have. This means, for instance, exploiting
immediately), solutions to resolving load shedding are within reach. opportunities with the existing IPP Office
procurement rounds, existing IPP projects,
“In the absence of further urgent and drastic interventions load shedding is likely to increase the 1 MW to 100 MW market segment, the
substantially in the coming years” <1 MW market segments, and Eskom and
municipal procurements, etc.
An achievable game plan to end loadshedding in South Africa Numerous resource expansion
South Africa’s ballooning load shedding problem is significantly worse than generally scenarios designed to resolve loadshedding
recognised, but insights from the empirical evidence demonstrate that practical pathways exist were analysed. From this an ambitious Risk
to contain and then resolve load shedding, and kickstart the country’s green industrialisation Adjusted Resource Plan was developed
and decarbonisation ambitions. Unprecedented interventions are required. that also contains a modest amount of
contingency to hedge against the high
The purpose of this report is two-fold, namely, to demonstrate to policy makers, regulators, probability that not all aspects of a plan will
and key stakeholders: be delivered in time.
(a) how insistence on poorly conceived measures and regulatory rules has the direct effect of Together this suite of additions in the
worsening the load shedding crisis by obstructing and delaying interventions that could Risk Adjusted Resource Plan can practically
reduce it; and eliminate load shedding by 2024, with
(b) that by applying a laser focus to implementing a coherent set of strategically identified full security of supply reached by 2025.
policy levers, government can establish a high level of confidence that the problem will be Ensuring this is delivered on time will be
resolved in a reasonable period of time. a substantial challenge. In practice the
outcomes can be achieved by a “game
In contrast to conducting an ex-post analysis of historical data, developing a forward-looking plan” comprising a number of measures,
plan to resolve load shedding is a more complex task – even over the short to medium term – detailed further in the full Executive
due to the uncertainty associated with, and the continued evolution of the key drivers behind Summary and Study Report.
load shedding. This game plan to resolve load
shedding consists of a combination
The analysis covers the period up to 2026 of interdependent measures which, if
The first step was to analyse the nature of the problem, based on current trends and the all implemented, will result in a high
interventions already being implemented to connect new generation capacity onto the grid probability that load shedding will
(i.e., the outstanding Kusile units and IPP Office procurements up to Bid Window 6). This is practically be eliminated by 2024.
referred to as the Base Case. Implementing these measures will
Thereafter, a near optimised suite of additional resources was developed – as summarised require the cooperation of different
in Table 6 on Page 8 of the full Study Report – that will have to be deployed to close the gap players – including some who do not
that remains. This is referred to as the Risk Adjusted Resource Plan, which is explained in more always appreciate the negative impact of
detail in the full Executive Summary and Study Report. their current positions or behaviour on the
While there are a limited number of plausible scenarios where load shedding is resolved ability of the power system to resolve load
under the Base Case, this requires a decreasing demand trajectory and no further decline in shedding.
the coal fleet performance. Implementing these reforms will also
In the more likely scenarios, load shedding in 2023 will see up to a 4-fold increase require political will at a scale that has not
compared to 2021; up to 5-fold in 2024, 4-fold in 2025 and up to 10-fold in 2026, all when yet been demonstrated in dealing with
compared to 2021 – the worst year on record. In other words, in the absence of further urgent South Africa’s power crisis. As with the 100
and drastic interventions load shedding is likely to increase substantially in the coming years. MW reform, substantial “arm twisting” will
Any credible plan to resolve load shedding cannot be based on best-case scenarios, it be required.
needs to respond effectively to most of the plausible downside scenarios outlined in the
study report. Furthermore, the plan cannot be based on the same centralised “all eggs in one This is an abridged version of the Executive
basket”-type approach that created the problem in the first place. The challenge is so large Summary of a study report by Meridian
and complex that no single player will be able to solve it alone. Economics, published on 13 June 2022.
The focus of Government’s intervention should be on mobilising thousands of economic The report is in two parts.
actors throughout the economy to take the necessary steps to bring new capacity online • Click here for Part A: insights from 2021
urgently. This must be achieved by opening doors, removing policy obstacles and red tape, - SA’s worst load shedding year so far
and creating powerful incentives for delivering the right outcomes. The solution must be • Click here for Part B: An achievable
diversified, contain contingency and avoid “single points of failure”. game plan to end load shedding

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