South Africa’s governing party has approved plans by the Electricity Minister Kgosientsho Ramokgopa to extend the use of Eskom Holdings SOC Ltd.’s coal-fired plants earmarked for decommissioning, in a bid to stave off an escalation in power cuts.
(Bloomberg) — South Africa’s governing party has approved plans by the Electricity Minister Kgosientsho Ramokgopa to extend the use of Eskom Holdings SOC Ltd.’s coal-fired plants earmarked for decommissioning, in a bid to stave off an escalation in power cuts.
Ramokgopa presented his plan to ease rolling blackouts, known locally as load shedding, before the African National Congress’s highest decision-making body on Friday.
“The NEC supports the approach that as we prioritize load shedding we will need to re-visit our decommissioning schedule to balance energy security and our climate commitments,” President Cyril Ramaphosa said in his closing address to the ANC’s National Executive Committee.
Africa’s most-industrialized nation has been hobbled by an energy crisis that’s slowing economic growth and increasing costs for companies. The plan to keep using the dirtiest fuel for longer may also delay transition to cleaner fuels and access to $8.5 billion of funding by rich nations for closing coal plants.
The updated schedule will be determined by a number of factors including modeling to estimate projected future capacity from various sources as commissioned by the National Energy Crisis Committee of Minister.
Other factors to be considered will include, research on the decarbonization trajectory to be conducted by the Presidential Climate Commission, as well as a feasibility study on the refurbishing of power stations which has been commissioned by the National Treasury.
Cabinet may approve the new schedule by the end of June and no units will be shut down until the new schedule has been finalized.
State-owned power producer, Eskom, will also need to increase its budget for fuel to run diesel turbines at maximum capacity which could insulate the nation from two stages, about 2,000 megawatts, of power cuts, Ramokgopa’s presentation showed.
A special dispensation could reduce the cost by allowing Eskom to directly purchase the fuel. It is estimated the utility will require an additional 30 billion rand ($1.7 billion) to purchase diesel if stations are ran at their maximum capability.
The strategy would result in the increased use of fossil fuels to mitigate electricity shortages in the country. In the worst case scenario, South Africa could reach stage 8 power cuts, meaning 8,000 megawatts would be withdrawn, according to the presentation made to the ANC’s NEC.
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