Generation of Electricity
State-owned power utility Eskom is in crisis due to generating capacity shortages, financial instability, corruption and mismanagement and R450bn debt. Eskom reported a net loss after tax of R20.7bn for the 2019 financial year and said it would make a R20bn loss in the 2020 financial year. In December 2019, load shedding reached stage 6, an indication that it has lost 40% of generating capacity. Ongoing power cuts will continue to affect economic growth. In October 2019, government approved the Integrated Resource Plan 2019, which outlines the energy mix for the next decade. The bulk of the increased generation capacity will be from renewable sources to lessen South Africa’s reliance on coal and help reduce the country’s carbon emissions.
Developments at Eskom
Eskom continues to struggle to meet generation demand, mainly due to maintenance issues, poor management and spiralling debt. A fifth of Eskom’s power stations are not operational at any given time and Eskom’s huge new coal-fired power stations, Medupi and Kusile which were intended to be completed by 2015 at a cost of R163.2bn, have been constantly delayed and expected to cost R451bn. Eskom will be unbundled to separate its generation, transmission and distribution functions into three separate business entities, owned by the state.
A New Plan
Since the Integrated Resource Plan 2010, 18,000MW of new generation capacity has been committed including 9,564MW of coal power, 1,333MW of water and 6,422MW of renewable energy by independent power producers. The 2019 plan calls for about 6,000MW of new solar capacity and 14,400MW of new wind power capacity by 2030.
This report focuses on the generation of electricity by Eskom and independent power producers. There is comprehensive information on the state and size of the sector, the shifting energy mix under government’s resources plan to 2030 and progress in the introduction of renewable energy. There are profiles of 13 companies including Eskom, the Dedisa and Avon peaking power plants and solar energy companies such as the Hopefield Wind Farm and Coria, which trades as the Noblesfontein Wind Farm.