By Prof Sampson Mamphweli, director for the Centre for Renewable and Sustainable Energy Studies at Stellenbosch University, South Africa
Did you know Independent Power Producers were the first to produce electricity in South Africa with Kimberley switching on its first street lights in 1882? The first power stations were built in the late 1890s to supply electricity to the gold mining industry, and by 1915 four thermal power stations had been built to meet the rising demand from the mines and the new mining towns. The journey to the country’s current energy landscape had begun.
South Africa’s utility company, Eskom, was established through the Power Act in 1910. This Act defined electricity as a public service and it went further to give the government the power to expropriate private electricity initiatives that were already in place. In 1922 the Electricity Act of 1922 stimulated the supply of cheap electricity, and this then implied that the electricity industry would be regulated, controlled and run by a parastatal.
Eskom was then established as the Electricity Supply Commission through a government Gazette of 6 March 1923.
Eskom started building power stations to supply low-cost electricity. The demand for electricity increased and so did the Eskom activities. This growth was mainly driven by the growth in the mining and industrial sector as well as urban development.
Then there was the slow economic growth between 1983 and 1993 associated with the shift in the political landscape of the country. This led to the low demand in electricity as well.
During this period, Eskom had to decommission and resort to mothballing some of the power stations until 1995.
At this time fewer than 13 million South Africans (40% of the population) had access to electricity. Eskom then started a programme to electrify villages and townships across the country to increase access to affordable electricity. In 2002 Eskom was restructured as a public company, Eskom Holdings Limited.
Eskom also went through the process of transformation achieving its 45% target of employees in managerial, supervisory and professional positions being black. The transformation phase, like the decommissioning of power stations, was not an easy phase for the utility. Eskom also had to capacitate black professionals and engineers during the process through educating them. At this point, the parastatal relied primarily on coal for electricity production until the South African government published the white paper on renewable energy in 2003.
The white paper set a target of 10,000GWh renewable energy contribution to the final energy consumption by 2013. At that time the installed capacity was 37,000MWe. The renewable energy target was approximately 4% (1,667MW) of the projected electricity demand for 2013.
There were serious delays in the introduction of renewable energy in the country until government published the Integrated Resource Plan (IRP2010-2030) that set an updated target of 14,725MW renewable energy contribution through a ministerial determination. This target was about 40% renewable energy contributions by 2030.
The government then introduced the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) in 2011 to implement the objectives of the Integrated Resource Plan (IRP2010-2030). At this point the electricity was predominantly produced from coal (91.7%), followed by nuclear energy (4.2%), followed by hydro (2.4%) and lastly pumped storage at 1.7%. The introduction of the REIPPPP changed the electricity landscape of South Africa.
Currently, Eskom has a net output of 47,201MWp, and it produces 85% of South Africa’s electricity, which is an equivalent of 40% of Africa’s electricity. Renewable energy accounts for 5% of South Africa’s electricity. This is mainly due to the targets set in the IRP2010-2030 that aimed to change the electricity landscape from high coal (91.7%) to medium coal (48%) using electricity produced by the Independent Power Producers, with the utility company, Eskom, as the single buyer of the electricity.
The REIPPP programme procured over 6.3GWp by 2017 and of this, 3.8GWp was already feeding into the grid. A further 2.4GWp was procured in 2018, which included 27 projects signed by the minister. The REIPPP attracted $14.4 billion investment by December 2017. The concept is based on the public-private partnership model to increase new generation capacity. It also encourages industrialisation as it requires that at least 40% of the technologies involved should have local content. This results in job creation for the local communities where manufacturing takes place.
The programme also has socio-economic development aspects as the requirement is that South African companies must own shares in the projects and local communities must also own shares in the projects. Thus far the programme has created approximately 38,000 jobs since 2017, with approximately 4,000 permanent jobs, of which 40% of the people employed are youth.
In terms of energy production, the 62 projects that were in operation since 2013 produced approximately 22,165GWh of electricity by December 2017. South Africa has since published the Integrated Resource Plan 2018 update, which is in the process of being finalised.
The IRP2018 update calls for more renewable energy contribution through Independent Power Producers and the decommissioning of more coal-fired power stations by 2030.
In summary, the initial slow uptake of renewable energy was due to the higher capital investments required back then. Currently, the technologies have evolved and become more efficient resulting in lower capital investments needed.
The other challenge was on the government policy side, which has been remedied by the government opening up the market with the introduction of the White Paper on Renewable Energy and the Integrated Resource Plan in 2010 that resulted in the re-introduction of Independent Power Producers under the REIPPPP. ESI
About the author: Prof Sampson Mamphweli holds an MSc degree from the University of Venda and a PhD from the University of Fort Hare. He has published more than 45 research articles in journals including four book chapters, and presented over 36 research articles at national and international conferences. Prof Mamphweli joined Stellenbosch University in July 2017 as director for the Centre for Renewable and Sustainable Energy Studies.