South Africa's fiercely contested National Elections in May 2019 came at a time saw the country face the biggest threat to the stability of its electricity grid in its history.

Seydou Kane, managing director at Eaton Africa discusses how Government can balance its political role with a practical, long-term solution for the ailing power sector that will strengthen its role as the country’s base supplier.

In March 2019, Eskom announced that it had been forced to implement Stage 4 load shedding. This amounted to as much as 4,000MW of a total estimated installed capacity of 51,000MW being unavailable to users, with more disruptions likely to come during the approaching winter.

A combination of ageing power stations, unplanned maintenance, and design flaws in new power stations Medupi and Kusile, have forced the utility into implementing rolling power cuts to give itself enough space to make emergency repairs to the system.

Eskom is under huge financial strain, facing corruption claims, allegations of mismanagement, and a skills shortage that severely affects the company’s ability to detect system faults early enough to prevent further crises.

The ramifications of this supply instability go far beyond the inconvenience of missing a live football match or some food spoiling in the fridge.

Thousands of small businesses around the country are complaining that their already fragile businesses face ruin should electricity continue to be disrupted. Extended blackouts place citizens under increased security risk, as opportunistic criminals take advantage of congested traffic and compromised alarm systems.

Eskom’s issues will take a long time to fix, but in the short-term, the Government will want to reassure South African consumers that it cannot only prevent an all-out blackout but ensure security of supply for the long term.

In his February 2019 State of the Nation address, President Cyril Ramaphosa announced plans to unbundle the state power utility into three separate entities – generation, transmission and distribution.

This plan will undoubtedly bring much-needed improvements in efficiency, but the transformation of the industry can’t stop there. Unbundling is not the sole panacea to the country’s electricity woes, and South Africa’s power market needs a radical regulatory, technical and economic shift away from the current centralised system.

With thousands of kilometres of infrastructure sending electricity to customers across the country, the transmission network loses as much as 40% of generated power through thermal heating.

South Africa needs to move towards a decentralised model made up of localised generation-to-distribution nodes with shorter transmission lines. While power losses will still affect these nodes, these losses will be reduced significantly to as little as 15% of generated power.

A decentralised model is much more flexible and makes it easier to employ renewables in microgrids equipped with more cost-effective battery units, further alleviating the burden on the national grid during peak periods.

Also, when a failure happens, its impact is isolated to a limited area and repairs are completed much faster. Securing microgrids is easier, as private operators are better equipped and incentivised to protect themselves against the threat of dangerous, illegal connections.

Localised grids have the dual benefits of easily reducing the cost of power by as much as half the current cost and easing the burden on the national grid. These benefits can only increase exponentially over time as cheaper and more efficient technologies are developed.

The first African country to unbundle its power utility in 2001 was Uganda, followed by Nigeria 2010. These early examples offered many lessons, but most importantly that unbundling should not be the end of the story but must be accompanied by a well-structured regulatory framework that supports new competition and continued operational efficiency.

Any regulatory body responsible for the sector needs to be strong enough to do the important job of opening the industry to new independent power producers, while creating innovative incentives for consumers to produce and store their own power and feed it back into the system if needed.

Opening the power industry for diversification will not pose a threat to Eskom. In fact, it can only strengthen the utility’s role as the base load supplier, as it will offer the company the much-needed margin to conduct thorough maintenance and ensure that any new build programmes are conducted steadily and strategically, with the best interests of all South Africans at heart.

About Eaton

Eaton is a power management company with 2017 sales of $20.4 billion. We provide energy-efficient solutions that help our customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton is dedicated to improving the quality of life and the environment through the use of power management technologies and services. Eaton has approximately 96,000 employees and sells products to customers in more than 175 countries.

About Eaton in Africa

Eaton has been in Africa since 1927 with offices in South Africa, Kenya, Ivory Coast, Morocco and Nigeria, with 200k ft² of manufacturing space located in South Africa and Morocco. A certified BBBEE Level 1 contributor in South Africa, Eaton offers a broad portfolio supplemented by “made for Africa” products and solutions. Eaton has over 700 employees and numerous distributors across the region, allowing us the opportunity to help our customers grow and provide sustainable economic benefits to the communities in which we operate. For more information visit www.eaton.com