Fellow Energy Enthusiasts

The first month of 2024 is now officially behind us!

The energy sector has kicked off in much the same way 2023 ended: with a lot of news on the energy front which we read off our cell phones in the dark.

For starters, the DMRE has published the Integrated Resource Plan (IRP) 2023 for public comment by 23 February 2024. The IRP 2023 has been widely criticked, mostly for being, as Business Unity South Africa (BUSA) put it “thin on detail“.  We suspect there will be many comments, since it kind of seems that the “P” part in IRP is missing.

There were nonetheless a few notable take outs from the IRP 2023, none of them new news:

• Eskom’s plant performance during the 2023 financial year was only 54,72%.  Given the country draws 80% of its generation capacity from this fleet that does explain why 2023 was the worst year ever for loadshedding and if anything it’s looking as if it might get worse.
• That said, private sector generation initiatives are starting to make a serious dent with an estimated 10.4GW generation capacity to be online before 2030 which is a significant amount of power if you consider that South Africa’s total wholesale/public nominal generation capacity is about 54GW.
• Grid capacity remains a massively constraining factor with more than 14 000 km of new lines which need to be built in the next 9 years.  Since only 4 000 km were constructed in the past 9 years …

Fortunately, it finally appears as if Eskom is willing (or being compelled) to share the load. Electricity Minister, Kgosientsho Ramokgopa, announced last week that procurement for privately built and operated grid infrastructure will be rolled out “with speed”.  It also seems as if Eskom have found a way to have unlock grid capacity in the Western and Eastern Cape through the introduction of a 10% power generation curtailment.  This means that 3 470MW of new wind projects (2 680MW in the Western Cape and 790MW for the Eastern Cape) could be awarded in REIPPPP BW7.

On a more personal note, we all breathed a huge sigh of relief when the petrol price decreased by 62c/litre and diesel went down by a whopping 118c/litre.  Unfortunately though, it seems as if some diesel retailers are now looking to stretch their profits by watering diesel down with illuminating paraffin. It does, however, seem as if it is the smaller, unfamiliar fuel brands that are the culprits, and if we continue to support the big oil companies it is highly unlikely that we will be fueling up with dodgy diesel.

We hope you had a restful break and are ready for a bumper year in energy procurement in South Africa!