Department of Public Enterprises (DPE)
3 February 2007
The responsibility for supply security in South Africa lies with the
Department of Minerals and Energy (DME) while Eskom currently has the
obligation to meet the need for additional generation capacity. Over the past
few years the reserve margin (the difference between generation and demand) has
fallen below that required to meet national demand reliably. There is now an
urgent requirement firstly to define what level of reserve margin should be
maintained and secondly, to clarify the responsibility for ensuring that
security standard is met, given the Government policy that new generation
capacity shall be provided 70% by Eskom and 30% by the private sector.
In the light of the above, the DPE carried out a study on national
electricity supply security that involved the following elements:
* A description of security of supply and reliability issues for electricity
systems generally, including how an appropriate reserve margin is determined
and how the responsibility for supply security is dealt with
internationally.
* A review of security of supply in a selected number of other electricity
markets, comparable to that of South Africa, in order to demonstrate the range
of Governmental, regulatory and industry bodies that are involved in the
security of supply in these markets.
* A review of the existing security of supply position in South Africa,
including the responsibilities for supply security; the basis on which a
security of supply standard is incorporated in the generation and transmission
planning process and the extent to which the level of reserve margin is
adequate to meet the required level of supply security in South Africa.
* Conclusions and recommendations on measures that could be taken to improve
the security of supply in the short, medium and longer term; improving the
process of determining the reserve margin, monitoring the demand/supply balance
and making information available to interested parties.
This study is one of a number of studies that government and other parties
have commissioned to guide the implementation of Eskom's current Build
Programme. The department is actively working on plans to the improve security
of electricity supplies in South Africa.
Security of electricity supply in South Africa is one of the most important
issues facing the electricity industry, its customers and Government. Key
aspects of electricity supply security are the availability of adequate
generation capacity to meet customer demand at any time and a secure and
reliable transmission system to deliver power to all regions of the
country.
The electricity supply and demand balance is currently extremely tight,
particularly over the winter peak demand season and this is likely to remain
tenuous during the next few years. Given Eskom's key role in planning and
managing supply security, it is appropriate for the DPE to have a position on
security of supply, for both the immediate short-term, the medium and
longer-term.
Internationally, the importance attached to power system security has
increased significantly in recent years, following large-scale power outages
both in North America and in Europe. Governments and Regulators are concerned
about the ability of the market to deliver adequate security of supply and are
putting in place measures to ensure adequate security. International experience
also shows that maintenance and asset management are crucial to avoid increases
in the number of concurrent fault events that would risk more and larger
interruptions to customers' supplies.
The supply problems in South Africa during 2006 also highlighted concerns
about the adequacy of the transmission system to deliver power to all regions
in the country. Although the transmission system is generally designed to be
resilient to a single transmission circuit outage, the transmission system does
not meet this criterion in all regions. Some regions in South Africa where
demand exceeds the local generation capacity, the security of supply is lower
due to the limitations of the transmission system.
If the return to service of mothballed plant, the commissioning of any of
the new gas turbines run behind schedule or the forecast level of Demand-Side
Management (DSM) fails to materialise, the capacity situation in the short term
will become tighter. The advantages of gas turbine plant include flexibility
(including the possibility of later conversion to run in a combined cycle
mode), the ability to locate in regions where generation is in deficit (thus
adding to security in those regions) and the relatively short timescale for
construction.
Since the above DPE report was commissioned, Eskom, DPE, DME and the
National Energy Regulator of South Africa have been involved in a series of
discussions regarding the best approach to improving the security supply
situation. Eskom's current capacity and transmission expansion plans include
returning a number of mothballed power stations to service and the accelerated
development of new pumped storage hydro-electric schemes, with three new power
stations in the plan. Construction is underway on two Open Cycle Gas Turbines
at Mossel Bay and Atlantis. As a result of the return to service of coal plant
and open cycle gas turbines 1 700 megawatts (MW) of additional capacity should
be added to the grid in time for the 2007 winter peak demand.
Eskom is also redoubling its efforts on DSM, encouraging consumers to use
electricity wisely. The current aim of this programme is to reduce demand by
153 MW each year for 20 years. This is equivalent to the annual output of a new
six-unit power station. Eskom is also planning more ambitious savings of 3
000MW between 2007 and 2012 (an average of 500 MW per annum).
Enquires:
Ms Gaynor Kast
Ministerial Spokesperson
Department of Public Enterprises
Tel: (012) 431 1000
Fax: (012) 431 1039
Cell: 083 271 4350
Issued by: Department of Public Enterprises
3 February 2007
Source: Department of Public Enterprises (http://www.dpe.gov.za)
