EP 3 - ESKOM ENERGY crisis Resolved?

Looming electricity crisis in South Africa still not over, or is it?

Eskom burning diesel! 

South Africa just hit 300 days without load shedding. 

#eskom #electrical #globalenergysecurity
Let's dive deep into the latest electrical local news­ together! This episode covers the significant milestone of 300 days without extended power outages, a major achievement for ­­­­­­­­­Eskom­.

 We discuss the ongoing situation with ­­­­loadshedding­ in ­­­­­­­­RSA­ and what this means for the future, how is Eskom ensuring their part in global energy security. ⚡

We also compare the cost of coal power VS diesel and how this relates to energy contracts from IPP's.

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Transcript

SPEAKER_00 0:00

South Africa has gone 300 days without an extended hour outage. Well done. And welcome to this then the next episode of Relay Radio. And I'm sure you have noticed that now we have the ability to show ourselves. So I had a whole thing planned with multiple cameras set up, and I wanted to do fancy angles, and in the at the very last minute, um basically realized that it wasn't gonna work, and it might have worked, but it might not have been as reliable as I would have liked to. So we'll go with one reliable camera and then at least get a video out. So let's jump straight into it. So this evening, then because it's night here where I'm at the moment, I would like to touch on a few points that I've been seeing in the industry, and I think it's time that we start opening up this discussion to the industry as a whole. And us as the consumers and us as electrical contractors, we all get these questions. So today we're going to do a quick check on three South African energy headlines, and then I will be reacting in an impromptu fashion to them, sharing with you what I think about them, and let's jump in with the first one. The headline reads in the Washington Post South Africa's ANC takes a free market turn. So the lights are finally back on thanks to market reforms. This was yesterday at 5 45 a.m. Eastern Standard Time. And there's a nice picture of Uncle Cyril and um Before the State of the Nation address, which happened on the February the 12th. And the first line basically reads for South Africa's rolling electricity back blackouts were a symbol for years. South Africa's rolling electricity blackouts were a symbol of the country's dysfunction and decay. But this month, President Cyril Ramaporza delivered an upbeat message in his annual address. South Africa has gone 300 days without an extended power outage. Well done. Yay! The reason Ramaporza and his African National Congress Party finally dropped their socialist-inspired aversion to markets and unleashed the country's private sector to keep the lights on. They basically allowed us to generate our own electricity like they should have been doing for uh yeah, the last 20 years. So, according to the Washington Post here, that immediately azed the burden on ESCOM, the country's corruption plagued electricity monopoly. We know them so well by now. So, a summary of this Washington Post uh headline. The first point I think I can see here is they are saying that stability is improving, and we we've seen it over the last um well 300 days that we don't have load shedding as often at all. Um but some local cases in more rural areas you'll still find that the SCOM power grid is still unstable and just simply not always as reliable as it should be. So, yeah, I I would say when the grid is stable for longer, everyone might relax. Homeowners, businesses, us as installers start relaxing. We think the problem has passed. But in actual fact, we've spent billions of Rands on diesel because before all of this, our government went and signed a whole bunch of contracts with open open gas turbines, open vent gas turbines. Okay, so we can see that uh basically I mean the grid is stable, but stability at the moment doesn't necessarily necessarily mean sustainability, and stability. I then beg the question, like, for how long is this gonna go on? How long do we have a stable grid for? And we still see as I mentioned earlier in rural areas where for years and years um the energy grid has been unstable, so quite often you would still have um weekly blackouts or um extended blackouts for for days on end. I just quickly went and double checked, but in fact it is true, and I want to get this exact number, but in ESCOM's recent uh weekly system status update, the power utility explained that it spent 14.89 million Rand on diesel to generate 2.48 gigawatt hours of energy between the 14th and the 20th of February. So less than a week, six days, um, and SCOM spent fourteen point eight nine million to keep the power on. So this was despite having excess functional coal power capacity on Friday of nine point eight seven nine mil megawatt of coal-fired generation, was in gold reserve. So equal to basically the investment we made to erect and build Madupi and Kusile, they both deliver uh or those two together deliver nine point six nine thousand six hundred megawatts, so nine point six gigawatts. Um and the capacity of coal-fired generation in cold reserve was equal to nine thousand eight hundred and seventy-nine megawatts. So that does not leave us in a very, very good spot because where did they get that power from? They used open cycle gas turbines, and at the moment we've been in uh IPP agreements with those service providers, and I can give you a wild guess as to what the cost is. To generate a megawatt hour with coal fire costs ESCOM five hundred and forty Rand. So that's normal coal fire, that's like the worst case scenario for us. Um and open cycle gas turbines on the other end is five thousand eight hundred and seventy Rand for a megawatt hour. What are we saying? Which is a significant amount, um per megawatt hour. So that's ten times the normal rate. So they can tell me that the energy grid is stable, but at what cost? And to line whose pockets? Ultimately, where does all that money go? Um I mean Yeah, that's that's simply not a profitable business model at all. I don't see how that that is profitable. Um They also state here very proudly that the operating reserve margin increased uh from 9 February till the 15th of February. A daily average operating reserve margin from 27.6% to 54.9%. For what reason? That doesn't that doesn't put uh cash back into anyone's pockets, not ours as consumers, and that leads on to my next one. So the next um news report that I found here was on Reuters and the headline reads quite simply the South African regulator, so NERSA says ESCOM can increase charges more than they previously approved. How convenient. So that was updated on the February on February the eighth, twenty twenty-six. And we see here South Africa's energy regulator said on Sunday that it granted state utility ESCOM larger electricity rate increases for its next two financial years than originally set after admitting errors in its earlier calculations. Again, how convenient like calculation errors. ESCOM's prices will now rise and hear this consumer, uh so basically the average Joe on the street, eight point seven six percent this coming April 2026, and then eight point eight three on top of that April 2027, instead of a 5.36 and 6.19. So that's a combined increase on top of the existing increases of more than 4%, almost 5% increase on top. It's just ridiculous. Like I I don't see again, like how is this a sign that the power utility is stable? Um I don't I don't see it as that. Thanks for listening to Relay Radio, where everyday life meets the wire. If this was useful, share it with someone who needs clear safe guidance. Subscribe for more practical breakdowns and send your questions or ask the relay. Until next time, safety first, standards always.