Eskom ‘plan’ sees no coal shutdown until 2028 (at least)

Eskom’s latest Medium-Term System Adequacy Outlook (MTSAO), published last week, signals a significant departure from all previous forecasts and official plans which saw over 6 000MW of coal capacity shut down by the end of 2028.

Now, the document models “as a scenario the continuation of operation of all coal-fired stations”. In other words, it “assumes that no coal power plant will be shutdown” during the next five years.

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The annual outlook, a dry technical document, must be published by the System Operator (effectively its Transmission division, the to-be-separated National Transmission Company of South Africa) by the end of October each year.

It is not policy, per se, nor can it necessarily effect decisions, but it provides a sober, objective assessment of “supply-demand balances or lack thereof over the next five calendar years”. If there is a gap, it produces a gap analysis to calculate how much energy is required to balance the system.

Read: Eskom’s power output frozen in time: Same as 23 years ago

Eskom’s original planning, including last year’s MTSAO (and all recent previous editions) as well as the latest Integrated Resource Plan (IRP 2019), sees a significant amount of coal capacity being removed. But the 2023 outlook notes that the IRP 2019 saw 5 400MW of coal generation capacity being shut down by 2022 and that already this has been delayed “in response to the capacity constraints”.

Under the current plan, Eskom has only shut down Komati, which had a single unit operating (and which contributed a measly 121MW of capacity).

Read: How SA botched its first coal power-plant transition

Still, it said in October last year “the Komati Repowering and Repurposing project is one of the largest coal-fired power plant decommissioning, repowering and repurposing projects globally and will serve as a global reference on how to transition fossil-fuel assets”.

The 6 105MW of capacity which was to be shut down by 2028 comprises 1 400MW at Arnot, 1 480MW at Camden, 570MW at Grootvlei, 1 098MW at Hendrina, 1 215MW at Kriel, 171MW at Acacia, and 171MW at Port Rex.

In its summer outlook from September, Eskom noted that Camden and Hendrina are among its six coal power stations showing “good performance”.

The former has been consistently achieving an energy availability factor (EAF) performance of above 85%. In the case of Kriel, it has commenced the replacement of cooling tower 4 and will complete this project by March 2024.

Port Rex and Acacia are gas turbine stations situated in East London and Cape Town, respectively. These will reach end-of-life in the next five years. Both are critical for maintaining stability – Port Rex is at the end of a long transmission line while Acacia performs a similar role in the Cape, and also provides off-site supply to Koeberg.

Plan ‘currently under review’

It says the plan as used “in the base case and previous MTSAO studies is currently under review by Eskom in light of the current capacity constraints”.

Eskom says a “detailed techno-economic study is currently underway that will provide more planning inputs and optimised shutdown dates in order to balance capacity and economic considerations for the country”.

It adds: “At the time of completion of the MTSAO 2023 study the analysis was still ongoing hence the MTSAO 2023 assumes that the performance of these stations will plateau from the year they were scheduled for shutdown, for the period of the study.”

Cabinet and Eskom previously this year confirmed plans to ‘prolong’ the life of coal power stations that were meant to be shut down by the end of the decade.

If the ‘current’ (theoretical) shutdown plan is implemented, coal generation capacity will decline from 39GW in 2024/25 to 37GW in 2026, and 35GW in 2028. The only reason capacity would stay stable at 39GW until 2025 is due to Kusile units 4 and 5 reaching commercial operation and the return to service of Medupi unit 4 which was blown to pieces just over a month after the station was officially completed in 2021.

If no coal capacity is shut down (and the two small gas turbine plants stay in operation), capacity of these Eskom plants will increase to the 41GW level. Of course, at some point these ageing polluting coal plants will need to be shut down.

Karpowership not factored in

Interestingly, the MTSAO also excludes any possible capacity from the “Karpowership projects due to historic and current uncertainties with regard to progress with the projects”.

Separately, it takes a far more conservative view of the amount of rooftop photovoltaic solar.

Eskom’s own current estimate of 4 800MW is set aside in favour of GreenCape’s 2023 data, which puts the number at around 3 200MW. It assumes a growth rate in peak capacity of 880MW per year over the next five years.

If the coal stations due to be removed from service are kept running, the MTSAO says that this “scenario serves to relieve the system to some extent, but without EAF improvement or the addition of new build levers, this scenario falls short of restoring the system to adequacy”.

The delay in Bid Window 7 of the Renewable Energy Independent Power Producer Procurement (Reippp) – which seeks to procure more than 9 000MW of generation and storage capacity – together with a constrained transmission grid (these are an interlinked problem) negatively impact its outlook towards 2027 and 2028.

(Already, those projects from Bid Window 5 that may actually achieve commercial close will only come online sometime in 2025).

Listen/read: Eskom on perilous and ‘unsustainable path’

The only ‘real’ solution to balance supply and demand is to achieve a high EAF across the next five years.

The assumption in the ‘high road’ scenario is an EAF that improves to 66% in 2024 and steadily climbs to 68% by 2028.

So far in 2023, Eskom has achieved an EAF of above 60% in just a single week (between October 16 and 22). The average EAF for the year is at 54.89%, below the 58% achieved in 2022 and 61.79% in 2021.